Changes are afoot for HBO beneath its new company overlords at AT&T. But what these modifications may be are nonetheless anybody’s guess.
After longtime HBO CEO Richard Plepler abruptly resigned last week, AT&T executives went on a media tour to talk about the channel’s future, take shots at Netflix, and trace on the streaming service AT&T plans to launch this 12 months. Still, these interviews didn’t reveal a lot in the way in which of specifics. If something, AT&T and HBO’s streaming plans appear even murkier than they did per week in the past.
Here’s what I’m nonetheless scratching my head over:
Will AT&T launch a streaming service this 12 months?
The timing of AT&T’s direct-to-consumer streaming service, which can mix content material from HBO, Turner , and Warner Bros., appears a bit fluid. Last October, AT&T mentioned it might launch the service in 2019. A month later, the corporate began describing the 2019 launch as a “beta” model, and it noted last month that new unique programming received’t arrive till 2020. Earlier this week, Bob Greenblatt, the brand new head of AT&T’s WarnerMedia unit, instructed Variety that launching the beta in 2019 is “what we hope to do,” suggesting a lingering diploma of uncertainty.
Mind you, this is similar firm that launched its “Next-Generation” model of DirecTV Now a half-year later than initially supposed, that also hasn’t expanded DirecTV Now’s DVR choices (after saying it might accomplish that final summer season), and hasn’t delivered on promised DirecTV Now options equivalent to 4K decision and cell video downloads. The concept that this new streaming service may additionally fall not on time isn’t unthinkable.
Is the three-tier pricing plan set in stone?
While AT&T hasn’t introduced actual pricing for its direct-to-consumer streaming service, executives have described a three-tier system that features motion pictures for a low worth, originals and extra movies (presumably from HBO) for a medium worth, and a bundle of extra movies, comedies, and youngsters programming from Turner’s and Warner’s catalogs for the next worth.
This method is with out precedent within the on-demand streaming world, and it’s harking back to the sort of setup individuals are making an attempt to go away behind with cable. Maybe that’s why Greenblatt hedged a bit when Variety requested him for particulars on these plans. “How it will be tiered and all of that is still in the working stages,” he mentioned. Perhaps he’ll impress upon AT&T that its unique imaginative and prescient isn’t the wisest concept.
Can AT&T get good at making apps in 9 months?
Software has by no means been a powerful swimsuit for both HBO or AT&T. The former’s HBO Now apps are a chore to navigate, they usually nonetheless lack table-stakes streaming service options equivalent to personalised suggestions and consumer profiles. AT&T’s DirecTV Now apps additionally lack profiles and personalization (once more, despite the fact that AT&T put those features on its public roadmap mid-2017), and each a part of its app besides the grid-based channel guide feels clunky.
It’s unclear whether or not AT&T will roll its new service into these current apps or begin from scratch. Either manner, the corporate has loads of work to do in not a lot time.
How a lot content material will AT&T pull from different platforms?
John Stankey, the top of AT&T’s WarnerMedia division, has beforehand advised that Netflix and different rivals will see their catalogs shrink as AT&T pulls licensed motion pictures and TV exhibits again to its personal providers. But whereas these strikes may make AT&T’s service extra compelling, in addition they signify an enormous danger for an organization with $180 billion of debt that’s making an attempt to repay $20 billion of it this 12 months.
The want for short-term revenues may clarify why AT&T took $100 million from Netflix to completely license Friends by 2019. It might additionally clarify why, as Redef’s Matthew Ball points out, AT&T executives have began to waffle on whether or not they’d surrender that sort of simple cash sooner or later. “Part of me would like to have [Friends] unique on the service however I’m unsure that’s the proper reply but,” Greenblatt told The Hollywood Reporter this week. AT&T may be realizing that the rationale Friends is common proper now could be as a result of it has Netflix to lean on, not vice versa. That mentality might definitely lengthen to different motion pictures and exhibits which might be even much less of a draw.
How a lot of a legal responsibility is AT&T’s monetary state of affairs?
The underlying subject with all these questions is AT&T’s aforementioned debt, accrued largely from shopping for DirecTV for $48.5 billion in 2015 and Time Warner for $85 billion earlier this 12 months. AT&T’s instant objective is to give attention to profitability, so it might pay down that debt, which is why CEO Randall Stephenson instructed the Wall Street Journal in January that “2019 candidly is the money year.”
At the identical time, AT&T’s John Stankey just lately instructed The Hollywood Reporter that he needs the corporate’s providers to be in 60- to 70 % of U.S. properties. Growing a streaming service to that stage of adoption would require main investments in content material and aggressive pricing, which suggests AT&T’s progress and profitability objectives are basically at odds.
What does all this imply for you?
To deliver it house for cord-cutters, all these questions quantity to a number of uncertainty over the way you’ll entry HBO and different AT&T content material sooner or later. Will HBO Now exist as a standalone $15-per-month streaming service subsequent 12 months, or will costs change as AT&T rolls that content material into its new service? Will you continue to have the ability to add an HBO subscription to Amazon Prime, or will AT&T pull the channel’s content material again into its personal siloed apps? And if you happen to take pleasure in watching WarnerMedia-owned exhibits like Friends, or motion pictures like The Dark Knight on Netflix, how for much longer will that be an possibility?
Right now, AT&T doesn’t appear to have the solutions.
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