AT&T has spent much of the year working to decouple itself from its once lofty video business ambitions, but this week showed that the company still has lots to untangle.
In 2021 alone, AT&T has spun off DirecTV and the rest of its linear TV distribution business, reached a deal to spin off WarnerMedia and combine it with Discovery, Inc., and sold off Crunchyroll, its anime streaming service, to Sony for $1.175 billion. The deals will help AT&T pay down its debt and they should help simplify operations—though AT&T will retain significant financial interests in both DirecTV and Warner Bros. Discovery—allowing AT&T to focus on 5G wireless and fiber.
However, things got complicated again this week for AT&T after Reuters dropped an extensive report directly tying AT&T to the formation and continued financial support of One America News Network, a conservative news and opinion channel that has drawn criticism for its spread of disinformation about the COVID-19 pandemic and the 2020 presidential election. The report, based on a review of court records, showed that AT&T essentially commissioned OAN from founder and CEO Robert Herring Sr. and that a carriage agreement through DirecTV and AT&T’s other TV services is responsible for 90% of OAN’s revenue.
Angelo Carusone, CEO of Media Matters for America, a non-profit media watchdog, called upon AT&T to “immediately sever ties” with OAN and blasted the network for trying to expand its reach by encouraging its audience to pressure both Comcast and Charter into carrying OAN. On Twitter, Carusone accused AT&T of overpaying for OAN and forcing other potential distributors to accept automatic 12-month contract renewals.
“Well, this provision exposes something about how AT&T views OANN. AT&T almost certainly put this provision in the contract in order to make it harder for them to get picked up elsewhere...so that the channel would be largely limited to AT&T,” he tweeted. “Put another way, the terms expose that AT&T was at minimum invested in OAN's existence/success, so they could offer something unique to customers. So sure, all the more reason to help subsidize the network by overpaying.”
Women’s group UltraViolet this week also spoke out against AT&T’s alleged support of OAN and called for AT&T CEO John Stankey to step down if his company is “unwilling to correct this course by severing ties with OAN.”
AT&T has responded to the report and said that its carriage of OAN was in the interest of providing a wide variety of content and programming. The company also said that it has never had a financial interest in OAN.
While AT&T is dealing with the fallout from the OAN report, it’s also tying up some loose ends within its lingering video business. This week, the company began notifying customers that it will soon shut down WatchTV, its low-cost multichannel streaming service.
“We’re focused on building our core business of connectivity and our fiber expansion. To help this growth, we won’t support WatchTV after November 30, 2021,” an AT&T spokesperson told Fierce Video. “WatchTV customers who also have a premium subscription service associated with their WatchTV account will be provided HBO Max as a replacement.”
AT&T this year has made a lot of progress in streamlining its operations. But after a week like this one, it’s clear the company still has plenty left to do before it’s really out of the video business.