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5 things AT&T revealed in the Time Warner trial that could directly affect you
by Brian Fung April 20 at 10:14 AM Email the author

Randall Stephenson, chairman and chief executive of AT&T Inc., exits federal court in the District on April 19. (Al Drago/Bloomberg News)

For weeks, officials defending the AT&T-Time Warner merger have spoken in broad terms about how the deal could lower TV subscription prices for consumers and spur “innovation.” But it wasn't until this week that top company executives laid out specifics about their plans for the combined company — including possible changes to the customer experience.

Here are five things that AT&T revealed in court that could directly affect you.

AT&T Watch

When AT&T chief executive Randall Stephenson took the witness stand Thursday, he wasted little time before teasing a new, online streaming app that's expected to roll out in the coming weeks.

The service, known as AT&T Watch, will cost $15 per month and provide a slew of cable programming that specifically excludes sports content. The idea is that because sports programming is expensive, getting rid of sports from this “skinny bundle” could appeal to cost-conscious viewers who don't care much about sports. In this way, you can think of AT&T Watch as a cheaper sibling to AT&T's other streaming app, DirecTV Now. Stephenson added that the product will be free for AT&T wireless subscribers who have an unlimited data plan.

[AT&T's CEO took the stand in the Time Warner trial. Here's what he said.]

This product could technically roll out before the Time Warner merger closes. But it is likely to be a key product offering from the combined company, as Stephenson testified that he is trying to shift directions at AT&T at a time of rapid change in the television industry.

New video formats

John Stankey — the AT&T executive who plans to run Time Warner after the merger — told the court Wednesday that one new product he imagines could be 15-minute news roundups from CNN, formatted specially for mobile devices, that are “geotargeted to you.”

This seems to be an indication that the video content may change depending on where you live, perhaps highlighting locally relevant news that keeps viewers deeply engaged. The videos could drive additional data usage on AT&T's wireless network, meaning more money from customer data plans.

Targeted ads

By analyzing the viewing data from mobile devices, AT&T plans to sell other ads that are even more targeted. And this philosophy will apply across Time Warner's content portfolio: If people will watch it, it's a potential advertising opportunity. Stephenson repeatedly described the approach as an entry into “premium video advertising.”

[Time Warner CEO call's the government's case against AT&T 'ridiculous']

Whether you're at home or out and about, this could mean that two people watching the same sportscast could end up watching very different ads. For example, Stankey said, a beer-lover might see a beer commercial, while a soft-drink fan would see an ad for soda.

“The market we're competing in is the market for the consumer's time and attention,” Stankey said.

More 4K video everywhere

4K video, or ultra high definition, is regarded as the next step up from high definition video. Compared with video that's rendered in, say, 720p or 1080p, you get a sharper image. The catch is that it requires TV screens and monitors that can support that resolution. And until more consumers adopt those newer screens, there's not much of a market for 4K content.

That's the chicken-and-egg dilemma that has bedeviled 4K so far. But Stankey said the merger could lead to faster rollout of 4K. That's because, once AT&T controls Time Warner, it can control how TV content is produced or shot, Stankey said. You can imagine all the sports games aired on TBS or TNT being shot in 4K, for example.

[With Facebook on the ropes, Internet providers seek to press their advantage in Washington]

Why would AT&T make that decision, and couldn't someone else just as easily make that call? Well, recall that AT&T is motivated to increase usage of its network. 4K streaming takes much more data than regular HD (which takes much more data again than standard definition video), so getting more people to stream 4K video would lead to more data usage and more network revenue.

Time Warner merchandise in AT&T stores

After the merger, AT&T will want to use every opportunity to promote its new media business. And since AT&T owns more than 2,000 retail stores, the company thinks it can use that physical presence to entice people to buy movie tickets, merchandise or other Time Warner-connected stuff, Stankey said.

Walk into an AT&T store, and you might see posters for the next Batman film or the HBO show “Westworld.” Or maybe your child will see toys and other merchandise linked to the Lego movies. If because of that you end up buying a movie ticket, subscribing to HBO or getting the toy for your child, that's extra money in AT&T's pocket.
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Brian Fung covers business and technology for The Washington Post. Before joining The Post, he was the technology correspondent for National Journal and an associate editor at the Atlantic.
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