HBO Max Is A “Real Bargain” At $15 A Month Given Reach And Content, AT&T CFO Asserts

AT&T CFO John Stephens considers HBO Max, the company’s forthcoming streaming entrant, as a “real bargain” at $15 a month given its broad reach and depth of programming.

The streaming service will launch May 27, joining Disney+, Peacock and Apple TV+ in a burst of billion-dollar efforts to make up ground previously ceded to Netflix.

Customers of HBO, which has been around for decades, “know the quality of the entertainment and the content and for a long time have established a price for it that they’re willing to pay,” Stephens said in an online appearance at the MoffettNathanson Media & Communications Summit.

HBO Max will include the existing HBO offering plus “thousands of more hours and more titles and quite frankly attracts many more demographics,” Stephens said. “So from that perspective, I think it’s something that’s going to be accepted as very high quality and significant content that goes across the whole family unit or multiple individuals, as opposed to just one demographic. As such, I think it’s at the right price point.”

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At $15 a month, HBO Max is at the top end of the streaming scale. WarnerMedia has recently begun offering promotional discounts of $12, undercutting the most popular tier of Netflix’s service.

Stephens said the company will “see how that plays out. We’ll try to do things differently with regard to bundling.” As the company gets customer feedback, “We’ll make adjustments.”

Asked by moderator Craig Moffett about how the company is coping with production shutdowns due to COVID-19, Stephens said “there will be impacts through the year” on the balance sheet. Any production that had to halt this spring can’t be expected to be completed for “some months, if not longer” but the company is hopeful for gradual reopening as 2020 unfolds.

Warner Bros., compared with the other major parts of WarnerMedia, is in a vulnerable position given its theatrical film pipeline, Stephens said. Asked about the studio altering the traditional 90-day theatrical window, he said the company would “continue to work with theater owners.” The company’s release of Scoob, which is skipping theaters and heading to video on demand on Friday, will be a test case. “We’ll learn from that,” Stephens said. “We’re interested in new ideas, whatever’s good for consumers, but we’ll continue to work with our partners.”


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