HBO-focused streaming product is about meeting demand

AT&T’s new HBO-focused streaming product isn’t so much about keeping up with competition as it is about meeting customer demand, John Stankey, CEO of AT&T’s WarnerMedia, told CNBC on Wednesday.

“We are responding to what customers want, which is they want to be able to watch their content wherever they are whenever they can,” Stankey said in an interview with CNBC’s Andrew Ross Sorkin.

AT&T will launch a streaming service to rival Netflix next year, the company said Wednesday. The new service, anchored by HBO as lead brand, will host properties such as movies and TV franchises from AT&T’s media and entertainment subsidiary WarnerMedia.

AT&T already offers a handful of streaming services. DirecTV Now is a cable replacement that lets users stream live TV. HBO Go is a streaming version of HBO that requires a cable login. HBO Now is a standalone streaming service for HBO content.

The new service will be a standalone streaming service and host content from HBO as well as other WarnerMedia content, and “select third-party licensed content, as well,” Stankey said.

Stankey did not reveal pricing on the new product but said it will be “more expensive than HBO today,” because customers will have to purchase HBO or another similar product or service in addition to the on-demand product.

Following AT&T’s purchase of Time Warner earlier this year, AT&T — which already owned DirecTV — has been broadening its advertising and media offerings.

“There’s other very capable competitors out there putting great vehicles for consuming content and user-friendly interfaces in a dynamic fashion. And we think when we’ve got these great portfolio distribution capabilities today — from wireless pay TV to what we are able to do with some of our virtual, over-the-top products — this is just one more tool in the toolbox,” Stankey said.

Stankey said it won’t be just a “warehouse” of content but rather a more curated collection that maintains the strength of HBO’s brand.

“One of the things we think is different about our offering that needs to be different moving forward is we don’t want kind of a warehouse approach to it. We want a collection of brands where customers look at it and say, ‘I know exactly what I’m getting when I go to that part of the user interface,'” he said.

“We think brands are really important, and HBO is a classic case of that. It’s a brand that stands for something — people recognize what you are getting when you’re on HBO,” Stankey added.

The service is expected to launch in the fourth quarter of 2019.

— CNBC’s
Sara Salinas
contributed reporting.