How was AT T started

commentFilm-ready twist: marriage-off at AT&T and Warner Media

The traditional Hollywood studio Warner Bros. has some real blasts on offer this year: "Godzilla vs. Kong" started in the USA at the end of March, the new edition of "Dune" will follow in the fall, and a short time later the fourth "Matrix" -Movie. Unlike in the past, none of these films have an exclusive cinema premiere; they were and will be made available right from the start on the in-house streaming service HBO Max. When Warner boss Jason Kilar announced this daring strategy at the end of last year - allegedly due to the pandemic - namely that all 21 Warner films would go directly online, there was an outcry through Hollywood. Nobody had dared to do this before.

But what should one expect from the relatively new owner of Warner? The telecommunications group AT&T had only secured the film empire - which also includes the news channel CNN and the pay-TV HBO - for 85 billion dollars in 2018. And for the telecommunications company it only seems logical that it wants to sell subscriptions and promote bundled offers with network access and subscription packages - and not, for example, promote film heritage. Otherwise the sensational deal from 2018 would not have made any sense.

Now, three years later, this is already in question again at AT&T. AT&T wants to split off Warner and merge with the competing media group Discovery. The plans, writes Bloomberg, for example, could still fail, but they have come a long way. The two groups have now confirmed the project. One of the goals could be to build a powerful streaming portfolio to stand up to Disney and Netflix in the battle for this market.

But it would also undo the recently completed integration of Warner into AT&T. Right from the start, the telecommunications giant had not been able to convince many that this concept would take it further. In doing so, he followed a popular trend in the US network and media industry. The logic was something like this: Telecom connections alone no longer bring in the money in the long run that is devoured by the constantly necessary expansion of the networks. The salvation of the future lies in coupled offers with content. And for pure media companies, too, the theory was that it was becoming more and more difficult because they often lack direct access to end customers - after all, they usually sell their films and programs to broadcasters and platforms, while cable companies in the USA traditionally maintain customer contact . Between 2009 and 2013, the cable provider Comcast had secured the television empire NBC and the Hollywood studio Universal, which in turn were linked in a group.

But now the enthusiasm for the supposed future concept has cooled down again. Many AT&T investors recently demanded that the telecommunications giant should concentrate on its core business again. The major merger did not meet expectations and both parts would be worth more separately than together, was the criticism. One of the toughest critics is the notorious activist investor Paul Singer with his company Elliott Management. If it comes to the spin-off from Warner, Singer would have pushed through another company breakup and strengthened his own myth.

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The plan shows how ephemeral the supposedly compelling logics in the media business are. Many of these logics are reflected in Warner's story of the past 25 years, which is not lacking in twists and turns: First, the film empire was merged with the magazine publisher Time, because allegedly the combination of audiovisual content and print necessarily creates a lot of synergies. Then the Internet access provider AOL took over because it was supposedly easier to sell web connections together with content. Both mergers were then, with great difficulty, dissolved, as was the connection between Warner Bros. and the music provider Warner Music. In between, the major media entrepreneur Rupert Murdoch wanted to take over WarnerMedia, but the project failed.

Finally, AT&T grabbed it. The spin-off and connection with Discovery could now also break this connection again and establish a new, allegedly inevitable conviction in the media business. But even this should not be the last and the step now discussed will not be the last cinematic twist.


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