WarnerMedia Launching Direct-To-Consumer Streaming Service

AT&T

WarnerMedia boss John Stankey announced the company will throw down the gauntlet against Disney and digital competitors with a new direct-to-consumer streaming service launching by the end of 2019.

Stankey said WarnerMedia would launch a streaming service that would draw from the media company’s broad collection of films, television shows, animation and its library. This new OTT offering would augment the media company’s other streaming services, like HBO Now.

“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,” Stankey said in a statement.

Taking the stage at the Vanity Fair New Establishment Summit just after the streaming service announcement went out, Stankey elaborated on the strategy behind the launch. The objective will be to capture the full potential of the former Time Warner assets, for which AT&T forked over $100 billion including the assumption of debt.

HBO

“HBO is one of the best values in the market right now,” he asserted. “Clearly what we want to do here is we want to ensure what we’re offering on a combined basis is compelling.”

He added, “The combined offer will not look like anything out there. … Our job isn’t to build another Netflix. Our job is to build a compelling content” offering.

WarnerMedia, the new corporate name for the former Time Warner assets formally acquired in June, has developed a notable number streaming offerings thus far, compared with other traditional companies. (Comcast, for example, has just one subscription service to date.)

Stankey declined to provide details about the pricing, other than to note that, “by default,” it would be more expensive than HBO.

HBO Now launched its $15-a-month offering in 2015 and passed 5 million subscribers at the start of 2018. Last month, WarnerMedia launched DC Universe, a $9 a month site for comic-book fans, which will feature streaming series like Titans and others derived from the DC library. Another offering is FilmStruck, a streaming destination for cinephiles.

Parent AT&T, meanwhile, has also moved aggressively to meet demand for streaming options. It unveiled its $15-a-month Watch service earlier this year, after debuting skinny-bundle service DirecTV Now in 2016. Although DirecTV Now is closing in on 2 million subscribers, that’s still a small fraction of the traditional satellite base for DirecTV.

Disney, which is closing in on its $71.3 billion acquisition of most of 21st Century Fox, plans to tap Fox’s IP for a new streaming service launching at the end of 2019. It has also been pulling its titles off Netflix, sacrificing the licensing revenue in the short term in the hopes of gaining longer-term subscriber revenue.

Netlfix, which has more than 125 million global subscribers, including 56 million in the U.S., is expected to report its latest numbers on Tuesday during its third-quarter earnings report.