A new Wall Street Journal report citing anonymous sources said the AT&T-owned media company will launch its upcoming subscription service, titled HBO Max, at a price point of $16-$17 per month. The platform will bundle HBO and Cinemax and also include a library of Warner Bros. films and shows.
The subscription service, slated for a beta launch in the fall, is expected to launch in full in Q1 2020.
An HBO subscription currently costs $15 per month, so the extra dollar or two for AT&T’s upcoming service would essentially be going towards Cinemax and accessing other Warner Bros. content. That said, it remains unclear what franchises from WarnerMedia’s expansive back catalogue would be available on the service. Once current distribution contracts are disentangled, the media giant has no shortage of properties that could entice potential customers, such as DC Comics-based films like “Wonder Woman”, “Aquaman” or “The Lego Movie” franchise.
One original project that will be coming to the new platform is “Tokyo Vice,” a recently announced drama starring Ansel Elgort (“Baby Driver”). The 10-episode series is based on the book by Jake Adelstein and will follow a journalist’s daily descent into Tokyo’s underbelly.
A new series set in the legendary sci-fi “Dune” universe will also be coming to the platform. The show, titled “Dune: The Sisterhood,” will focus on a mysterious order of women known as the Bene Gesserit, according to a Variety report. Denis Villeneuve, who is also directing the “Dune” film reboot that will release next year, will direct the show’s pilot episode.
HBO is already one of the most expensive streaming services on the market — Hulu and Netflix offer $12 and $13 per month plans, respectively — and Disney is expected to further shake up the business when the company’s $7 per month Disney+ platform launches in November. The pricing of Apple’s service, also expected this year, has not been announced.
The sudden influx of options will definitely impact consumer behavior. According to the 13th edition of Deloitte’s digital media trends survey, consumers currently subscribe to an average of three paid streaming video services, and ascribe value to those offerings based on ease of use. Content exclusivity is another major factor – as is ad-free viewing and access to live TV. How much is too much for the average consumer to spend is still to be determined, but with WarnerMedia’s apparent price strategy a potential $50 per month streaming bill for three services is not out of the question.
Amid the concerns about consumer preferences, AT&T will also need to ensure that its streaming platform does not conflict with the company’s interests in DirecTV, its satellite television service. Though that service has been on the decline, AT&T CEO Randall Stephenson told investors during the company’s Q1 2019 earnings call that the company planned to commit to the service beyond 2019, despite anticipating some customer losses in the second quarter of the year.
Previous plans for AT&T’s upcoming service suggested three tiers of pricing. The entry-level tier would be focused on movies, while the second tier would add original programming. The third tier would include the content from the first two tiers and a library of other WarnerMedia releases.
Those plans appear to be scrapped, according to the Wall Street Journal report. Regardless, the Journal article says the company is still considering a cheaper, ad-supported version of the service that could debut later in 2020.