WarnerMedia is approaching its Netflix competitor like it’s selling data plans

By Nicole LaPorte

WarnerMedia finally gave the world a timeline for its upcoming entertainment streaming service featuring content from its vast offerings.

Rather, all three services.

During an analyst day presentation on Thursday, AT&T CEO Randall Stephenson said that in the fourth quarter of 2019 AT&T will roll out (in beta form) three different tiers of streaming options. 

The breakdown of the three services is as follows:

1. An entry-level option with some movies.

2. A premium service with original programming and blockbuster movies.

3. A top-tier offering with all of the content from the first two services, along with library content from WarnerMedia, and eventually more content licensed from third parties.

 

He didn’t offer any additional details. Baby steps!

We still have no idea how much any of this will cost, or how content from, say, HBO will appear and on which tiers. HBO, after all, runs the only pre-existing WarnerMedia streaming platforms, HBO Now and HBO Go, that have millions of users and are generally well liked. Will HBO be able to premier its own stuff first before it lands on one of the WarnerMedia apps, or the other way around? Who knows? There’s still about a year to figure that stuff out, but then again, recall that AT&T had more than a year to think through these kind of important details while it waited for regulatory approval for its Time Warner acquisition, which it finally received last June.   

One thing is rather clear: This three-tiered strategy is one that only a wireless executive could love. Hard not to see this and think about how AT&T approaches its options for a data plan, with varying price points and levels. AT&T wants to give consumers the same abundance of choice when it comes to their entertainment.  

The announcement was the first glimpse WarnerMedia has given of how it plans to optimize its newly combined company for the post-cable world of television. At the conference, Stephenson said, “You must develop a direct relationship with your viewers. And if you’re a communications company, you can no longer rely exclusively on oversized bundles of content.” 

WarnerMedia’s plans come as the entertainment industry as a whole is reorienting itself toward streaming, thanks to pressure from behemoths like Netflix and Amazon. Disney is currently prepping its own entertainment app that will debut in late 2019 and it is also doubling down on programming at Hulu, in which Disney will soon be the majority stakeholder.

Even Fox News has gotten into the game with its new digital offering, Fox Nation, which launched earlier this week. 

The question is, with so much competition, is giving consumers even more optionality the best route? In a world where viewers can barely decide between Hulu and Netflix and will realistically only sign up for three to four different apps, shouldn’t WarnerMedia be making its foray into streaming a simpler process? Along the lines of: You want movies and TV shows from HBO and Warner Bros? Click here.  

According to Stephenson, the idea is to lure people in slowly with the simpler (and cheaper) options, and then ultimately win them over so that they sign up for the top-tier offering. “We want the customer to want all three tiers, and work their way in at an affordable price point,” he said. 

While the logic there makes sense, AT&T would do well to make its next streaming announcement about something that might excite those consumers it wants to have a direct relationship with.

 

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