AT&T CEO Says WarnerMedia to Pull TV Shows From Rivals as Streaming Service Launches

Randall Stephenson - Economic Club Lunch- Getty-H 2019
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"We'll be bringing a lot of these media rights, licensing rights, back to ourselves," Randall Stephenson told an industry conference as the studio stands to lose licensing dollars.

AT&T CEO Randall Stephenson on Tuesday said WarnerMedia is prepared to take content back from rivals for its upcoming direct-to-consumer streaming service.

“The Warner Bros. library is an amazing library. It’s incredible.... It’s a TV production machine and will produce over 70 shows this year alone. Think about everything from Friends and Seinfeld and the Big Bang Theory. All of this TV production is owned by Warner Bros. and we will be bringing a lot of these media rights, licensing rights, back to ourselves to put on our own SVOD video product," Stephenson told the JP Morgan Technology, Media and Communications Conference in Boston.

AT&T in a statement confirmed the phone giant "plans to take back some owned-content previously licensed to others and instead make it available on the upcoming WarnerMedia SVOD service" anchored by premium content from HBO, Warner Bros. and Turner.

Netflix late last year announced that Warner Bros. TV-produced Friends would remain on the streaming platform through 2019. The new agreement for Friends gave AT&T-owned WarnerMedia the option in 2020 and beyond to also stream the popular series on its forthcoming Netflix rival, which Stephenson on Tuesday touted as a premium offering, filled with HBO and Warner Bros. content, as it goes head-to-head in competition with Netflix.

"I don't think people yet have an appreciation for what this product will bring to bear. It's a luxury brand in terms of content," Stephenson told the investors conference. 

WarnerMedia's Netflix competitor is set to debut in the fourth quarter of 2019 and will feature three content tiers when the offering launches.

Stephenson also told the investor conference that the telecom giant's John Stankey-led WarnerMedia unit is investing heavily in new content for HBO as Game of Thrones nears its series end. "There's a lot of content stacked up. We have a lot of great content coming on line as Game of Thrones winds down," he insisted.

AT&T completed its $85 billion acquisition of Time Warner last year and then changed the entertainment division's name to WarnerMedia, with its HBO, Turner and Warner Bros. divisions set to compete against Netflix amid cord-cutting and a turn by consumers to streaming services.

After the Time Warner deal, Stephenson said paying down debt remains a priority for the phone giant, in part through asset sales. AT&T's nearly 10 percent stake in Hulu was worth $1.43 billion when recently sold back to the streaming service, which now has Walt Disney as its majority owner.

"I'm getting more confident that we will overachieve that," Stephenson said of the goal of reaching $6 billion to $8 billion in asset sales this year.

May 14, 1:15 p.m. Updated with a statement from AT&T on pulling owned-content licensed to others to stream on upcoming WarnerMedia SVOD service.