WarnerMedia has yet to launch its new streaming service, but it seems those who wield the power behind the scenes expect big things.
The service, which has yet to even be given an official name, at least publicly, has set its sights on obtaining seventy million subscribers. That's according to a new CNBC report which credits WarnerMedia's CEO, John Stankey, for the number.
By any measure, that's a large number and one the service will have to work hard at securing.
One of the reasons suggested as why the number is achievable is HBO. This is already a highly subscribed-to service and transitioning those customers over to the new WarnerMedia service will instantly give it a day-one subscriber boost like no other.
However, WarnerMedia is not expected to force subscribers over to the new service and instead will seemingly (highly) encourage existing HBO customers to make the move themselves by overloading the service with content. For example, recent reports have stated the service will only cost a few dollars more than HBO currently does, but in return will also offer access to Cinemax and Warner Bros. content.
A move which WarnerMedia believes will offer so much content that consumers (and presumably HBO subscribers in particular) will find it hard to resist.
The mass switching might not be that simple, however. As recent reports suggest that WarnerMedia will need to offer a meaningful difference between the two service's prices. One suggestion for this is WarnerMedia might lower the cost of HBO so that the newer price is more reflective of its contribution to the bundled price.
If that is the case, then WarnerMedia might see quite a few HBO customers happy to stay just subscribed to HBO and especially as then it will be cheaper, not more expensive like the new WarnerMedia service.
Then there's the issue of the competition. By all accounts, the WarnerMedia service is already arriving to market at a point when consumers have plenty of subscriptions to choose from and money already tied up in those services.
Likewise, the WarnerMedia service is not the only big-name service that's due to arrive in the coming months as Disney is also readying its Disney+ service which already appears to be in high demand.
Adding to the issue for WarnerMedia, and a result of the lengthy approval process for the Time Warner purchase, the new WarnerMedia service is not expected to be fully market ready until the end of the first quarter of 2019. That's a few months after Disney launches its fully-loaded direct-to-consumer solution.
While Disney won't be offering quite as much content as the upcoming WarnerMedia service, it has already been confirmed Disney+ will only cost $6.99 per month.
Herein is probably WarnerMedia's main concern and likely why the company is skirting the price issue in interviews. WarnerMedia can either maintain a high price for HBO in a bid to move over enough customers to the WarnerMedia service and risk the all-in approach backfiring due to the high price being too much for non-HBO customers, or lower the HBO cost to a point where it becomes a far more price competitive service compared to Disney, Netflix, Hulu and so on.
The risk there is giving those existing HBO subscribers too much incentive to stay with the service. That would not be good news for WarnerMedia and certainly won't help it on the road to seventy million subscribers.
As part of the same report, further reiteration was given that an ad-supported version of the service would arrive after the initial launch of the service, and there was even the suggestion (albeit not based on comments by Stankey) that AT&T may look to merge the DIRECTV NOW and WarnerMedia streaming services further down the line.