AT&T Prepares For Blockbuster Week With Earnings And HBO Max Reveal On Tap


AT&T and its WarnerMedia division are preparing for a big start to next week, with the parent company reporting earnings Monday and WarnerMedia showcasing HBO Max at an investor day on Tuesday.

A wealth of details about HBO Max, including subscriber projections and pricing, will be revealed at the event on the Warner Bros. lot. On Friday, the company confirmed to Deadline that complementary access to the streaming service will be provided to about 10 million subscribers to HBO on AT&T pay-TV platforms DirecTV, U-verse cable and AT&T TV. AT&T’s wireless networks, which extend the company’s reach to about 170 million overall customer connections, will offer additional opportunities for promoting the service.


AT&T CEO Randall Stephenson has said the company will leverage its MVPD relationships to quickly reach “tens of millions” of subscribers to HBO Max. The service, fed by HBO and other divisions of WarnerMedia and overseen by AT&T CEO John Stankey, WarnerMedia entertainment chairman Bob Greenblatt and direct-to-consumer content chief Kevin Reilly, is competing in a crowded field. Disney, Apple and NBCUniversal are all mounting challenges to Netflix, Amazon and Hulu.

Pricing is a conundrum for HBO Max, especially with rival services like Disney+ and Apple TV+ having staked out the low end of the spectrum. Disney is at $7 a month, with money-saving promotions like a bundle with Hulu and ESPN+ and a free-for-one-year deal with Verizon. Apple is charging $5 a month, but is offering its streaming service free for a year to anyone who buys one of its devices. Netflix’s most popular plan, meanwhile is $13 a month. HBO Now, the stand-alone streaming service, has been $15 since launching in 2015, and the premium network faces a challenge in going lower than $15 given its many MVPD relationships. “Most-favored nation” clauses could be invoked if the company were to undercut what those distributors are charging customers.

An ad-supported version of HBO Max, which has long been touted in AT&T’s public positioning of its streaming plans, will not launch until 2021, according to a source familiar with the rollout. The live sports offering teased this year by Stephenson on an earnings call is likely to be added once the AVOD version is up and running. Initially, executives described a “three-tier” pricing structure for HBO Max, but that plan has evolved in recent months into a single subscription price at launch, followed by a cheaper ad-supported offering. CBS All Access and Hulu are among streaming players incorporating advertising into their offerings. NBCU’s Peacock, launching in April, will be ad-supported.

John Hodulik, an analyst with UBS, wrote this week in a note to clients that he expects HBO Max to cost $12 a month. In an interview with Deadline, Hodulik said he expects the revenue WarnerMedia could take in from the more attractive price point would more than offset any friction with distributors. “It depends on how each of those contracts is worded, and that’s something they’ve probably been taking a much closer look at,” he said.

Traditional pay-TV carriage is getting more and more complicated as options for consumers proliferate. HBO has been dark on Dish Network for nearly a year in a dispute that endured even through the run of the last season of Game of Thrones, the premium network’s most-watched series. Dish has insisted HBO has not come to the bargaining table with a reasonable offer (a notion HBO refutes) and has pointed dissatisfied customers to the streaming option. Talks are currently inactive. Hodulik, like many observers, does not expect HBO to return to Dish.

AT&T’s quarterly earnings reports are always a significant date on the business world calendar, but Monday’s edition brings an extra element of intrigue thanks to hedge fund Elliott Management. The activist investor released a letter to the AT&T board last month noting it had accumulated a roughly 1% stake in the telecom giant and making its case for how to unlock value. It lamented the pricey acquisitions of DirecTV and Time Warner, among other things.

The company also announced two transactions Friday. Neither is headline-grabbing but both indicate that the nips and tucks are far from over.

AT&T said it agreed to a $680 million sale-leaseback of its remaining domestic wireless towers to Peppertree Capital Management. The deal will see Peppertree buy more than 1,000 AT&T towers, and AT&T will lease back capacity on the towers from the firm.

WarnerMedia, meanwhile, said it has reached a deal to buy Ole Communications’ minority stake in HBO Ole Partners, the joint venture between WarnerMedia and Ole. When the transaction closes, WarnerMedia will own 100% of all HBO, MAX, Cinemax and HBO Go services in Spanish-speaking Latin America and the Caribbean. The ownership structure of HBO Brasil Partners, another joint venture between the companies that operates HBO in Brazil, is unaffected. WarnerMedia and Ole will continue their basic channel distribution business in Latin America.

Reuters was the first to report about the grandfathering-in of HBO Max for current HBO subscribers on AT&T platforms.

This article was printed from