HBO Max Has Already Cost AT&T $1.2 Billion
AT&T (NYSE: T) already outlined its plans to invest heavily in HBO Max, the streaming service aimed at broadening the appeal of its premium cable network. But that reality really hit home in the company's fourth-quarter earnings report.
In its slide presentation accompanying the report, AT&T notes its WarnerMedia segment forewent about $1.2 billion in licensing revenue by holding back content for HBO Max. WarnerMedia previously sold those shows externally to competitors like Netflix (NASDAQ: NFLX).
At its investor day in October, AT&T said it would see incremental investments of just $100 million in 2019, stepping up to $2 billion in 2020. "Our incremental investment includes spending for new content, forgone licensing revenue of our content, and operating expenses for the direct-to-consumer platform and customer acquisition costs," AT&T CFO John Stephens said at the presentation (emphasis mine).
Source Fool.com
