AT&T Inc , in May will launch its HBO Max streaming service with a new “Game of Thrones” series at the current HBO price of $15 a month in an aggressive move to battle Netflix, Disney and Apple for the future of TV.
The price, which many expected to be higher, surprised the financial analysts and investors attending the WarnerMedia presentation recently.
HBO Max is expected to reach 75 million to 90 million global subscribers by 2025, with about 50 million of these coming from the United States. The new service is expected to generate about $5 billion in U.S. revenue by 2025.
The stakes are high for AT&T, which is saddled with debt from a $134 billion acquisition spree to combine media conglomerate Time Warner and satellite TV provider DirecTV with the second-largest U.S. wireless phone company by subscribers.
The success of HBO Max is in many ways a referendum on a strategy to merge content with the means to distribute it. HBO, which invented high-end, subscription programming, is playing catch-up in the streaming era dominated by Netflix.
To compete, AT&T has committed to invest up to $4 billion in additional HBO Max content by 2025, executives said, just a day after reporting tepid media results for the third quarter.
WarnerMedia Chief Executive John Stankey this month told Reuters that HBO Max will be available this spring to 10 million current AT&T customers in the United States - a mix of wireless, satellite TV, and some HBO Now subscribers - at no extra charge.
WarnerMedia is hoping that with HBO Max, it can continue serving HBO’s core over-40 audience, and expand to include younger viewers who may prefer to stream content and do not want to pay for cable.
“This is not Netflix. This is not Disney. This is uniquely HBO Max,” AT&T Chief Executive Randall Stephenson said.
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