HBO To The Max: Analysts Await Critical Pricing Info On New Subscription Streaming Service

WarnerMedia and parent company AT&T Inc. T on Tuesday offered new details about its upcoming streaming service, to be called HBO Max, including a spring 2020 launch date, but sell-side analysts continue to await more information, including critical info about price.

The new subscription streaming video service is seen as a competitor to Netflix, Inc NFLX and Hulu, among others.

HBO announced some of the content that will be exclusive to the streaming service, including rights to the long-running TV show “Friends,” which will come off of Netflix next year.  Other popular shows that HBO said will be on Max include “Pretty Little Liars" and “The Fresh Prince of Bel Air.”

The Analysts

Bank of America analyst David Barden continues to have a Buy rating on AT&T with a $37 price target.

Wells Fargo’s Jennifer Fritzsche has a Market Perform rating and a $30 target price on the stock.

The Theses

Despite the promise of new content, HBO’s current content “is clearly the anchor of this offering,” Fritzsche wrote in a note, but noted that questions remain about the full offering.

Barden also hit on holes in information about what Max will ultimately offer, noting that the company made no mention of plans for another big WarnerMedia franchise, “The Big Bang Theory,” and questioning why the company hasn’t said what its plans are yet around the DC franchise.

Price Remains Big Question

But both analysts are mostly waiting to see more info about pricing, which is expected in the fall. Fritzsche noted media reports have put it possibly at $16-$17 a month, which would be more expensive than Netflix and Walt Disney Co DIS’s coming streaming service Disney+.

“If this higher price point proves to be true we believe T will speak to the largest content library it brings vs. some of the other (direct to consumer) offerings,” Fritzsche wrote. Barden agreed the service is expected to be priced above the current HBO now price of $15 a month, and above Netflix’s $13.

Price Action

At time of publication, AT&T shares were trading up 0.58% at $33.73.

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