AT&T is reportedly targeting a price between $16 and $17 for its new WarnerMedia streaming service, but will bulk it out with a vast amount of content and may in future offer a premium option that includes sports.
The information on this comes from a new report out of the Wall Street Journal which credits "people familiar with the matter" for the details.
This is a fairly narrow pricing widow considering it is not confirmed which likely means that if it is correct users can expect to pay either $16 or 17 for access to the upcoming service.
Considering this is a direct-to-consumer option representing the content from just one company, the price suggested is fairly high. However, AT&T has already made it clear that it is taking a 'more of everything' approach with this service and intends to make sure consumers see the value that's on offer with a higher-priced subscription.
On that note, the same unnamed sources said AT&T plans to bulk out the service with not only HBO, but also Cinemax.
For reference, HBO on its own already costs $14.99 per month and those who also subscribe to Cinemax as an add-on to their existing TV package are likely paying around $9.99 per month. Therefore, just those two subscriptions alone are probably costing subscribers around $25 today.
If the details are correct, AT&T will offer the same access to both services for almost $10 less. This is in addition to also providing access to the rest of the content AT&T picked up during its Time Warner acquisition.
All of this content would make the WarnerMedia streaming service a very simple proposition for consumers – you pay more compared to other services, but you get more and for significantly less than what you would pay if you were to pay for the same services separately.
One of the real issues AT&T is facing with this all-in pricing structure, however, is the existing HBO contracts.
A number of HBO subscribers do subscribe to the service through third-party distributors and it seems unlikely they will be able to offer the same product in the same way if AT&T does launch its direct-to-consumer solution with so much added value for just a few dollars more.
The same sources in this latest report state AT&T is planning to enter some complex talks with those partner distributors over this issue and is toying with the idea of either offering them a way to sell the new service and generate affiliate revenue through those sales, or offer HBO at a cheaper price to begin with – a price which would make it more comparable to its price based on the $16/17 package value.
Other than these points, the report reiterates the service is due to launch in the third quarter of this year. This will be a beta launch at first as the service is not expected to enter a fully consumer ready state until the end of the first quarter in 2020.
Likewise, AT&T and WarnerMedia are also expected to launch an ad-supported version of the service next year which would drive the cost down even further for those looking for a cheaper entry price.