AT&T Chief Outlines Future WarnerMedia Streaming Platform

At the UBS Global Media and Communications Conference, AT&T chief executive Randall Stephenson revealed that investing in more HBO programs is a target for the coming year, as WarnerMedia readies its direct-to-consumer subscription platform due to launch by end of 2019. HBO will anchor the as-of-yet unnamed service, which will also offer original programming and other WarnerMedia content year-round. Stephenson did stress, however, that AT&T won’t spend the $11 billion that is Netflix’s current annual budget for content.

Variety reports that, “the WarnerMedia offering would be a more curated effort that may eventually encompass programming from ‘third-party’ producers.” Stephenson also addressed the fact that 2018 was not a good year for DirecTV, which had “significant subscriber losses,” describing a strategy of “thinning out” channels that aren’t relevant to its customers.

“The days of media companies accumulating massive amounts of content and shoving oversized bundles down on the consumer — those days are gone,” said Stephenson. “There are a large number of customers saying we’re not paying those kind of prizes.” A slimmed down bundle will keep the service between $50 and $60, and the company plans to debut a less expensive one in Q1 2019.

The AT&T Watch package will provide live streaming of 30 or so cable channels for $15, “as an incentive to help reduce churn among AT&T’s wireless customers” and free for those who sign up for the telecom’s unlimited wireless data plan. Stephenson noted that its NFL Sunday Ticket offering has limited value because the rights are restricted to DirecTV’s linear channel feed. He also reported on the rollout of 5G high-speed services, which will continue throughout the second half of 2019 and “expand AT&T’s network capacity by 50 percent.”

“I’m as energized about 5G as any technology that we’ve ever deployed,” he said.

Stephenson brought up the issue of reruns of the popular TV show “Friends.” The New York Times reports that Netflix will continue to be able to stream the show for “at least another year.” But the show’s owner, WarnerMedia, is charging Netflix $100 million to license the show, said sources. Previously, Netflix paid $30 million to stream the show. The new amount, says NYT, “reflects the thirst for content in the streaming age.”

Last weekend, when customers saw a notice on Netflix’s “Friends” page that it would only be available until 1/1/19, “some of the show’s fans turned apoplectic.” Netflix’s Ted Sarandos later assured viewers that, after negotiations with AT&T, the show would remain.

With AT&T’s purchase of Time Warner for $85.4 billion, it acquired HBO, CNN and the Warner Bros. film and TV studios, with their plethora of premium programming. With regard to “Friends,” Stephenson said, “that’s content we definitely want on our platform,” adding that the new agreement is non-exclusive, which means it will likely to carried on AT&T’s new streaming platform in 2020. If Netflix also runs the show, it expects to pay significantly less than $100 million.