HBO Max, AT&T’s foray into a crowded and competitive streaming television market, will come onto the scene in May 2020, and the service will cost $14.99 a month—the same price HBO subscribers are currently paying for that service.
The news, which was announced Tuesday at a WarnerMedia investor day in Burbank, Calif., means the streaming service will cost the same as a subscription to HBO’s existing cable service. And the May premiere date will leave HBO Max having to play catchup not just with Disney+, which is expected to be a formidable rival when it premieres Nov. 12, but also with NBCUniversal’s rival streaming service Peacock, which is slated to debut in April.
HBO Max’s price point will likely aid in AT&T’s task of building scale for its upcoming streaming service in an increasingly crowded streaming television space. Existing HBO subscribers, which in the U.S. number around 34 million, will be encouraged to make the switch to the new service, and the 10 million HBO subscribers who are AT&T cable customers will be able to make the switch for free, said Tony Goncalves, the CEO of Otter Media who has been heading up the development of the direct-to-consumer product.
Customers who buy HBO through other cable providers may not be able to make the switch as seamlessly, as AT&T is still in discussions with other providers to allow for HBO Max access. However, the company expects other cable and satellite providers to agree to give their current HBO subscribers access to HBO Max. After all, “distributors would like to keep customers engaged on their platforms and not others,” WarnerMedia CEO John Stankey said.
The hope is to scale up HBO Max’s audience as fast as possible, which AT&T will do by converting existing HBO subscribers into Max customers. To entice new subscribers, AT&T customers will be offered bundles that include HBO Max for no additional charge, Goncalves said.
In the U.S., AT&T is aiming to have 36 million HBO Max subscribers, including HBO’s existing subscriber base. It estimates it will add an additional 2 million subscribers in 2021, when it rolls out an ad-supported offering. The company hopes to increase that rate of growth by 3 million a year in subsequent years. By 2025, AT&T anticipates HBO Max will have 50 million U.S. subscribers, Stankey said.
Internationally, HBO Max is targeting expansion into Latin American and European markets where HBO already has a foothold. By 2025, Stankey said, the company aims to have between 75 million and 90 million HBO Max subscribers around the world.
The company will not do away with HBO’s existing direct-to-consumer streaming offering, HBO Now, or its streaming service for HBO cable customers, HBO Go, but it will encourage those audiences to migrate to the HBO Max app, Goncalves said.
While HBO Max isn’t in the $17 range that had previously been speculated, it is still slightly higher than Netflix’s standard $12.99 streaming package and Hulu’s $11.99 ad-free option as well as newer entrants in the streaming space like Disney+ and Apple TV+, which will cost $6.99 a month and $4.99 a month, respectively.
Details around the streaming service have been highly anticipated even before AT&T CEO Randall Stephenson on Monday positioned the service as the cornerstone of the company’s “streamlined and simplified” streaming video product offering. AT&T, which last year acquired Time Warner (which has now been renamed WarnerMedia) for $85 billion, is under pressure from shareholders and an activist investor group to prove the value of the acquisition, and the company rolled out a three-year plan Monday that heavily featured the anticipated growth of HBO Max once it comes onto the scene.
The service aims to attract younger viewers and more women to WarnerMedia’s portfolio of media brands across cable and streaming, Stankey said.
News about HBO Max has been slowly ratcheting up since July when WarnerMedia revealed the service’s name and its initial content lineup. The service has scooped up exclusive streaming rights to the sitcom Friends, which will exit Netflix at year’s end, and the rights to other major franchises like The Big Bang Theory.
HBO Max has also secured the streaming rights to the animated comedy South Park, a major acquisition for the company, said Kevin Reilly, HBO Max’s chief content officer and president of TBS, TNT and truTV. All 23 seasons will be available on the service beginning in June 2020. The Comedy Central series currently streams exclusively on Hulu.
Also in adult animation, prior seasons of the Adult Swim comedy Rick and Morty will be also available on the service at launch, said Michael Quigley, evp, content acquisitions and strategy.
In HBO Max’s first year, the company will roll out 50 originals, said Sarah Aubrey, HBO Max’s head of original programming. Upcoming HBO Max originals include comedies from Issa Rae and Mindy Kaling as well as two shows from the DC Universe executive produced by Greg Berlanti: anthology series Strange Adventures and a series inspired by Green Lantern. HBO Max has also tapped filmmaker Ridley Scott to create the serialized science fiction series Raised by Wolves.
HBO Max, which will debut with 10,000 hours of content, will eventually serve as a central hub for other offerings. An ad-supported version of HBO Max is planned to roll out sometime in 2021, Stankey said, and AT&T will eventually offer a live-television subscription through the platform.
During investor day, Andy Forssell, WarnerMedia entertainment’s evp and general manager, highlighted the interface for the service, which will include both human-generated recommendations and algorithmic-generated suggestions and an option in which users can indicate that they are co-viewing, something that is likely to be appealing to advertisers looking to target the right audiences on the service once HBO Max rolls out its ad-supported streaming option.
AT&T wants HBO Max to serve as the central tenet of its push into streaming. The company plans to bundle HBO Max with AT&T TV Live, a live television offering, and eventually plans to offer live, interactive special events for subscribers to further entice people to use AT&T services.
Many of those ambitions hinge on the power of the HBO brand, which is known for hit programming like Game of Thrones, The Sopranos and Succession.
“Everything starts with HBO,” said chairman of WarnerMedia entertainment and direct-to-consumer Bob Greenblatt. “It will help us go into this market with a head start.”