PITTSBURGH (NewsRadio 1020 KDKA) – AT&T bought Direct TV for $48.5 billion, in a transaction that created the second largest paid television provider in the country.
Direct TV has 26 million subscribers and this new acquisition leaves consumers wondering what this means for the services they are already paying for.
AT&T already has around 11 million broadband connections and just shy of 6 million paid TV service customers, if they can pull off this purchase of Direct TV they could potential convert all of the Direct TV internet customers to their product and up their subscribers to around 30 million. As most consumers know its all about the bundling with cable companies, they customers to get their phone, TV and Internet services all from one company.
Quentin Fottrell of MarketWatch came on the KDKA Afternoon News with Bill Rehkopf to talk about this what consumers could see if the future if this purchase goes through.
“Bundling is a big deal because cable bills are only going to go up people spend about $90 a month on cable and by 2020 the NPD Group estimates that will hit $200 a month,” Fottrell said.
The NPD Group is a market research company, with all of the cable and phone companies consolidating it leaves less and less competition or options for consumers, their prediction as steep as it is does not appear to be too farfetched.
Fottrell tells KDKA that one thing that will keep the market for cable interesting is companies such as Netflix and Amazon Prime that allows consumers to steam movies and TV shows. He says that it has been speculated that Verizon may try to go after Dish and that would make the cable and internet market a three horse race, AT&T with Direct TV, Time Warner Cable and Verizon if they try to acquire Dish.
A lot could happen though to make some of those plans fall through. AT&T has learned it lesson since 2011 when an attempt to by T-Mobile failed. This time they are going about this bid a better way then they have done in the past. They are hoping for a different outcome this time around.
“They seem pretty sure that they will get the approval now that they obviously have a huge deal. I think you might say that they are right in thinking that particularly with a lot of the other consolidation that is going on in this industry,” Fottrell said.
Could this be the end of cable TV as we know it? With subscribers focusing more on companies like Netflix if prices skyrocket will consumers just say they have had enough?
“Perhaps, but I’m not sure cable companies are playing that game. They know that nearly 50 million people have Amazon and Netflix in this country to watch videos but, 50 million people have not cut their cable cords despite complaints about cable bills and cable companies really being pretty unpopular when it comes to customer service,” Fottrell said.
You can listen to the entire interview below: