WarnerMedia Streaming Service to Offer Three Tiers of Subscriptions


AT&T has provided an update on its strategy following the acquisition of Time Warner, now known as WarnerMedia, including revealing new details about its planned three-tier streaming service.

The company hosted a meeting with financial analysts yesterday to discuss its strategy and 2019 outlook. “We are well positioned for success as the lines between entertainment and communications continue to blur,” said Randall Stephenson, AT&T chairman and CEO. “If you’re a media company, you can no longer rely exclusively on wholesale distribution models. 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.

“We have some of the world’s best content and 370 million direct-to-consumer relationships across mobility, video, broadband and our digital properties,” Stephenson said. “That exceptional combination enables us to deliver a broad spectrum of entertainment experiences—from premium video to skinnier over-the-top and mobile-centric bundles of live content, and a subscription video-on-demand product to launch late next year. And with Xandr, our advertising business, we’re using insights from our customer relationships, combined with our large advertising inventory, to drive higher yields on advertising.

“Our leadership position in communications and entertainment gives us a distinct advantage that will allow us to grow our share of both segments over time,” he said.

WarnerMedia, which represents about 17 percent of the company’s revenue and adjusted EBITDA, is planning to launch an SVOD service next year and potentially an advertising-supported VOD service in the future. Its initial direct-to-consumer SVOD beta application is slated to debut in the fourth quarter of 2019. The SVOD service will include three levels of service: 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 as well as an extensive library of WarnerMedia and licensed content.