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YouTube TV strikes deal to hawk HBO Max

YouTube TV this week announced a broad distribution deal with AT&T's WarnerMedia that includes a commitment to sell HBO Max, a new subscription service set to debut in May and start at $14.99 per month.

YouTube TV didn't reveal the cut of HBO Max revenues it will get, but it is the first pay-TV distributor outside of AT&T to sign on to offer HBO Max to subscribers. AT&T has already announced it intends to pitch HBO Max to its base of pay-TV subs as part of a plan to convert about 10 million of its own customers on legacy HBO to the bigger streaming service. AT&T will also market HBO Max aggressively to its combined base of about 170 million mobile, pay-TV and broadband customers.

AT&T is also in talks with other pay-TV service providers, including cable operators, about distributing HBO Max and is expected to announce several more before the service's May debut. However, cable ops and other pay-TV distributors that offer the traditional HBO service today will need to be convinced to tack on HBO Max, a service that AT&T/WarnerMedia will also sell directly to consumers on a standalone basis, and possibly accelerate cord-cutting.

Meanwhile, higher rates of cord-cutting suit YouTube TV just fine. The new distribution pact with WarnerMedia also paves the way for YouTube TV to offer (or extend the offer of) several other channels in the WarnerMedia stable, including TBS, TNT, truTV, CNN, HLN, Turner Classic Movies, Adult Swim and Cartoon Network. YouTube TV also, for the first time, will be able to sell the legacy HBO and Cinemax premium services.

YouTube TV, launched almost three years ago, has about 2 million subscribers and is one of a handful of virtual multichannel video programming distributors that are capturing a subset of consumers who have cut the cord on traditional pay-TV providers.

Forging deals with pay-TV providers will be key for AT&T/WarnerMedia to meet some of its initial goals for HBO Max, which will launch with about 10,000 hours of content. Getting YouTube TV on board could cause more traditional and OTT-based pay-TV providers to follow suit.

Under the current plan, WarnerMedia expects HBO Max to lure in 75 million to 90 million subs worldwide, including 50 million in the US, by 2025. A less expensive, ad-supported version of HBO Max is slated to launch sometime in 2021.

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— Jeff Baumgartner, Senior Editor, Light Reading

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