Its traditional TV business is crumbling, but AT&T has promised investors it plans to stick out and be a major winner in the looming streaming wars.
As part of its third-quarter earnings report, AT&T says it expects to invest in the range of $1.5 billion-$2 billion in HBO Max next year and will spend approximately $1 billion in both 2021 and 2022 before HBO Max is expected to become profitable in its fourth year.
That’s a pittance compared to the money being funnelled into these services such as Netflix’s $15 billion in spending alone on content in 2019, though about on par with what Apple is said to be funneled into the handful of shows on its service.
AT&T CEO and chairman Randall Stephenson said on the earnings call: “I would tell you we feel very comfortable at these investment levels that we can do something very significant in the market and drive some significant subscriber gains. This is going to be a meaningful business to us over the next four or five years… This is not Netflix, this is not Disney… It’s going to have a very unique position in the marketplace.”
Many key details and questions remain with WarnerMedia set to unveil the service in full tomorrow at a media event in Burbank where it will provide info on pricing and availability. The company anticipates landing in the neighborhood of 50 million U.S. subscribers for HBO Max by 2025.