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.
Also read: Why Disney + could go from strength to strength in the near future
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%.