October 12, 2018
By the end of 2019, AT&T is slated to introduce a digital video service featuring WarnerMedia films and TV shows. That will include such blockbusters as “Wonder Woman” and the Harry Potter franchise as well as HBO’s “Game of Thrones.” The deal comes on the heels of AT&T’s purchase of Time Warner in June for $85.4 billion. The company made it clear then that the main motivation for the acquisition was to launch a streaming video service. So far, no details have been revealed on the service’s name, price or date that it will be launched.
The New York Times quoted WarnerMedia head John Stankey as saying that the company is “committed to launching a compelling and competitive product that will serve as a complement to our existing businesses and help us to expand our reach by offering a new choice for entertainment with the WarnerMedia collection of films, television series, libraries, documentaries and animation loved by consumers around the world.”
AT&T chair/chief executive Randall Stephenson added that, “we’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers.”
According to Stankey, “a quarter of the WarnerMedia library licensed to other streaming services comes up for renewal every year,” but AT&T will lose licensing revenue if it carries the content exclusively on its own service. Among existing WarnerMedia streaming services is HBO Now, which debuted in 2015 and now boasts over five million users.
Stankey described the upcoming service as a “collection of boutiques,” with HBO as its “anchor tenant.” HBO will “sharply ramp up its programming slate” to help introduce the new service, but “will remain focused on high-end entertainment and not become a warehouse for all Warner content.” Stankey said the new service will cost more than HBO Now, priced at $15 per month. It also “will coincide with a new offering from The Walt Disney Company, which also plans to start a streaming product next year.”
The Wall Street Journal reports that Stankey said, “AT&T won’t be pulling all of its programming off third-party services like Netflix, which have helped boost Time Warner’s profits for years,” but could potentially restrict new and older content to run exclusively on AT&T’s service, adding that new subscribers’ fees would make up for the loss in licensing revenue.
Although Stankey said his task is not to build another Netflix, “we better be at that table when the customer makes that decision: That is a collection of things I must have.” CW Networks (a joint venture between Warner Bros. and CBS) has benefited in two ways from licensing its shows to Netflix: it’s made CW Networks profitable and driven viewers to sample fare on the network itself. Stankey declined to state whether AT&T will renew that deal when it expires.
AT&T first moved into streaming TV in 2016 with DirecTV Now, an online-only TV package. Now that it has control of HBO, Turner channels TNT and TBS and the Warner Bros. film studio, “it is pushing harder for a more collaborative environment.” The new service, however, will not include news from CNN.