The competition in the video streaming sector is heating up. The space, where Netflix (NYSE: NFLX) seemed to rule the roost, has seen more players enter the game last year with more to come this year. AT&T (NYSE: T) and WarnerMedia will launch its streaming service HBO Max in May.
HBO Max, like Walt Disney’s (NYSE: DIS) Disney +, comes with a strong body of content that includes popular movies and TV shows. So should Disney be worried about having HBO as a rival? The answer would be a bit of both yes and no.
Firstly, (as stressed many times before) Disney’s acquisition of Fox has given it a vast trove of content that includes some of the most popular movie franchises. The company is also working on its slate of original content. In its most recent earnings call, Disney said its original show The Mandalorian was a huge hit among audiences.
In terms of content, HBO Max is not at all behind. The service will be the exclusive destination for all-time favorite shows like Friends, The Big Bang Theory and Game of Thrones. Also, if Disney has Marvel, AT&T has DC. All the popular movies from the DC universe will be available on HBO Max within the first year of launch.
With regards to pricing, Disney’s bundled offering, which includes Disney+, Hulu and ESPN+, costs $13/month. HBO Max will roll out 10,000 hours of premium content for $15/month. It can be assumed that fans wouldn’t mind shelling out a bit more to see Friends and Game of Thrones.
HBO Max will be available to 10 million existing HBO subscribers upon launch and WarnerMedia is targeting 75-90 million premium subscribers by the end of 2025 across the US, Latin America and Europe.
Disney + gained more than 10 million sign-ups on the first day of its launch in November and ended its most recent quarter with 26.5 million paid subscribers. Disney plans to expand its streaming service to Western Europe, Eastern Europe, Latin America and various Asia-Pacific territories in 2020 and 2021.
To sum it up, with great content, a loyal fan base and not much difference in pricing, HBO Max is very likely to go neck to neck with Disney + once it launches. While Disney might feel the heat slightly, it is very much capable of holding its ground against AT&T. The viewers, meanwhile, appear very much spoilt for choice!
Shares of Disney were down 2.5% in afternoon hours on Tuesday while shares of AT&T were down 1.9%.
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