AT&T’s new streaming service, HBO Max, will launch May 27, promising to ratchet up the so-called streaming wars.
The upcoming service will join an increasingly crowded field dominated by Netflix, Amazon Prime Video and Hulu. And HBO Max, which will be offered to consumers for $14.99 a month, will be among the most expensive of the video-on-demand offerings, which could prove challenging to AT&T’s media unit, WarnerMedia.
Although many consumers who have lost their jobs or had their pay reduced are cutting expenses, viewers who have spent months housebound may be eager to sample a new streamer, particularly if sporting events and other entertainment outside the home remain off-limits due to the coronavirus outbreak.
“They are sitting at a perfect window to launch — in the middle of a pandemic,” Eric Schiffer, chief executive of the Patriarch Organization, an Orange County venture capital firm, said Tuesday. “Audiences are craving any morsel of entertainment they can find right now, but the demand will dissipate as soon as people move back into their old lives.”
WarnerMedia is attempting a high-stakes pivot to embrace the streaming trend. It has spent the last 18 months developing HBO Max, but plans for an ambitious rollout of original programs were disrupted when film and TV production shut down in mid-March due to the COVID-19 pandemic. Suddenly, its goal of launching 38 new shows on the service this year was impossible. Undeterred, with employees working from home, the team scrambled to remain on schedule for a May launch and to cobble together a thin slate of originals.
“Even in the midst of this unprecedented pandemic, the all-star teams behind every aspect of HBO Max will deliver a platform and a robust slate of content that is varied, of the highest quality, and second to none,” Bob Greenblatt, chairman of WarnerMedia Entertainment and Direct-to-Consumer, said in a statement.
The company will rely on its rich library of established hits, including HBO dramas “Game of Thrones,” “Big Little Lies” and “Succession,” and Warner Bros. studio fare, including all 236 episodes of “Friends,” “The Big Bang Theory” and popular films from the DC Comics universe, including “The Joker” and “Wonder Woman.”
HBO Max will launch with six originals, but its splashy “Friends” reunion was put on hold. Instead, the service will have a scripted comedy, “Love Life,” starring Anna Kendrick; Sundance documentary “On the Record”; an underground ballroom dance competition series “Legendary”; and, for children, Sesame Workshop’s “The Not Too Late Show With Elmo.” The company expects to premiere additional new shows later in the year.
The service also will lean heavily on Warner Bros.’ film classics, including “Casablanca,” “The Wizard of Oz,” “The Matrix” and “When Harry Met Sally.”
Millions of AT&T subscribers will get HBO Max included in their plans; others will be offered promotional discounts. Customers of the existing HBO Now streaming service will be able to convert to HBO Max at no additional charge.
Since last fall, consumers have had a dizzying array of new subscription video-on-demand offerings. Apple TV+ launched in November, followed by Disney+, which has exceeded 50 million subscribers in just five months. Jeffrey Katzenberg and Meg Whitman’s millennial-focused Quibi, a Hollywood-based company that stands for “quick bites” of video, arrived in early April.
And last week, NBCUniversal introduced its ad-supported service, Peacock, to customers of its parent company, Comcast Corp. NBCUniversal plans to make the Peacock service available nationwide July 15.
But Netflix has become even more popular during this time of stay-at-home orders, according to data released this week by Parrot Analytics. In the U.S. in April, Netflix has commanded nearly 55% of viewing of streaming services, up from 50% in December, the firm found.
The streaming market is expected to grow. Cowen & Co. analysts predicted Tuesday that the pay-TV universe will lose another 21 million homes by 2025, particularly if the coronavirus tips the economy into recession.
For AT&T, moving more aggressively into video-on-demand appears to be the best shot at survival for its traditional media properties. Its cable channels, including TBS, TNT and Cartoon Network, have suffered a steep decline in ratings because fewer pay-TV homes receive them. AT&T’s DirecTV satellite TV service lost nearly 3 million customer homes last year.
Developing the HBO Max service (known in-house as “Max”) has been the top priority for AT&T’s brass, including Chief Operating Officer John Stankey, since the Dallas telecommunications giant purchased Time Warner Inc. in June 2018 and renamed the media company WarnerMedia.
AT&T’s goal is to keep its phone customers in the fold with easy access to high-quality television shows. And, unlike Netflix, AT&T’s WarnerMedia plans to rotate its content offerings. The company also will have the unique ability to promote the service to AT&T’s more than 100 million mobile subscribers.
Earlier this month, AT&T named Jason Kilar, the architect of the Hulu streaming service, as WarnerMedia’s new CEO. He starts May 1, nearly four weeks ahead of the launch of HBO Max.