AT&T had a big announcement this week. Now that the merger between AT&T/DirecTV is complete, AT&T’s Senior Executive John Stephens revealed that AT&T will be able to save millions in programming costs. DirecTV was paying $17 less per month for programming content that AT&T was also paying for. This means that AT&T can now go to those programmers and get the deal that DirecTV was receiving thanks to the Most Favored Nation clause found in most programming contracts. Therefore, AT&T will likely see immediate and significant savings for not just this year but years to come.As Telecompetitor notes, the average $17 savings by six million U-verse video customers yields monthly savings of $100 million. This doesn’t even factor in that the power of AT&T + DirecTV will likely lead to better programming deals in the future. So, how much will AT&T customers see in a price decrease this year? Or, maybe next year?
It’s not entirely clear how and if AT&T will be able to extract all of these savings for their existing U-verse TV customers, given how complicated the programming rights contracts process can be. – Telecompetitor
This is pretty much what AT&T said while campaigning for the merger’s approval. In a filing to the FCC before the merger was approved, AT&T wrote that they would gain additional leverage in negotiations with content providers to lower the prices that they charge for the rights to broadcast their shows.
Does this mean that AT&T is going to lower its pay TV subscription prices and actually try to compete with hated incumbent cable companies such as Comcast and Time Warner Cable? No, don’t be silly — as Re/code points out, AT&T has no intention of passing its savings on to customers and will instead use them to pay for “new broadband offerings it is going to sell to rural residents — a measure that’s supposed to make the merger more palatable to regulators.” – BGR
No matter the merger partner, AT&T has been consistent in saving millions for themselves and refusing to pass on those savings to consumers. When AT&T tried to merger with T-Mobile, they talked about the billions that they would save…..but promised nothing when it came to actual consumer savings.