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Viacom Could Become AT&T Test Case

While Dish Network and AT&T continue to duke it out over HBO’s mandatory minimum subscriber requirements, Viacom could be the latest litmus test for the telco’s new plan to tie affiliate fees more closely to audience engagement.

On Oct. 24, AT&T Communications chief John Donovan said the company was evaluating the channel lineups at its pay TV properties — DirecTV, DirecTV Now, AT&T Watch TV and a new streaming service expected to begin rolling out next year.

John Donovan

John Donovan

“Content is the largest and fastest-growing cost of any video offering,” Donovan said on the call. “We’re evaluating our channel lineups and taking a fresh look at how we can align content cost with the price. It’s also about what customers want. And many want smaller, value-based video packages.”

UBS Securities analyst John Hodulik said Viacom could be the first major network outside of the AT&T fold forced to test that theory. Hodulik estimates that Viacom’s carriage deal with AT&T expires in the second half of 2019.