AT&T chief operating officer John Stankey told a virtual industry audience Wednesday that its latest streaming video offering HBO Max -- set to debut on May 27 -- could eventually be paired with its AT&T TV software based product as the TV business continues to move toward a more compact streaming environment.
Stankey, who will take over for the retiring Randall Stephenson as CEO in July, talked up the HBO Max service at the JP Morgan Technology, Media and Communications conference Wednesday, adding that it is a key part of AT&T’s entertainment strategy.
Stankey said the ultimate vision is to eventually package the software-based AT&T TV and HBO Max together.
“What Max and AT&T TV have in common is they are both software based, independent of any proprietary hardware, allowing customers to get access content over any device, over any hardware platform," Stankey said. "They’re low friction, they can be deployed literally by a flick of a computer switch somewhere in a back office. That’s an important aspect. And that’s what consumers will see as the customer-based Max grows. It becomes a more scaled distribution element within AT&T, certainly something that surpasses 25-28% of households like our pay TV offering. That becomes a lead basis of entertainment and how we get into households.”
Stankey added that as the TV business continues to transition from the old 500-channel universe to more consolidated, streaming offerings of live sports, scripted and unscripted content and news, bundling the products together seems natural.
“You want a platform that can distribute both. So AT&T being software driven, HBO Max being software driven, user interface capabilities, bundling, price start to move together,” Stankey said. “I think we’re at a very natural place to see that begin to occur and our TV business and our SVOD business start to become one as we get out over the next couple of years.”
But Stankey said one key online distributor -- Amazon FireTV -- could be missing from the mix.
“We’re going to be in virtually all app stores, with one exception -- we may not be in the Amazon Fire[TV] app store when all is said and done,” Stankey said at the virtual conference. “We feel really good about the distribution dynamic, the availability of the product. Those that are HBO subscribers immediately move into Max. It ‘s going to be a really strong first day one. I think it’s going to generate a lot of word of mouth socially. It’s going to generate a lot of activity and what we’re doing for promotions attached to AT&T products is going to be beneficial.”
HBO could have some pretty big shoes to fill. The Walt Disney Co. set the streaming app bar high when it launched Disney + in November, attracting more than 10 million downloads on its first day. Disney + currently has about 30 million customers, and projections are for the service to have more than 50 million subscribers by the end of the year.
On the other end of the spectrum, short-form streaming service Quibi has attracted less than expected interest, with about 2.5 million downloads in its first week. Quibi currently has about 3.5 million customers, and the company has blamed the tepid response to the COVID-19 pandemic.
AT&T has said it expects HBO Max to have about 50 million subscribers by 2025.