AT&T CEO: WarnerMedia Looking to Partner SVOD Service With Pay-TV Operators

WarnerMedia’s pending fourth-quarter soft-launch of a branded subscription streaming video service will look to partner with — rather than antagonize — third-party pay-TV operators.

Speaking May 14 at the JPMorgan Global Technology, Media and Communications  Conference in New York, Randall Stephenson, CEO of AT&T, said the service would be centered around HBO and be included with a pay-TV subscription.

“The MVPDs, Comcast, we think are going to be an important partner to all of this,” Stephenson said. “If you’re a Comcast subscriber and you acquire HBO, you will get this [OTT video] capability with your HBO subscription on Comcast.”

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The proposed symbiotic relationship between SVOD and linear television distribution is significant considering the former was launched in part to replace pay-TV.

Indeed, Dish Network launched pioneering Sling TV in 2015 in an effort to offset declining satellite TV subscribers. AT&T followed with DirecTV Now.

Yet, online TV subscriber growth has cooled. Sling added just 7,000 subscribers in the most-recent fiscal period, and DirecTV Now lost 83,000 subs compared to a gain of 312,000 subs last year.

Stephenson said the new SVOD service is projected to generate “tens of millions of subs” — a figure dependent upon AT&T sustaining its base of DirecTV and U-verse subscribers.

The strategy is not dissimilar with Comcast, which plans to launch an OTT service free to Xfinity subscribers, with non-subscribers charged a monthly fee.

“Keeping the satellite, the U-verse customer base in check and stable is really important because it’s going to be a major distribution platform [for SVOD],” Stephenson said. “And then we want to just continue to push digital distribution on top of that as well.”

Much of that distribution will be centered around HBO, which is currently generating strong viewership through the last season of “Game of Thrones”.

Stephenson said content investment at HBO has “stepped up considerably” this year with the second seasons of “Big Little Lies” and “Succession” slated to follow “Thrones,” in addition to new series, “Chernobyl”.

“We’ve got a lot of really great content coming online as ‘Game of Thrones’ winds down,” he said.

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