With HBO Max, AT&T mixing it up with giants

Is a pandemic the perfect time to launch a new streaming service? AT&T sure hopes so.

The phone company is investing billions in HBO Max, its first big entertainment venture since it spent $85 billion for Time Warner in 2018. The service launched Wednesday in the United States.

“People are going to look at the price point first,” said Steve Nason, research director at Parks Associates. HBO Max costs $15, same as the HBO Now service it’s supposed to replace, with discounts after the launch limited to some AT&T customers. Other new streaming services such as Disney Plus and Quibi launched with cheaper prices and bigger discounts.

Entertainment companies like AT&T’s WarnerMedia are broadly shifting to streaming video, following in the wake of Netflix, as more people drop traditional cable bundles.

HBO Max comes stacked with goodies, with classic quality-TV series from HBO like “The Sopranos,” “The Wire” and “Sex and the City;” comfort-food network TV in “Friends” and “The Big Bang Theory”; Superman and Batman movies from DC. The Warner Bros. film library stretches back to Hollywood’s golden age. There’s even a reboot of Looney Tunes.

The company has predicted 50 million U.S. subscribers by 2025, building on a base of 34 million HBO customers, who pay their cable company for the channel and the HBO Go app or who subscribe to the HBO Now standalone streaming service.

Max also has the potential to entice wireless customers as AT&T offers it as part of a bundle. But the competition for customers’ attention and dollars is fierce.

“They’re going shoulder to shoulder with media titans,” said Wells Fargo analyst Jennifer Fritzsche. “They haven’t played in that sandbox before.”