Stephenson: HBO Max is Not Netflix

With the full launch of its standalone streaming service HBO Max set for next year and an activist shareholder breathing down his neck, AT&T chairman and CEO Randall Stephenson tried to calm an industry audience Tuesday, adding that HBO Max would stand out among the growing list of streaming video competitors while recent criticism from investor Elliott Management is being addressed.

Randall Stephenson

Randall Stephenson

"This is going to be different,” Stephenson said of HBO Max at the Goldman Sachs Communacopia conference in New York Tuesday. “This is not Netflix. This is not Disney [Plus]. This is not Hulu. This is different, standing up a digital platform and driving fast penetration through customer relationships that you own in this distribution business.” Stephenson has said in the past that the service -- along with its sister streaming offering AT&T TV, which is scheduled to debut around the same time -- will leverage the 170 million customer relationships AT&T has through its various wireless and pay TV businesses.

Related: HBO Christens New SVOD Service HBO Max 

HBO Max, which will be unveiled at an investor meeting on Oct. 29 but will be launched in 2020, has come under fire because of what many analysts believe will be its pricing. Although AT&T hasn’t officially announced what the service will cost, most observers believe it will be between $15.99 and $17.99 per month, in the same ballpark as its standalone HBO Now streaming service. At that price point, HBO Max could be at a disadvantage coming out of the box, especially since its rivals Netflix ($12.99/month), Hulu ($8.99/month), Disney + ($6.99/month) and Apple TV Plus ($4.99/month) will be priced so much lower.

John Stephens

John Stephens

AT&T is not unaware of the controversy. Last week, AT&T chief financial officer John Stephens said that the HBO service itself is the main differentiator between HBO Max and its competition.

“Well, I think the first thing I want you to remember is that we also start with something called HBO,” Stephens said at the Bank of America Merrill Lynch Media, Communications & Entertainment conference in Los Angeles. “And so we only have a 40-year head start with a quality product that is a premium.”

WarnerMedia has been beefing up the content on HBO Max, adding seasons of popular broadcast shows like “Friends,” British TV series “Doctor Who” and “The Big Bang Theory” for the service. 

Stephenson also addressed the criticism of Elliott Management, which wrote a letter to AT&T’s board of directors Sept. 9,  calling for the sale of DirecTV and criticizing the purchase of Time Warner and Stephenson’s voracious appetite for acquisitions.

Stephenson said the Elliott management letter was a “mixed bag,” with some suggestions that are being addressed and others that don’t appear to make much sense for the telco. But he was open to starting a dialog with Elliott, calling the firm “smart guys” who have good ideas that AT&T needs to “sit down and engage with them on.”

Stephenson admitted that the diversity path he has taken the telco down -- beginning with the purchase of DirecTV in 2015 and the Time Warner deal last year -- couldn’t have been imagined five years ago, what he called the “old world.”

“In the new world, it makes all the sense in the world,” he said. “Content is king, I’m an evangelical on that. “But distribution matters.”

The AT&T chief also addressed pay TV subscriber losses --Stephens said last week that AT&T could lose between 300,000 and 350,000 pay TV customers in Q3 as a result of carriage disputes with CBS and Nexstar Media Group earlier this year. There are still retransmission consent and carriage deals yet to be finalized -- 17 smaller TV stations that went dark on May 30 are still unavailable to AT&T pay TV customers, as is regional sports network Altitude Sports and Entertainment, which went dark on Aug. 31.

Disney began warning DirecTV customers that they could lose access to ESPN, ABC stations, Freeform and The Disney Channel in the absence of a deal last week, but apparently has given AT&T an extension to its deal as talks continue. 

Stephenson said AT&T has had to make some hard, but necessary choices regarding programming renewals.

“Those were a painful few weeks,” Stephenson said of the CBS and Nexstar blackouts. “... but it was the right thing to do."

AT&T Entertainment Group CEO John Stankey during the Tuesday general session at INTX. (Photo by

AT&T Entertainment Group CEO John Stankey during the Tuesday general session at INTX. (Photo by

AT&T’s recent promotion of WarnerMedia CEO John Stankey to chief operating officer of the parent company has set in motion speculation that he will assume the top spot at the telco once Stephenson retires. 

At the Goldman conference, Stephenson said he hasn’t been informed by the board of his retirement yet, but added that Stankey has done a good job, adding that he would be in a "good position" if he “executes this play.”