AT&T reported that business didn’t go so well in the third quarter. In an earnings call earlier this morning, the company reported that they lost a whopping 1.16 million traditional pay TV subscribers and another 195,000 AT&T TV NOW subscribers, leaving AT&T TV NOW with just 1.1 million subscribers, from a peak of 1.8 million last year. Now, it seems like they are hinging a lot of their hopes on HBO Max.
The streaming service, which is set to launch in spring 2020 is expected to “drive growth” not only to WarnerMedia, but to AT&T as a whole. AT&T hopes HBO Max will help the company retain wireless subscribers, and give the company the chance to pair wireless and DIRECTV satellite data in order to learn more about consumers. This, in turn will allow AT&T to charge higher rates to their advertisers.
“HBO Max will become the workhorse for our video product as we move into next year,” stated AT&T chairman and CEO, Randall Stephenson. “All of the muscle and range of investment is going behind HBO Max.” The company which made it clear that they are not beyond selling DIRECTV as there are no “sacred cows,” mentioned that the “lion’s share of ads” will also be moving to HBO Max. WarnerMedia expects the new streaming service to hit 50 million subscribers within the next five years.
With Disney+ and Apple TV+ launching and standing competition from Netflix, Amazon Prime Video and Hulu, the company maintains they are not worried about standing out as HBO Max is a different product from the rest. “The field in terms of where we intend to play is not that crowded. We are starting with a product called HBO, which has a very significant position in the marketplace…we are investing heavily behind that brand and bringing additional content,” Stephenson continued.
“This is a product that is very different from everything else that you’ve seen in he market so far. It’s going to have a very unique position in the marketplace. This is going to be a meaningful business for us over the next 4-5 years.”
Further details on the streaming service were kept mum and reserved for their media day taking at the Warner Bros. lot in Burbank tomorrow.