×
You will be redirected back to your article in seconds

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

  • Kirk Kerkorian

    Kirk Kerkorian's Estate Settles With Widow for $12.5 Million

    The estate of late media mogul Kirk Kerkorian has a reached a settlement with his widow, who claimed she was entitled to a third of his $1.8 billion fortune. Una Davis will receive just $12.5 million under the deal, which is set for court approval on Wednesday. Davis married the mogul in March 2014, becoming [...]

  • Meg Whitman and Jeffrey Katzenberg Strictly

    Variety's Innovate Summit 2018: What We Learned

    New insights into how data collection plays a role in the tech and entertainment spheres were revealed at Variety’s annual Innovate summit held in Los Angeles on Wednesday. Meg Whitman and Jeffrey Katzenberg discussed the exciting future of television designed for mobile phone viewing with their new streaming platform, “Quibi,” an executive from “The Ellen Show” discussed the [...]

  • Capitol Music Group Names Amber Grimes

    Capitol Music Group Names Amber Grimes Senior VP of Global Creative

    Amber Grimes has been named to the newly-created position of Senior Vice President of Global Creative for Capitol Music Group, it was announced today by Chairman & CEO Steve Barnett, to whom Grimes will report. According to the announcement, in her new position, Grimes will be integrally involved in formulating and executing the company’s global [...]

  • Kevin Hart

    Why Kevin Hart's Mea Culpa Was Too Little, Too Late (Opinion)

    Forgive me if this sounds trite or preachy, but the importance of owning up to our mistakes cannot be overstated. Denials, silence, cover-ups, repudiation — all are unacceptable. Media outlets around the globe, including ours, wrote about how Kevin Hart initially took no responsibility for having posted disgusting homophobic tweets years ago that resurfaced when [...]

  • Annie Lennox, Chrissie Hynde, Industry Execs

    Annie Lennox, Chrissie Hynde, Industry Execs Sign Anti-Brexit Letter

    Annie Lennox, Chrissie Hynde, Pink Floyd’s Nick Mason, Paloma Faith, Ed Sheeran manager Stuart Camp and Grammy/Emmy award-winning film composer David Arnold and several leading UK music industry bodies are among the signees of a letter drafted by the new organization Music4EU, stating that Brexit “represents a significant threat to the UK’s music industry” and [...]

  • Kevin Hart Oscars Gay Tweet Controversy

    What Public Figures Should Learn From the Kevin Hart Oscars Debacle (Guest Column)

    When social media erupted over Kevin Hart’s anti-gay tweets from years ago, many in the media and the entertainment industry believed he would immediately apologize, LGBTQ people would critique but ultimately accept his mea culpa, and the comedian would go on to host the Academy Awards. If offenders make a commitment to do better, their [...]

More From Our Brands

Access exclusive content