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WarnerMedia announces new streaming service to compete with Netflix and Disney

WarnerMedia announces new streaming service to compete with Netflix and Disney
John Stankey, CEO of AT&T Entertainment Group, hosts a panel discussion at the AT&T Shape conference, held at the Warner Bros. studios in Burbank, on July 15, 2017. (Marcus Yam / Los Angeles Times)

WarnerMedia, the parent company of Hollywood studio Warner Bros., fired a new salvo in the direct-to-consumer wars reshaping Hollywood.

The AT&T-owned media company is planning a streaming service that will launch late next year, WarnerMedia Chief Executive John Stankey said in a statement Wednesday.

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The service, which will compete with existing streaming giant Netflix and an upcoming offering from Walt Disney Co., will include films and TV shows from HBO, Turner and other WarnerMedia properties. CNN will not be included, Stankey said during remarks at the Vanity Fair New Establishment Summit in Beverly Hills.

He did not reveal what the subscription price would be.

“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,” Stankey said.

The announcement comes after AT&T in June completed its $85-billion acquisition of Time Warner assets, including the Warner Bros. film and television studio in Burbank; HBO; and the Turner networks, TBS, TNT, CNN, Cartoon Network and Turner Classic Movies. The new service, which is a top priority for Stankey, is expected to launch in the fourth quarter of 2019.

Dallas-based AT&T had previously hinted at the plans. AT&T Chairman Randall Stephenson said last month at an investor conference that the company was planning a service to stream its vast library of shows and movies.

Stankey signaled this summer that HBO, known for such acclaimed shows as “Westworld” and “Insecure,” needed to increase its volume of programming to keep consumers engaged for longer periods of time. HBO will continue to be available as a stand-alone streaming service, at least for now. That service costs $14.99 a month.

"You're going to see a stronger HBO as this offering comes to market," Stankey said at the Vanity Fair conference.

One of AT&T’s missions for WarnerMedia, the new name for the company formerly known as Time Warner, is to boost the time people spend using data on their mobile devices, which could help the company keep subscribers.

AT&T has more than 100 million wireless subscribers and 25 million pay-TV customers. Offering a new streaming service with programs including “The West Wing,” “Friends” and “Game of Thrones” could help expand that reach. Warner Bros. remains a crown jewel, with such film franchises as the blockbuster “Harry Potter” series and DC superhero movies such as “Wonder Woman.”

Disney’s much-discussed streaming service — which will include original content from Marvel Studios, Pixar and other brands — is also expected to launch sometime next year. The initiative is a top focus for Disney CEO Bob Iger, who aims to turn the Burbank media giant into a digital powerhouse. Disney is poised to complete its $71.3-billion acquisition of 21st Century Fox Inc. entertainment assets, which are meant to bolster its streaming plans.

As the number of streaming services grows, there is increasing competition among media companies to be a leading entertainment portal for consumers. Netflix, Amazon, Apple, YouTube and Facebook are spending billions on original content to grow their streaming audiences. Stankey did not say if WarnerMedia would create original content for its service, but a person close to the company said that would eventually happen.

Stankey said he views the new streaming service as a collection of top-tier content, with boutiques that meet specific customer needs, rather than a Netflix-style smorgasbord of shows and movies. HBO would be seen as the anchor tenant.

“My job is not to build another Netflix,” he said.

This is not AT&T's first foray into streaming. The company launched DirecTV Now in 2016 to mitigate the flight of consumers from traditional pay-TV packages. And in June, the telecommunications giant introduced WatchTV, a "skinny bundle" with more than 30 live channels, for $15 a month as a stand-alone service.

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WarnerMedia’s streaming efforts, until now, have mostly been limited to offerings tailored for specific audiences. The company has the subscription streaming service FilmStruck, aimed at cinephiles, and Bleacher Report Live, launched for coverage of UEFA Champions League soccer.

2:05 p.m.: This story was updated with more details on AT&T’s other streaming efforts.

11:30 a.m.: This story has been updated with additional information about WarnerMedia’s planned streaming service, Disney’s upcoming rival and quotes from WarnerMedia CEO John Stankey.

This article was originally published at 10:25 a.m.

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