AT&T reveals date HBO Max will take on Disney, Netflix

BURBANK, Calif. (Reuters) – AT&T Inc (T.N) executives on Tuesday said the company’s HBO Max streaming video service that will launch in May 2020 is expected to reach 75 million to 90 million global subscribers by 2025, with about 50 million of these coming from the United States.

The logo for WarnerMedia’s new HBO Max service is seen in this handout photo obtained on October 25, 2019. WarnerMedia/Handout via REUTERS/File Photo

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 (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 took the stage to discuss how the company’s portfolio of businesses in programming, communications, distribution and marketing contributed to the making of HBO Max.

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.

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.

Ahead of the presentation, HBO cancelled a much-anticipated prequel to the “Game of Thrones” starring Naomi Watts, one source familiar with the matter said, confirming reports in Hollywood media. WarnerMedia executives are expected to make new announcements about “Game of Thrones” during the presentation, the source said.

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, HBO Max will be competing for household dollars that may have already been allocated to rivals.

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 and Lisa Richwine in Burbank, California; Editing by Kenneth Li and Lisa Shumaker

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