AT&T CEO Randall Stephenson said the company was planning to provide details of its upcoming streaming service to investors at a WarnerMedia Day in September or October.
Speaking on the company’s first-quarter earnings call with analysts, Stephenson reiterated that the SVOD service would be centered on HBO, significantly enhanced by the Warner Bros. library.
AT&T has described the service as having three tiers. The cheapest tier will offer movies , the second tier will feature original content and blockbuster movies. The third tier will add library content from Warner Bros.
Stephenson said he was getting more excited about the service as it gets closer to launch. “We’re making significant investments here and we think our customers are going to love this product," he said.
Earlier this month, the Walt Disney Co. hosted an investor day to provide details of its upcoming Disney+ services. After describing the programming that will be on the service, and its lower than expected price point--as well as higher than expected losses-- Disney’s stock rose.
Some analysts said the streaming space is getting crowded and that by setting the price bar at $6.99 a month, it would put pressure on other companies to keep their monthly fees low.
In response to a question about how the Disney announcement would affect WarnerMedia’s streaming plans, Stephenson said he was “impressed” by what Disney did.
“I think what it did was give the market an appreciation that this is a viable direct to consumer product that will have good appeal for a broad number of customers, not just in the U.S.. but around the world,” he said. “And so I thought it was very instructive from that standpoint.”
He said the WarnerMedia product will also have access to a broad and deep collection of original and library content.
“We’re very very optimistic and the Disney announcement gave us nothing but more optimism in terms of what we think we’ll be able to bring to market,” Stephenson said.
Stephenson said pricing and other aspects of the streaming service would be disclosed at the WarnerMedia meeting in the fall.
The AT&T CEO was also asked about AT&T’s new distribution deal with Viacom, which reduced costs at AT&T’s entertainment group by $40 million in the quarter.
The company had talked about looking to “bend the cost curve” as it content deals expired, and Stephenson noted that the agreements generally include nondisclosure clauses.
“But what I would tell you is the content deals that we have negotiated over the last few months have all been curve benders and we feel good about where we’re coming in. And I think the margins on entertainment group are reflecting that.,” he said.
AT&T CFO John Stephens confirmed reports that Viacom would be working with AT&T Xandr advanced advertising unit as part of the new pact.
He said working with Xandr could help programming providers generate more revenue without costing the distributor more in fees.
“We're really excited about Viacom working with Xandr,” Stephens said. There’s solutions that can be mutually beneficial to all three of the parties, the distributor the content providers and the advertisers.”
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