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Home / Business / Like DirecTV tanks, AT&T says it will "package" TV with HBO Max

Like DirecTV tanks, AT&T says it will "package" TV with HBO Max



  AT&T executive John Stankey speaks in front of a backdrop saying
Enlarge / AT&T executive John Stankey at a presentation to investors in Warner Bros. Studios October 29, 2019, in Burbank, California.

AT & T's traditional television business is on the mind, and the company has lost nearly 5 million satellite and cable TV customers since the end of 201

6.

But AT&T President John Stankey sees a way forward in recreating the traditional cable TV package on the Internet. AT&T's HBO Max is scheduled to launch in May 2020 for $ 14.99 a month, and AT&T has set an ambitious target of 50 million US subscribers in five years.

A subscriber number that would have made HBO Max far greater than AT & T's DirecTV satellite division and its U-verse cable TV service. But ultimately, service customers may end up looking pretty much like DirecTV, U-verse or cable TV.

"Stankey said the vision for HBO Max is to create a bunch of content that includes movies and shows that are not owned by WarnerMedia in addition to those it creates and licenses on its own," Vox wrote yesterday in a report titled " HBO Max wants to be the next cable bundle instead of the next Netflix. "The report summarizes an interview Stankey gave at Recode's Code Media conference.

HBO Max will "at some point" be "a platform that we let others bring content into," Stankey said. "I don't think, from my point of view, we're ever going to have a lock or a monopoly on creativity."

"Re-aggregate and re-bundle"

Stankey, a 34-year-old AT&T employee who is president and CEO, is the deputy commander of AT&T CEO Randall Stephenson and may be in line to become CEO director when Stephenson resigns. He is also CEO of WarnerMedia, the AT&T division that includes HBO.

Stankey noted that the proliferation of online video services has caused the traditional cable bundle to "fragment" into several platforms. Customers are frustrated by the "fragmentation of the bundle", but AT&T can bring the package back together, Stankey said.

"We're basically unbound to pack," Stankey said. "At some point, there will be platforms that are reassembled and repackaged, and we want the platform of [HBO Max] to eventually be a place where aggregation happens again. And that doesn't just mean our content."

You can see the entire Stankey interview in the video below. The Buntings Discussion Starts at 29:10:

AT & T's John Stankey and Recode Senior Media Correspondent Peter Kafka on stage at Code Media 2019 in Los Angeles.

With AT&T, expect price increases

If AT&T fully recovers the cable bundle and still paid $ 14.99 a month for it all, that would be a good deal. But that's unlikely, as AT&T has already developed a history of raising online streaming prices to amounts far greater than introductory prices.

DirecTV Now, AT & T's online alternative to DirecTV's satellite service, was originally pitched in 2016 as a $ 35 monthly plan with more than 100 channels. But AT&T has raised prices several times and lowered the number of channels by removing those who are not part of AT&T-owned Time Warner Inc.

The service, since renamed "AT&T TV Now," today costs $ 65 in per month for 45 channels including HBO. Packages with more than 100 channels cost at least $ 124 a month, while the "Ultimate" package costs $ 135 per month for 125 channels.

For $ 14.99 a month, HBO Max's price will equal Netflix's standard and premium offerings, which cost $ 12.99 and $ 15.99 respectively. HBO Max's price would also be identical to today's price on HBO Now, though HBO Max would have all HBO content plus other stuff. But as we noted with the DirecTV Now example, it would not be surprising to see AT&T raise HBO Max prices significantly in the years after they were released.

AT&T hates net neutrality problems

AT&T becomes a major player in online video would raise concern about net neutrality because AT&T could use its control over home and mobile broadband networks to steer customers from competing online services and against AT&T

In yesterday's Recode interview, Stankey argued that it would be ridiculous for anyone to worry at all about AT&T or other internet providers acting in anti-competitive ways with online streaming.

"You will be hard-pressed to point to an example of someone's behavior suggesting that there is some form of discrimination, favoritism or anything else that happens in how people access content on the Internet through a broadband connection," Stankey said. "There is a problem that does not exist. There is absolutely nothing that arises."

Stankey prefers that consumers direct his watch elsewhere. "I would be much more concerned about the extent of what is happening in terms of distribution platforms on mobile OSs, in terms of terms and conditions related to new product development on it and what it does to squeeze innovation, than anything to do with how the traffic over The Internet is being processed today, "he said.

But Stankey is wrong that AT&T has not shown "favoritism" in its treatment of video services. The Federal Communications Commission in January 2017 accused AT&T and Verizon of violating net neutrality rules by allowing their own video services (including AT & T & # 39; s DirecTV) to stream on their cellular networks without accounting for customers' data loss while charging other video providers for same data exemptions from cap.

FCC Chairman, Ajit Pai, rescinded this finding shortly after the acquisition, but that does not change the fact that AT&T provided its own video content favorable treatment during the data caps imposed on the mobile service.

AT&T imposes data capsules ranging from 150 GB to 1 TB on most of its home broadband plans, which can make it difficult for TV viewers to get rid of cable or satellite and use only online streaming. But AT&T gives customers an upgrade to unlimited data if they pay an extra $ 30 a month or subscribe to DirecTV or U-verse TV. This means that customers who prefer online streaming over AT & T's own TV services will have to pay $ 30 a month extra to get enough data or pay $ 10 for each additional 50 GB.

Under these schemes, AT&T did not intentionally damage Netflix's power. and other third party services. But AT&T has made it more expensive for customers on AT&T broadband connections to make extensive use of these third-party services. The company has also used unlimited data advantage to push customers towards AT & T's own TV services.

The old net neutrality rules do not include a ban on data capping or zero rating schemes that exclude content from data caches, but the FCC evaluated individual implementations to determine whether they were competitive or restrictive. Since the Trump administration's rescission, the FCC has not enforced any rules of neutral neutrality or scrutinized data cap practices. But the state of Washington enforces an online neutrality law, and states including California intend to do so in the future after all appeals are exhausted in a lawsuit over the FCC's repeal of net neutrality rules.

Stankey states that AT&T will not abuse its control over broadband networks regardless of whether net neutrality rules are enforced in the future. "There was nothing [in terms of ISPs discriminating]. It has not happened," he said yesterday. "We all want a good broadband connection that people can use to get where they want to go."


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