AT&T (T) , which is still trying to get its acquisition of DirecTV (DTV) approved by federal regulators, is moving to compete in a world where Internet subscriptions are increasingly begin selected based on the content offered by the provider. It's a formula that's working for AT&T's biggest rival, Comcast (CMCSA) , owner of NBC/Universal, and it's a strategy the company once known as Ma Bell is desperate to execute -- and soon.
With that goal in mind, AT&T this week said it plans to bundle a year's worth of Amazon (AMZN) Prime, the online retailer's streaming media offering, with Time Warner's (TWX) HBO and its own wired U-Verse Internet subscriptions at a bargain price of $40/month. Is that a bargain compared to getting Netflix (NFLX) and HBO through a local pay-TV provider? Maybe.
AT&T also announced an agreement with Peter Chernin, the former Fox FOX executive, to acquire a majority stake in FullScreen, a popular content provider to Google's (GOOG) YouTube. The FullScreen deal is being financed with Otter Media, a joint venture between AT&T and the Providence Equity-backed Chernin Group. The two companies had earlier bought CreativeBug, an instructional media company, from Demand Media. AT&T was slipping 0.6% to $35.31, trimming its 2014 gain to 0.4% compared to a 7.5% advance in the S&P 500