According to At&T, its purchase of DirecTV can help reduce TV programming costs by around 20%.
The $48.5 billion takeover was detailed in a regulatory filing. It was mentioned that around 60% of the video subscriber revenues go towards paying for U-Verse TV service content.
The purchase of DirecTV brings in 38 million subscribers in US and Latin America for AT&T. This deal was planned after Time Warner Cable Inc. and Comcast Corp. announced their merger.
As Comcast and AT&T get bigger, they can negotiate better prices with video providers ranging from online streaming services to traditional cable networks.
AT&T highlighted that a minimum of 40% annual cost saving will be achieved in 2 years after the deal closes. Other potential revenue synergies are not factored into this forecast but there is the possibility to increase sales through the packaging of a higher number of services, offering video content on multiple screen systems and selling more advertising.