• by Alex Weprin , October 10, 2018

AT&T’s WarnerMedia division, which includes HBO, Warner Bros. and Turner, is planning a major new direct-to-consumer streaming service to launch in the fourth quarter of 2019.

The service will start with HBO and its library of programming, but will also include new and library content from Warner Bros. and Turner channels, which include TBS, TNT, and Cartoon Network.

The announcement marks a shot across the bow to streaming giants like Netflix, as well as competitor Disney, which is also planning a new streaming service to launch late next year.

WarnerMedia owns a 10% stake in Hulu, which by many accounts is the second-most-popular streaming service in the U.S. and includes some WarnerMedia programming. 

The news was significant enough that AT&T filed an 8-K with the Securities and Exchange Commission elaborating on the announcement.

For starters, WarnerMedia says it believes that the service will not disruptive to its linear TV business, which sees cable companies, satellite companies and others pay hefty monthly fees to carry its channels.

“We expect to create such a compelling product that it will help distributors increase consumer penetration of their current packages and help us successfully reach more customers,” the company says in the SEC filing.

WarnerMedia already relies on distributors to help sell subscriptions to HBO, including HBO Now, the company’s streaming service. It is not clear whether it would turn to a similar model for the upcoming service.

AT&T says it will fund and support the new project by reallocating existing resources.

“We expect financial support to launch this product to come from a combination of incremental efficiencies within the WarnerMedia operations, consolidating resources from sub-scale D2C efforts, fallow library content, and technology reuse,” the company says in the filing.

It will make use of unused library content, shutting down some of the company’s smaller direct-to-consumer offerings, and reusing technology it already owns to stream video content.