Here's What the Facebook Crisis Means for AT&T and Time Warner

After Russian election meddling, Cambridge Analytica and two days of congressional grilling, does AT&T still wanna be like Facebook?That’s one of the rationales for the AT&T-Time Warner merger, a $109 billion deal being challenged by federal regulators in a Washington courtroom.AT&T sees video as the future of wireless and wants to combine Time Warner content with its distribution in wireless, pay TV and broadband services. A key plank of the strategy is to develop a new advertising platform to mine the data of AT&T subscribers and deliver more targeted ads on video.The goal is higher profits for AT&T, greater efficiency for advertisers and the possibility of lower prices for consumers.Sort of like Facebook and Google, high-tech rivals that AT&T cites by name.“Unlike Google and Facebook, Time Warner has no access to meaningful data about its customers and their needs, interests and preferences,” the companies said in a trial brief early last month.“AT&T’s assets and capabilities fit hand in glove with Time Warner’s competitive needs,” the filing said. “Through its DirecTV set-top box, its broadband infrastructure and its nationwide cellular network, AT&T has precisely the sort of first-party customer data that Time Warner needs to remain competitive with the digital companies.”The value of that first-party customer data and targeted ads? Billions of dollars, the filing said.Indeed, digital advertising has grown rapidly, including annual gains of over 20 percent for the video segment.   Continue reading...

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