AT&T Inc.  (NYSE: T) CEO Randall Stephenson is no Hollywood bigwig. The Oklahoma native has spent his entire career in the far less flashy telephone business, beginning with Southwestern Bell more than 30 years ago and culminating as head of the No. 2 U.S. wireless carrier. But as the media and communications industries converge, Stephenson knows it's time for him, AT&T and its investors to step outside their comfort zone, as risky and costly as that will be.

Over the weekend, the company announced a $108.7 billion takeover of Time Warner Inc. (NYSE: TWX) (or $85.4 billion excluding net debt, paid half in cash and half in stock), that gives AT&T control of HBO, CNN and TBS. Until now, AT&T has merely functioned as a conduit for such video content, via its subscription wireless-phone, internet and pay-TV services, the last of which it expanded through its $67 billion takeover of DirecTV. Demand for video streamers has been rising, as consumers watch more content on the Internet and mobile devices.

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