U.S.telecom behemoth AT&T Inc. T has inked a deal with Entertainment Studios to provide the latter’s channels to its U-verse TV and DIRECTV customers. The deal includes broadcast of the entire suite of Entertainment Studios’ channels, including some of the prominent brands in its portfolio, namely Comedy.TV, Recipe.TV, ES.TV, MyDestination.TV, Cars TV, Pets TV and Justice Central.TV.
The deal comes a year after Entertainment Studios and the National Association of African-American Owned Media (NAAAOM) filed a discrimination suit against AT&T accusing the latter for its refusal to enter into a contract with 100% African owned media companies. The matter is now believed to have been resolved.
Recent Pacts
Earlier this year, AT&T reached similar agreements with mass media service providers Viacom Inc. VIAB and A+E Networks. In addition, with an eye on developing content suited to the taste of the Millennials, AT&T, along with the Chernin Group, entered into a joint venture to form Otter Media, in a bid to beef up its channel portfolio. Moreover, DIRECTV has been involved in producing certain original TV series for its viewers.
Enhancing Future Prospects
Earlier this year, AT&T completed its acquisition of DIRECTV to become the largest pay TV provider in the U.S. With its combination of U-verse, DIRECTV’s satellite TV and an all-fiber GigaPower Internet service; AT&T now enjoys the operational flexibility to provide both traditional cable TV service as well as mobile video streaming service. This helps the company to cater to the needs of its customers by giving them adequate choice between traditional cable TV, IPTV and mobile TV streaming service. On the back of such competent initiatives, AT&T has naturally emerged as a formidable force in the pay TV market against the likes of other cable multi service providers (MSOs) like Comcast Corp. CMCSA as well as TV streaming service providers like Netflix Inc.
The Bottom Line
While AT&T tries to consolidate its leading global position as a pay TV provider, it is vehemently trying to dethrone Verizon Communications Inc. VZ, vying for the number one spot in the U.S telecom market. However, with Verizon too launching its own mobile TV service – Go90, AT&T is poised to face tough challenges from its rival going forward.
AT&T presently carries a Zacks Rank #3 (Hold).
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