The telco in April launched a free-HBO offer to subscribers on the AT&T Unlimited Plus wireless plan, its most expensive tier. Now it will include HBO for current and new customers on its speed-limited AT&T Unlimited Choice plan starting Friday, Sept. 15. Also, Unlimited Choice customers will be able to add DirecTV Now’s “Live a Little” package with about 60 live TV channels, including local stations, for an additional $10 per month.
In addition, AT&T later this year will begin testing out a wireless-to-the-home skinny pay-TV bundle, based on DirecTV Now, with plans to launch it broadly in 2018, chairman and CEO Randall Stephenson said Tuesday at Goldman Sachs’ Communacopia Conference.
“This is how we move downmarket, to move into the less-affluent end of the market,” Stephenson said.
AT&T is moving to use HBO as a bigger carrot to attract and retain wireless subs even as the telco is in the process of closing its acquisition of Time Warner, HBO’s parent, which is still pending review by the U.S. Department of Justice. AT&T expects regulatory clearances for the Time Warner deal by the end of 2017.
While AT&T is looking to leverage HBO to bolster the wireless biz, Stephenson made a point of saying that the telco wants to continue selling the premium cable service broadly and has “broad distribution” across pay-TV distributors.
AT&T’s expansion of the free-HBO offer also comes after T-Mobile announced a deal include Netflix — for no extra charge — to customers on unlimited-usage family plans, starting Sept. 12.
With AT&T Unlimited Choice, customers can get unlimited data, talk, text and HBO included for $60 per month; with four lines, the service is priced at less than $40 per line monthly. However, speeds are capped at a maximum of 3 megabits per second and video is limited to standard-definition quality (about 480p) over the carrier’s LTE network.
Under the current HBO offer, AT&T Unlimited Plus and Unlimited Choice customers will get a $25 monthly video credit toward HBO on applicable AT&T video services. Unlimited Plus customers can use the credit toward DirecTV, DirecTV Now or U-verse TV, while AT&T’s Unlimited Choice customers can apply it to DirecTV Now service.
“HBO is included in these plans whether you have one line or even 10 lines, and the price stays the same,” Vince Torres, senior VP of AT&T Entertainment Group, wrote in a blog post announcing the new offer.
AT&T’s biggest opportunity with Time Warner, in Stephenson’s view, continues to be boosting advertising yields — primarily on the Turner networks — by letting the media side of the house tap into “an incredibly rich trove” of video-usage data from AT&T and DirecTV. The telco has hired Brian Lesser, former CEO of GroupM North America, to lead a new advertising and analytics unit charged with exploiting those kinds of opportunities.
“We’re sitting in a place where the deal logic is more compelling today than it was when we came out and announced the deal,” Stephenson said at the Communacopia conference. “We’re getting really excited about the advertising opportunity.”
Stephenson also reiterated that Time Warner will operate as a separate subsidiary, which will be headed by John Stankey (who currently heads AT&T’s entertainment group). “I know very little about running a media company,” Stephenson said.