AT&T, the owner of WarnerMedia, plans to deploy its HBO Max streaming service to its existing customers, with aggressive targets for the new setup.
The service, which will include HBO shows, new originals, as well as much loved shows like "Friends", will be available next year to AT&T customers who are also HBO subscribers in the US, Reuters reports. This is around 10 million customers in the overlap. The company expects an uptick in users in 2021, when it launches a lower-cost ad supported option. Soon after, users will get access to live programming.
Its targets are ambitious: by 2025, a source tells the news service, the telco is hoping to reach 80 million consumers around the world, with a 50 million-strong audience in the United States. The aim is to emulate some of its streaming competitors, notably Netflix, though it is emerging onto a far more crowded marketplace than when Netflix began streaming content: it will now have to vie with new entrants armed with plus-signs, Disney and Apple.
With a likely price of over $14.99, HBO Max would cost a little more than basic HBO, and a lot more than its competitors – Netflix costs $12.99, while Apple+ and Disney+ are set to cost $4.99 and $6.99 respectively.
At its core, the news illuminates AT&T’s strategy for keeping customers tied into its wireless business through additional benefits. In the longer term, executives tell Reuters, a further goal is to combine the data collected both from wireless and DirecTV satellites in order to dangle deeper insights in front of advertisers and charge them more for it.
Of course, that plan is not without its critics. In May, a Fortune profile of CEO, Randall Stephenson, surfaced AT&T’s strategic intentions to combine viewing data with the kind of location data a phone company can hold. Despite the fact that the data is anonymized, there are still major concerns; the Verge’s Nilay Patel, in particular, takes the plans to task.
“The success of HBO Max is built on the ability for the company to rationalize why (the companies that AT&T bought) all belong together,” AT&T Chief Operating Officer, John Stankey tells Reuters.
It’s not a direct route to reward. Some investors are putting pressure on the leadership to justify such an expensive acquisition as the $85 billion the telco paid for Time Warner (now WarnerMedia), especially after the $48.5 billion purchase of DirecTV has seen subscribers migrate away from the service.
“We didn’t buy DirecTV because we love satellite,” said Stankey. “We bought DirecTV because we love the customer base and the customer base could be migrated into more on-demand-oriented products and services.” The plan’s success will rest on the company’s ability to vastly expand its audience – it’s going to be a significant marketing job.
Sourced from Reuters, Fortune, the Verge