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 The stakes are high for AT&T, which is saddled with debt from a
$134 billion acquisition spree to combine media conglomerate
Time Warner and satellite TV provider DirecTV with the
second-largest U.S. wireless phone company by subscribers.
The success of HBO Max is in many ways a referendum on a
strategy to merge content with the means to distribute it.
To make it work, AT&T has committed to invest between $1.5
billion to $2 billion in HBO Max content next year and an
additional $1 billion in 2021 and 2022, executives said this
week after reporting tepid media results for the third quarter.
The investment falls far short of its biggest rival Netflix Inc
<NFLX.O>, which has earmarked $15 billion in cash on content
spending in 2019. But AT&T and WarnerMedia executives intend to
play up why they believe they deserve a seat at a table that
also includes Apple Inc <AAPL.O>, Walt Disney Co <DIS.N> and
Amazon.com <AMZN.O>.
WarnerMedia Chief Executive John Stankey, who was recently
elevated to the role of chief operating officer of all of AT&T
in a sign of just how critical the performance of HBO Max is to
the company, and other executives including WarnerMedia
Entertainment Chairman Robert Greenblatt will also discuss how
the company plans to bundle the streaming service with other
AT&T products across the portfolio to quickly add new customers.
This month Stankey told Reuters that HBO Max will be available
this spring to 10 million current AT&T customers in the United
States -- a mix of wireless, satellite TV, and some HBO Now
subscribers -- at no extra charge.
By 2025, AT&T aims to reach about 80 million global subscribers,
with about 50 million of these coming from the United States, a
source briefed on the plans told Reuters.
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Executives said investors and analysts gathering at Stage 21 on the
Warner Brothers Studio lot in Burbank, California, on Tuesday should
expect to hear about the breadth of new original programming and the
depth of WarnerMedia’s extensive library of films and TV series --
likely with appearances from well-known entertainers and producers.
Although the Warner Brothers library includes popular content like
“The Shining” and “Scooby-Doo” -- and the HBO brand is known for
edgy, high-quality programming -- it does not have the same brand
awareness as Pixar, Marvel or Disney properties that will be
included in the Disney+ streaming service that is launching on Nov.
12.
And as one of the latest entries in the streaming wars, by its
spring launch HBO Max will be competing for household dollars that
may have already been allocated to rivals.
Price could also be a challenge: HBO Max is likely to cost slightly
more than the $14.99 the company charges for HBO -- significantly
more than competing services from Apple ($4.99) and Disney ($6.99),
and slightly higher than the standard $12.99 plan from Netflix.
WarnerMedia is hoping that with HBO Max, it can continue serving
HBO’s core over-40 audience, and expand to include younger viewers
who may prefer to stream content and do not want to pay for cable.
"This is a product that's going to be very different from anything
else that you've seen in the market so far," AT&T Chief Executive
Randall Stephenson said on Monday. "This is not Netflix. This is not
Disney. This is HBO Max."
(Reporting by Helen Coster in Burbank, California; Editing by
Kenneth Li and Lisa Shumaker)
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