Does an AT&T, DirecTV Deal Make Any Sense?

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May 14 (Bloomberg) -- S&P Capital IQ Analyst Tuna Amobi discusses his outlook for a possible AT&T and DirecTV merger on Bloomberg Television’s “In The Loop.” (Source: Bloomberg)

I wanted to get your take on the at&t-directv possible deal.

Is this a synergistic deal for the companies or not?

I think it makes strategic sense for both parties.

In fact, a couple of weeks ago we upgraded the shares of directv to a buy from a hold precisely for that reason.

We have covered the sector for a long time and we think the stars have never been more aligned to make such a deal happen.

Does that mean we will see continued salivation, i mean, who will be left in the satellite world at this point?

I think the time warner-comcast deal brought attention to the fact that the competition will devolve into a handful of players.

One comcast and time warner completed the merger, you have more than one-third of the video market in one provider and a significantly higher share of broadband.

What at&t and directory are trying to do is counter that and i do not see this driven by synergies, but i would beg to differ with the other guest that suggested there would not be any synergy.

It is really very easy to conceive of hundreds of millions of dollars of synergies and programming costs on the video side, and the consolidation of some functions.

What will be the next catalyst for the media industry?

We have gone through the potential consolidation when it comes to cable and broadband.

What will be next?

The next frontier will be streaming and over-the-top.

We've already seen that, to initiatives around taking advantage of content online as well as mobile devices.

You have a lot of disruptive technologies that the media sector is focused on, not just to contend with the disruption, but to leverage those platforms to increase digital revenue, and international and maintenance 14. you mentioned disruptive -- important thing.

You mentioned disruptive technology.

What does that mean to you?

You have the areo case with big implications.

I think the challenge for ceos and executives is to be able to not only combat these threats, but two, you know, leverage technology to be able to increase their revenue from and we see more and more companies focusing on that.

Of course, it all comes down to how do you make money off of this, how do you monetize this consumer shift from tv to your phone, and to your ipad.

That is the "m" word, monetization, and i can't not get enough -- can't get enough comments from investors looking to monetize digital space.

You can easily foresee a few years from now where the percentage of revenue will continue to grow, maybe potentially reaching 10%. at that point you will see the evaluation -- the valuation began to reflect that.

You mention the other catalyst will be international.

Talk about that.

Part of what at&t gets from directv is exposure to latin america.

That is exactly right and latin america has been one of the growing areas with the emerging middle class, and then you have other emerging regions -- eastern europe, you know, china, of course, other parts of asia pacific.

So, when you look overall, across the media space, international growth rates continue to outperform a lot of areas whether it is box office fees or international licensing.

A lot of companies are

This text has been automatically generated. It may not be 100% accurate.


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