AT&T Oct. 10 disclosed it plans to launch another over-the-top video service in the fourth quarter of 2019.
The telecom, which acquired Time Warner (HBO, Warner Bros., Turner) in part to deliver content via direct-to-consumer video strategy, operates online TV service DirecTV Now and plans to bow AT&T Watch, a $15 monthly sports-free online TV service.
“This is another benefit of the AT&T/Time Warner merger, and we are committed to launching a compelling and competitive product that will serve as a complement to our existing businesses and help us to expand our reach by offering a new choice for entertainment with the WarnerMedia collection of films, television series, libraries, documentaries,” CFO John Stephens wrote in a regulatory filing.
Stephens said the OTT video service and WarnerMedia content would create “a compelling product” for pay-TV distributors looking to increase consumer penetration of their bundled channel packages.
“It would help us successfully reach more customers,” Stephens wrote.
The executive said he expects financial support for the OTT video service to come from a combination of incremental efficiencies within the WarnerMedia operations, consolidating resources from sub-scale direct-to-consumer efforts, library content, and technology re-use.
“We expect to defer some licensing revenue to later periods in the form of increased customer subscription revenue,” he wrote.