Get ready for the streaming wars to grow even more intense.
AT&T announced Wednesday that it plans to unveil a digital video service featuring WarnerMedia’s films and television shows by the end of next year, moving it into direct competition with rivals like Netflix, Disney and Amazon.
“We are committed to launching a compelling and competitive product that will serve as a complement to our existing businesses and help us to expand our reach by offering a new choice for entertainment with the WarnerMedia collection of films, television series, libraries, documentaries and animation loved by consumers around the world,” John Stankey, who oversees WarnerMedia, said in a statement.
That means that blockbuster Warner movies like the Harry Potter franchise and “Wonder Woman” could show up on the service next to TV shows like “Friends” and HBO hits like “Game of Thrones.”
Stankey appeared Wednesday at a conference hosted by Vanity Fair in Los Angeles but did not offer details about how much the service will cost, what its name will be or the date it will become available.
AT&T, which acquired Time Warner in June for $85.4 billion, had already said a key motivation for the deal was to crack into the streaming market, currently dominated by Netflix. The merger gave AT&T a vast media and entertainment portfolio that includes HBO, CNN, Cartoon Network, the rights to major sports leagues and valuable film franchises.
“We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers,” Randall L. Stephenson, AT&T’s chairman and chief executive, said at the time.
Streaming has become a crowded field as the once-robust TV business has suffered under a decline of cable and satellite customers. Netflix, a cheap alternative, has exploded in growth, and its model of both owning and distributing content has wowed Wall Street. Its stock has jumped more than 80 percent in the past year.
WarnerMedia already licenses its films and shows to other streaming businesses, but it will have to forgo that revenue once it carries that content exclusively for its own service. “Friends,” for example, a WarnerMedia property, is licensed to Netflix in a deal that will run out in a few years.
In an interview after his appearance, Stankey estimated that a quarter of the WarnerMedia library licensed to other streaming services comes up for renewal every year.
WarnerMedia already has several streaming products. Its best known is HBO Now, which was introduced in 2015 and now has over 5 million customers. Last month, WarnerMedia started selling a video subscription service offering feature films and shows based on characters from the DC Comics universe, another Warner property, that is being heavily marketed across studio lots in Hollywood.
Stankey described the new service as a “collection of boutiques,” with HBO as its “anchor tenant.”
As part of the introduction, HBO will sharply ramp up its programming slate, Stankey said. But HBO itself will remain focused on high-end entertainment and not become a warehouse for all Warner content, as some had feared.
“We need hours a day,” Stankey said at a town hall gathering with HBO employees this summer, referring to the time viewers spend watching HBO programs. “It’s not hours a week, and it’s not hours a month. We need hours a day. You are competing with devices that sit in people’s hands that capture their attention every 15 minutes.”
Later in that meeting, he said HBO must “build that brand so that it’s broad enough to make that happen.”
Now, it appears the streaming service would be more akin to a high-end mall, with HBO bringing in new customers.
“HBO is a really important brand, a really important property for us,” he said at the conference. “However, I don’t think HBO as its own stand-alone brand will meet the needs of the broad scale of audience and customers that we want to address.”
Though declining to say how much the coming service would cost, Stankey said that it would be more than HBO Now, which costs $15 a month. In addition to HBO and some Warner Bros. films, it will most likely include shows from its TV library. It will not include CNN.
Notably, AT&T’s service will coincide with a new offering from the Walt Disney Co., which also plans to start a streaming product next year.
Disney beat out Comcast in a fierce bidding war for the majority of 21st Century Fox, pushing to win the streaming market by stocking up on valuable content. In addition to a new streaming service aimed at younger audiences, Disney plans to invest more in Hulu, which it will control after overseas regulators approve its deal for 21st Century Fox, as well as ESPN+, a sports service that includes programming not seen on its flagship ESPN network.
“Disney doesn’t have a paid premium service like we do with HBO,” Stankey said. “We’re also AT&T. We already have tens of millions of direct consumer relationships.”
Comparing AT&T’s approach to Disney’s, he added, “What’s important to understand is that ours is a unified offering — we’re not expecting people to buy three different pieces.”
