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What Holds AT&T Back in Battle with Netflix and Amazon

If Donald Trump follows through on his promise to block AT&T’s purchase of Time Warner, the telecom firm will escape a potentially disastrous combination with a company whose TV business faces long term declines. But in the near term, AT&T will miss out on the profit boost Time Warner would have given it.

And that has implications for AT&T’s planned video streaming offering DirecTV Now, the latest in a series of cable-like packages of TV channels offered at a much lower price than regular cable.

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All the video-streaming services will eventually need to make some money, most likely by raising prices. A shakeout is also likely to reduce the number of services. Given the financial challenges facing AT&T, DirecTV Now looks to be one that won’t last.

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Investors in Netflix and Amazon for years have shown a willingness to put up with red ink based on the idea those companies are growing and will eventually turn a profit.