WarnerMedia’s streaming service won’t be a three-tiered product, analyst says

Game of Thrones
WarnerMedia's initial DTC product will likely incorporate HBO and Warner Bros. film and TV library content. (HBO)

Early word from AT&T executives suggested that WarnerMedia’s upcoming streaming service would be a three-tiered product. But one industry analyst says that’s not so.

MoffettNathanson analyst Craig Moffett recently interviewed WarnerMedia CEO John Stankey, who said the initial direct-to-consumer product will be a single offering to make it straight forward and easy to understand for consumers. Moffett said that this brings WarnerMedia’s streaming strategy closer in line with what Netflix does, and what Disney plans to do with Disney+ later this year.

“We see this as an obvious improvement over multiple offering and more akin to other traditional approaches,” Moffett wrote in a research note.

WarnerMedia will use the existing HBO OTT product, including its library, along with library titles from the Warner Bros. TV and film library. Stankey said the film library is an important differentiator for the WarnerMedia service, which will attempt to position itself between Netflix’s mass amounts of content and Disney’s more condensed service.

MoffettNathanson said it expects the WarnerMedia service to be priced above Disney+ (which will cost $6.99 per month when it launches on Nov. 12), and maybe even “quite significantly” higher priced. The analyst firm also said that the WarnerMedia service will launch a 2.0 version that will include an ad-supported viewing option in its second year. The firm said that AVOD service could include innovative ad loads and content that isn’t available in the SVOD service. It could also let third-party content owners to share the ad revenues.

RELATED: WarnerMedia’s SVOD will be heavy on the HBO content

In terms of continuing to license content, the report said WarnerMedia’s strategy still isn’t clear. The company will likely pull back some content to drive certain demographics to the service will continuing to license some content to third parties in exclusive and non-exclusive deals.

MoffettNathanson’s report also touched on WarnerMedia’s international rollout plans for the service. The firm said it believes Latin America and Europe launches will come along quickly after the U.S. debut of the service. WarnerMedia still needs to decide on time frames for launches in Asia and Africa.

While the service doesn’t have a name yet, MoffettNathanson’s interview with Stankey suggested that the HBO brand might not be broad enough for the demographics WarnerMedia wants to attract, and that the WarnerMedia name is not recognizable enough with consumers.