AT&T got Turner Networks to join its upcoming Internet video services in the latest example of how the carrier is building a broad, mainstream offering to compete with cable television.
Turner, which owns cable channels TBS, TNT, and CNN, among others, agreed to be included in the new digital service as part of a larger deal to also be carried on the DirecTV satellite service that AT&T bought last year. AT&T has signed a series of deals for its digital service, including with other units of Time Warner, using its newly obtained heft in the pay TV market.
AT&T paid $49 billion for DirecTV last year. Approximately 80% of the carrier’s 25 million video subscribers are on DirecTV, with the rest paying for wired connections in AT&T’s U-verse service. In March, AT&T said it was creating several Internet-based video services that could compete with traditional cable TV. The services, which will vary in price and content, are expected to roll out in the fourth quarter.
“The Turner agreement adds more premium content to our already robust line-up of DirecTV Now channels available to customers when it launches this year,” said Dan York, chief content officer for AT&T, in a statement. The carrier has previously struck deals Time Warner’s (TWX) HBO, Comcast’s (CMCSA) NBCUniversal and Disney (DIS).
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AT&T (T) has not disclosed the prices or exact details of its new Internet video services. It has said that the DirecTV Now offering will let customers assemble their own bundles of cable channels. A more affordable offering, called DirecTV Mobile, will combine premium video with made-for-digital content. And a free offering called DirecTV Preview will offer some shows from the other apps but with advertising.
At the same time, the company is working on the Internet services that looks much like traditional cable TV, AT&T is also investing in other kinds of digital video services. In April, opened a new $5-per-month video streaming service called Fullscreen pitched toward millennials.
AT&T executives have said they expect the new Internet TV services to hit the market by the end of the year.