AT&T Just Revealed Some Key Details About Its Netflix Competitor

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="AT&amp;T (NYSE: T) has been working on a new streaming video service for the better part of a year following its successful acquisition of Time Warner (now called WarnerMedia). Management has provided some info about the service, including floating the idea of three tiers of service, but it finally issued a&nbsp;press release&nbsp;today announcing the service it’s calling HBO Max.” data-reactid=”11″>AT&T (NYSE: T) has been working on a new streaming video service for the better part of a year following its successful acquisition of Time Warner (now called WarnerMedia). Management has provided some info about the service, including floating the idea of three tiers of service, but it finally issued a press release today announcing the service it’s calling HBO Max.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The release provides several key details about WarnerMedia's streaming plans that could be essential for AT&amp;T investors as well as competitors like Netflix (NASDAQ: NFLX) and Disney (NYSE: DIS).” data-reactid=”12″>The release provides several key details about WarnerMedia’s streaming plans that could be essential for AT&T investors as well as competitors like Netflix (NASDAQ: NFLX) and Disney (NYSE: DIS).

Here’s what we know so far about HBO Max:

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Image source: AT&T.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="It has everything but Cinemax” data-reactid=”26″>It has everything but Cinemax

Despite its name, HBO Max apparently will not include content from Cinemax. Customers who want access to Cinemax originals and its library of licensed films will have to pay their cable provider. WarnerMedia doesn’t offer a direct-to-consumer version of Cinemax like it does with HBO.

The release said HBO Max will include “programming from Warner Bros., New Line, DC Entertainment, CNN, TNT, TBS, truTV, The CW, Turner Classic Movies, Cartoon Network, Adult Swim, Crunchyroll, Rooster Teeth, Looney Tunes and More” on top of all of HBO’s content and new originals.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="WarnerMedia won't be able to offer every piece of content from its networks to its subscribers, however. For example, it has series-run deals in place with Netflix for its existing CW series. So, shows like Riverdale and The Flash will still be on the streaming leader for as long as they’re still on the air. Other back-catalog content may be locked up for some time in existing contracts with other streaming services like Hulu, of which WarnerMedia previously owned 10%.” data-reactid=”29″>WarnerMedia won’t be able to offer every piece of content from its networks to its subscribers, however. For example, it has series-run deals in place with Netflix for its existing CW series. So, shows like Riverdale and The Flash will still be on the streaming leader for as long as they’re still on the air. Other back-catalog content may be locked up for some time in existing contracts with other streaming services like Hulu, of which WarnerMedia previously owned 10%.

Still, the service will launch with over 10,000 hours of content, which ought to keep subscribers busy while they wait for the next HBO original debut.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="There’s a big content budget” data-reactid=”31″>There’s a big content budget

AT&T didn’t provide exact details on how much it plans to spend on content for HBO Max, but the budget looks to be pretty substantial.

It announced a 50% increase in HBO Original spending. Prior to its acquisition, HBO spent about $1.1 billion on its original series, films, and sports programming. The company is spending an extra $500 million or so on HBO content alone.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="On top of that, it bought the exclusive rights to Friends, The Fresh Prince of Bel-Air, and Pretty Little Liars. It’s also licensing all of the new DC Entertainment series being broadcast on The CW. WarnerMedia is paying $85 million per year for five years for the rights to Friends alone, so it’s likely the back catalog of content adds up. Even though WarnerMedia is licensing that content from its own studio, the cost is real.” data-reactid=”34″>On top of that, it bought the exclusive rights to Friends, The Fresh Prince of Bel-Air, and Pretty Little Liars. It’s also licensing all of the new DC Entertainment series being broadcast on The CW. WarnerMedia is paying $85 million per year for five years for the rights to Friends alone, so it’s likely the back catalog of content adds up. Even though WarnerMedia is licensing that content from its own studio, the cost is real.

Finally, WarnerMedia is producing its own slate of originals for the new service. While there’s no indication of what kind of budget it has, the lineup of shows will feature several high profile names, including Reese Witherspoon, Anna Kendrick, Paul Feig, and Kaley Cuoco. 

Combined with HBO’s existing content budget, WarnerMedia is spending several billion dollars per year on content for HBO Max.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="It launches next spring” data-reactid=”37″>It launches next spring

HBO Max’s commercial launch is set for sometime in the spring of 2020. Management initially planned to launch by the end of 2019, but now it only plans a beta release by then. As such, Disney will get a bit of a head start over WarnerMedia when it launches Disney+ in November. That could give it an edge as legacy media companies battle for a place in consumers’ app launchers next to Netflix.

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