While AT&T primarily bought Time Warner with the goal of diversifying its business in face of growing saturation of the stateside wireless market, it also expects its new content division to boost its mobile service sales. Following the publication of the company's second-quarter financials, AT&T Communications chief John Donovan indicated the telecom giant will continue with its bundling strategy introduced after the 2015 purchase of DirecTV, with that approach to sales potentially being even more lucrative now that the firm acquired access to a number of high-profile media properties ranging from Westworld and Game of Thrones to Batman and Tom & Jerry.
The Dallas, Texas-based network operator is hence expected to embrace triple-play bundles moving forward, combining broadband and wireless Internet service with TV into a single package with a fixed bill. AT&T saw some success with selling its mobile service offerings to DirecTV customers following the 2015 tie-up and also improved the video platform's sales by advertising it to its existing wireless subscribers. The Time Warner acquisition should see history repeat itself in that regard, or at least that's what AT&T is hoping for, having already rebranded the company as WarnerMedia in order to denote the major milestone.
WarnerMedia's Hollywood blockbusters are also likely to be promoted by AT&T in a bid to improve the walk-in traffic at its retail locations across the country, with one such experiment already being introduced last year with Justice League. More foot traffic should help the firm boost its brick-and-mortar sales, Mr. Donovan suggested. AT&T's wireless additions were below analyst expectations over the second quarter of the year, though not by much, and the company's performance in its core market may still end up improving over the final two quarters as more synergies between its wireless and content business are identified and acted upon. In the meantime, the Justice Department is still appealing the court ruling that allowed the $85.6 billion tie-up to go through with no additional concessions, though its chances of reversing the deal remain slim, most industry watchers believe.