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AT&T Closes Acquisition of Video Streaming Service QuickPlay

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U.S.telecom behemoth AT&T Inc. (T - Free Report) announced the completion of its buyout of QuickPlay Media Inc., a leading digital streaming distribution platform. AT&T disclosed the acquisition this May. Financial terms of the agreement were, however, kept under wraps. The deal should enhance AT&T’s Internet video streaming capabilities – a domain where the company is barely active right now.

Benefits to At&T

AT&T has been relying on QuickPlay to deliver video for its U-verse TV Everywhere offering and will now be using the QuickPlay platform to deliver content for the three new DIRECTV streaming video packs it plans to introduce by year-end. The company announced plans to offer a version of its DIRECTV satellite TV service on the Internet, which does not require customers to have a satellite dish, a set-top box or an annual contract. This will allow users to access and stream DIRECTV video services over both wired and wireless Internet connection, from any provider on any device. The company will be offering three affordable video plans to appeal to all types of viewers, ranging from those who want the full package to a streamlined bundle.

With DIRECTV Now, the company plans to offer a full range of live channels and on-demand shows. Moreover, the company will launch DIRECTV Mobile to specially cater to smartphone users, providing them a package of premium and made-for-the-Web video. It will also offer DIRECTV Preview, a free, ad-supported video service designed to attract teens and millennials.

With the latest deal, AT&T aims to gain QuickPlay’s 350-plus employees and contractors and to enhance the latter's managed platform services.

Post the acquisition, QuickPlay will continue to serve other customers, such as Verizon Communications Inc. (VZ - Free Report) , Rogers Communications Inc. (RCI - Free Report) , BCE Inc.’s (BCE - Free Report) subsidiary Bell Canada, and HOOQ, an Asian joint venture between Sony Pictures, Warner Brothers, and Singtel Group.

The Bottom Line

AT&T has been missing out on lucrative Internet-based opportunities while rivals like Verizon and T-Mobile U.S. were increasing its presence in the same space. The company has been eyeing Yahoo! Inc.’s core assets for the same reason too. Integration of the QuickPlay acquisition with At&T’s DIRECTV service is expected to generate significant revenues, going forward.

AT&T presently carries a Zacks Rank #2 (Buy).

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