WarnerMedia, which was created after AT&T’s purchase of Time Warner in February, is a juggernaut rivaling the likes of Netflix and Disney. The company owns the Warner Bros. movie library as well as the deep Turner Classic Movies archive, the premium-cable channels HBO and Cinemax, and the many Turner Broadcasting channels, such as TBS, TNT, CNN, TruTV, and Cartoon Network/Adult Swim. According to a Wall Street Journal report last week, the WarnerMedia chief executive John Stankey is planning to launch an online platform that brings all of that together for $16 to $17 a month, which is just a little more than an HBO Now subscription costs.
If WarnerMedia’s service launches as planned in early 2020 (WSJ pegged next March as the proposed date), it’ll come months after Disney+, which will tap into that company’s library of classic animated films, Pixar projects, Marvel shows and movies, and the Star Wars universe. Disney also now has full control of Hulu and just completed an acquisition of Fox, an almost century-old studio whose archives will help fill either streaming service. The company’s ultimate plan is to bundle Disney+ (priced at $7 a month) with Hulu and ESPN+ as a package deal. Meanwhile, tech giants including Netflix, Amazon, and Apple are spending huge sums producing enough original content to keep pace.
This ongoing arms race means there’s more original television to consume than ever before, but it also means the financial burden on consumers will continue to grow. Even as people cancel their cable subscription to save money, the streaming era will offer more of the large-scale bundling of channels that made cable television what it was, attracting viewers with marquee items such as sports or movies but making them pay for the whole media package. WarnerMedia+ (or whatever name it ends up getting) will use HBO to bait viewers into subscribing at higher prices for everything else.
That plan was spurred into action by Netflix, which spooked executives such as Stankey into thinking the only way to compete with the company was to churn out TV at a similar rate. Last year, Stankey lectured HBO employees on the company’s failings, despite its generally excellent track record for producing high-quality, award-winning shows that yield billion-dollar profits. “I want more hours of engagement,” Stankey told them. Several months later, the HBO CEO Richard Plepler stepped down.
But Netflix’s staggering spending on original content came as the company realized that many of its most popular offerings—shows such as The Office that were licensed from other companies—would become more expensive as studios began to learn the value of streaming media. In December, Netflix paid WarnerMedia $100 million to retain the rights to the sitcom Friends for one more year, a colossal sum that WarnerMedia likely agreed to because it knew its own service wouldn’t be ready until 2020. But slowly and surely, the corporations are beginning to pull their properties back, recognizing that exclusivity will be the way to lure new subscribers. The boundaries of this digital age have been redrawn, and by 2020, the exciting world of streaming media might start to look very old-fashioned once again.