×

WarnerMedia Streaming Platform to Launch With Three Tiers of Service, Emphasis on Movies

WarnerMedia’s nascent streaming service will launch in beta form by the end of 2019 with three tiers of programming options, including an “entry-level” package focused on movies.

AT&T unveiled plans for the unnamed service on Thursday during a presentation in New York to investors to talk up the company’s prospects and plans for paying down the considerable debt that AT&T piled on with its $84.5 billion acquisition of Time Warner. AT&T chairman-CEO emphasized that the company is laser-focused on chopping down its debt load to no more than 2.5 times earnings by the end of 2019.

AT&T said WarnerMedia’s SVOD service will offer consumers three options to subscribe, starting with “entry-level movie-focused package.” It will also feature “a premium service with original programming and blockbuster movies” and a third option “that bundles content from the first two plus an extensive library of WarnerMedia and licensed content.”

John Stankey, WarnerMedia CEO, said the company’s goal was to offer programming with appeal to a wider audience than is typically targeted by WarnerMedia’s HBO, Turner and Warner Bros. units.

“We want to broaden the relevant demographic base,” Stankey told investors. “Our goal now is to open the aperture. We want to pick up more content and get more engagement on digital content.”

The Wall Street analysts in the room pressed Stankey on the fundamental dilemma facing the media giants that are aiming to move into the direct-to-consumer arena — the content licensing revenue that will be lost if the company no longer sells its movies and TV shows to outside buyers in favor of keeping it exclusive to its proprietary streaming platform. Stankey was clear that WarnerMedia will continue to sell programming in international markets for the near term as well as selectively on the domestic front.

“We’re not going to take all of our content and hold it for ourselves,” he said.

At the same time, Stankey hinted that the prevailing trends in the industry will make it harder for Netflix and other companies that don’t have a vast content library at their disposal to keep their services flush with premium programming. WarnerMedia, Disney and others are increasingly focused on building their own direct-to-consumer platforms rather than cashing checks from Netflix, Amazon et al for mammoth licensing deals

“Some incumbents in that space should expect their libraries are going to get a lot thinner,” Stankey said. “Think about what happens in the next 18 to 24 months. We’re going to see a pretty substantial structural shift that is going to occur.

On Monday, WarnerMedia named Brian Bentley, formerly head of marketing for DirecTV and AT&T Entertainment Group, as general manager and exec VP of direct-to-consumer development to oversee the streaming service. There’s much speculation in the industry about who WarnerMedia might tap to oversee programming for the venture, which is expected to also license content from outside providers.

AT&T chairman-CEO Randall Stephenson emphasized that the company is laser-focused on chopping down its debt load to no more than 2.5 times earnings by the end of 2019. The debt as it stands now, at $170 billion, is about 2.8 times earnings.

AT&T is looking at asset sales to speed up the debt reduction process, and one of the non-core items on the table is the 10% stake in Hulu that AT&T inherited from Time Warner. Disney is about to acquire a majority interest in Hulu through its acquisition of 21st Century Fox, which means Disney is the likely buyer for AT&T’s interest. (Hulu at present is a joint venture of Disney, Fox, Comcast and AT&T.)

“We are focused on one thing in 2019 and that’s getting to 2.5,” Stephenson told the crowd.

More Biz

  • Bert Salke and Jennifer Salke

    Feds Looked Into Amazon Studios Chief Jennifer Salke in College Admissions Scandal

    Federal investigators looked into Amazon Studios chief Jennifer Salke and her husband, Fox 21 Television Studios president Bert Salke, as they conducted a sprawling probe of cheating in elite college admissions, a source close to the case told Variety. It does not appear, however, that prosecutors will charge the Salkes in the case. The Salkes [...]

  • Variety Cord Cutting Placeholder Cable

    Big Blackout Looms as CBS, AT&T Go Down to Wire on Renewal Talks

    A blackout affecting CBS stations in major markets throughout the country looms as CBS and AT&T executives go down to the wire on negotiations for a retransmission consent deal covering 28 O&O stations. The sides have sparred publicly during the past few days as 11 p.m. PT Friday expiration of the previous contract approached. AT&T [...]

  • Contract Placeholder Business WGA ATA Agent

    ICM Responds to WGA Packaging Lawsuit: Claims are 'Baseless' and 'Absurd'

    ICM Partners has asked a judge to dismiss the lawsuit filed against four major talent agencies by the Writers Guild of America as part of the larger war between agencies and the guild over packaging fees on TV series and movies. The guild sued ICM, CAA, WME and UTA in California state court in April, [...]

  • New York City NYC Placeholder

    CityFM Podcast Takes a Deep Look at New York’s Music Scene (Listen)

    First among the many projects listed at the beginning of New York Music Month in June was a WNYE radio show and podcast called CityFM that promised to “explore the city’s music culture, emerging artists and trends, and upcoming events told through the lens of what’s happening around the city in Summer 2019.” And while [...]

  • Live Nation Logo. (PRNewsFoto/Live Nation)

    Live Nation Confirms Placing Tickets Directly on Secondary Market at Artists’ Request

    Representatives for Live Nation, the world’s largest live-entertainment company and owner of Ticketmaster, confirmed that it bypassed conventional channels and directly placed thousands of concert tickets on the secondary market upon artists’ request, in an article published in Billboard. In a statement shared with Variety, the company acknowledged that it has facilitated the transfer of [...]

  • Costume designer Michele Clapton

    Costume Designers Fashion a Plan to Fight for Pay Parity in Upcoming Contract Talks

    The Costume Designers Guild Local 892 is gearing up to fight for pay equity in its 2021 contract negotiations with the Alliance of Motion Picture and Television Producers, establishing a pay-equity committee to raise awareness of the scale disparity between the mostly female CDG membership and the mostly male membership of the Art Directors Guild Local [...]

More From Our Brands

Access exclusive content