By Matt Winkelmeyer/Getty Images.
Ever since AT&T closed its $85 billion acquisition of Time Warner on June 14, there’s been intense curiosity surrounding the telecom titan’s intentions for the crown jewel of its newly acquired bounty: HBO. On Wednesday, John Stankey, C.E.O. of AT&T’s four-month-old WarnerMedia division, pulled back the curtain a bit further during a discussion at Vanity Fair’s New Establishment Summit in Los Angeles, where he revealed that AT&T is girding for battle in the streaming wars with a direct-to-consumer streaming service that will launch in the fourth quarter of 2019.
Interviewed by New York Times columnist Andrew Ross Sorkin onstage at the Wallis Annenberg Center for the Performing Arts, Stankey said the service will be “anchored by HBO as a lead brand,” and that “around HBO will come a great library of additional content from WarnerMedia,” which owns channels such as TBS, TNT, and Cartoon Network, in addition to the Warner Bros. film library. “Select content” from third-party partners will round out the service, he said, declining to say how much a subscription will cost. The product will put AT&T squarely in competition with a growing array of streaming packages that consumers are flocking to, from Netflix and Hulu to the so-called “Disneyflix” that is expected to hit the market after Disney completes its acquisition of 21st Century Fox.
AT&T’s bet is that HBO, which has been the vanguard of TV’s golden age, will be a significant enticement for viewers who don’t have access to the channel through a traditional cable bundle that includes HBO as a premium add-on. But Stankey also made it clear that in the current era of mega-scale, HBO on its own isn’t enough. “I think HBO is a really important brand, a really important property for us, and a very unique product in terms of how we win the spirits and minds of customers, and we’re gonna continue to invest in that,” he said. “I think you’re going to see a stronger HBO as this product goes forward. However, I don’t think HBO singularly, as its own standalone brand, will meet the needs of the scale of audience and customers that we ultimately want to address.” Stankey said HBO will continue to be offered separately from the planned streaming service, but he didn’t take the bait when Sorkin pressed him on how much AT&T planned to increase HBO’s $2.5 billion programming budget relative to the much larger sum Netflix is doling out for original shows. “My job isn’t to build another Netflix,” he said, “our job is to build a compelling offer of content.”
Stankey’s announcement was the second big streaming reveal of the morning. Earlier, Jeffrey Katzenberg and Meg Whitman disclosed the name of the billion-dollar short-form-video venture that they’ve been cooking up, heretofore referred to as New TV. It’s going to be called Quibi, which is a portmanteau of “quick” and “bite.” As Katzenberg explained, “You get up every morning, you leave your house and you take with you a television set. You’re communicating, you’re collaborating, and you’re actually watching 70 minutes of short-form content. . . . We are this new form of quick bites.”
Credit:Vanity Fair
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