The launch of a new subscription video streaming service was a keystone in AT&T’s $85 billion deal for Time Warner, CNN’s parent company.
After a lengthy court fight, the deal took effect in June 2018, and management has been working on plans for HBO Max ever since.
The brand name is known, and so is the spring 2020 launch window, but the company has been holding back details such as the monthly cost of the service.
That will change Tuesday afternoon when AT&T holds a much-anticipated presentation for key investors on the famed Warner Bros. studio lot in Burbank, California.
The iconic Warner Bros. water tower has been rechristened with an HBO Max logo for the occasion.
“This is a big deal,” AT&T CEO Randall Stephenson said in an interview from the studio lot, where he released third quarter earnings on Monday.
Stephenson said Tuesday’s preview event is a culmination of more than a year’s worth of WarnerMedia restructuring and rethinking.
“You’re going to see the result of something that a lot of people said couldn’t be done when we did the Time Warner deal, and that is, breaking down the three silos within Time Warner,” he said.
The media company previously had three divisions – HBO, Warner Bros and Turner – with relatively little synergy between them.
Veteran AT&T executive John Stankey became WarnerMedia CEO when the deal took effect and dismantled some of the walls that had been built up over the years. Depending on who you ask internally, the process has been painful or helpful, disruptive or necessary.
By “bringing these three companies together, we’re creating something really really powerful together that could not have been done otherwise,” Stephenson said. “The idea that you can stand up a product, HBO Max, that requires in-depth integration of HBO, Warner Bros and Turner, not to mention Otter Media, which is a big part of this as well – man, a lot of people said it couldn’t be done. This is exciting.”
AT&T said Monday that it intends to spend about $2 billion on HBO Max in the next two years.
The company’s stated goal is to sign up 50 million subscribers by 2025, five years into the service’s launch.
AT&T has more than 170 million customers across its wireless, telephone, broadband, and television businesses. Those customers will be seeing extensive promotions for HBO Max in the coming months.
HBO already offers a streaming subscription option for its programming, known as HBO Now.
But HBO Max will have a much fuller library of TV shows and films – more than 10,000 hours of programming.
It is a more direct challenge to the likes of Netflix, though industry experts emphasize that the so-called “streaming wars” are not a zero-sum game, since many households sign up for multiple such services.
Netflix, Amazon Prime and Hulu have a huge head start. On Friday Apple is introducing a subscription bundle of shows called Apple TV+. And in mid-November Disney is entering the space with Disney+.
Tuesday’s event will give WarnerMedia an opportunity to present its vision and plan. Dozens of deals for TV dramas, sitcoms, films, documentaries, and other programming have been announced in recent months. And plans for further programming will be unveiled on Tuesday.
“The Max part of it is new original programming to broaden it out from kids to adults,” WarnerMedia Entertainment chairman Bob Greenblatt said at a conference earlier this month.
Past hits like “Friends” and “The West Wing” will also be available, in some cases because they’re being pulled off of Netflix.