WarnerMedia’s “Netflix killer” service to offer three tiers

WarnerMedia owner AT&T has revealed that the company’s upcoming SVOD service will include three separate packages for consumers, during an analyst event held Thursday.

The service will include an entry-level movie-focused package; a premium service with original programming and blockbuster movies; and a third service that bundles content from the first two plus an extensive library of WarnerMedia and licensed content.

AT&T plans to launch the service in beta in Q4, 2019.

The new streamer will “complement WarnerMedia’s existing business; benefit its current distribution partners; expand the audience and increase engagement around its content; and provide data and analytics to inform new products and better monetize content,” according to AT&T.

WarnerMedia CEO, John Stankey said that the streamer will use HBO, Turner and Warner Bros. content to broaden its current demographic base.

“Our goal now is to open the aperture. We want to pick up more content and get more engagement on digital content,” he said.

The presentation signified more than ever that AT&T is serious about coming up top in an increasingly competitive SVOD environment, which will see Disney and Apple launch their own service in 2019.

Stankey hinted that the company will be looking to limit the amount of its own content it places on competitor platforms.

“Some incumbents in that space should expect their libraries are going to get a lot thinner,” Stankey said. “Think about what happens in the next 18 to 24 months. We’re going to see a pretty substantial structural shift that is going to occur.”

The trend is already in full swing this year, with Disney slowly taking back its content from Netflix ahead of its Disney + launch in 2019. News that Netflix itself is to cancel yet another Marvel title, Daredevil, arrived today, signifying that these platforms are looking to boost their own content over competitors.

Debt reduction

AT&T’s news arrived in part to reassure its shareholders that it is working on reducing the debt it has accrued after its $84.5bn acquisition of Time Warner.

AT&T chairman and CEO Randall Stephenson said that company is focused on bringing its debt down so that it is no more than 2.5 time its earnings by the end of 2019.

To further bring down this debt, the company is considering selling off its 10% Hulu stake that it gained from the acquisitions, leaving co-owners Comcast and Disney to go head-to-head for the service.

AT&T shares rose by 1.2% by market cap on Thursday.