On Wednesday, AT&T revealed its plans to launch a new direct-to-consumer streaming service in late 2019. The service will use content from AT&T’s recently acquired HBO, Turner and Warner Bros.
In an SEC filing, AT&T said the new service “will serve as a complement to our existing businesses” and offer the “WarnerMedia collection of films, television series, libraries, documentaries and animation.”
“We expect to create such a compelling product that it will help distributors increase consumer penetration of their current packages and help us successfully reach more customers,” AT&T wrote.
AT&T plans to fund its new plans through a combination of incremental efficiencies within the WarnerMedia operations, consolidating resources from subscale direct-to-consumer efforts, fallow library content and technology reuse.
“We expect to defer some licensing revenues to later periods in the form of increased customer subscription revenues,” AT&T wrote.
John Stankey, CEO of WarnerMedia, spoke about his company’s new direct-to-consumer plans during a Vanity Fair conference. He didn’t say how much the service would cost but did say that it will be priced at a premium to HBO’s existing standalone app, HBO Now. That service costs $14.99 per month.
DTC price point will be a premium to HBO standalone - but won't announce till closer in till launch date in late 2019 -- John Stankey $T @andrewrsorkin #VFSUMMIT @VanityFair @VFHIVE pic.twitter.com/m7KcuksbSH— Rich Greenfield (@RichBTIG) October 10, 2018
AT&T already has a big portfolio of streaming video services. The company runs virtual MVPD DirecTV Now and, through its WarnerMedia acquisition, it also owns B/R Live and DC Universe, FilmStruck, Boomerang and DramaFever. AT&T also recently took on full ownership of Otter Media, its streaming video joint venture that runs Crunchyroll, VRV and other services.
The new WarnerMedia direct-to-consumer product, however, appears to be a response to Disney’s plans to launch a branded streaming service next year. The WarnerMedia streaming product will also compete directly with Amazon and Netflix.