AT&T’s WarnerMedia will reportedly charge $16 or $17 per month for its HBO-centric streaming service when it launches at the end of this year, sources tell the Wall Street Journal.
That’s $1 to $2 per month more than what HBO charges for its current streaming service, both on its own (as HBO Now) and through other online distributors. In addition to HBO programming, the service will also include Cinemax content and movies from the DC universe. The Journal reports that AT&T has abandoned plans for a service with three separate price tiers, though WarnerMedia may still offer an ad-supported option for less money.
We reached out to AT&T for comment and will update if we hear back.
Earlier this week, the New York Times provided some extra color on AT&T’s pricing dilemma: HBO’s $15 per month price is “practically locked in because of contracts with distributors like Comcast and Dish,” the Times reported, and while HBO could lower its retail prices, that would mean less revenue coming in from the channel’s existing subscribers. At the same time, Disney has announced aggressive pricing of $7 per month for its Disney+ service, and Hulu recently reduced prices to just $6 per month for its ad-supported service.
Essentially, AT&T has to decide between placing a bigger bet on its future by cutting HBO prices or playing it safe with current HBO revenues. It sounds like the latter path will win out.