AT&T's (T - Get Report) WarnerMedia has upped the ante in the streaming wars, with plans for a new HBO Max service that will become the exclusive streaming home of "Friends" and other hit shows and movies.
HBO Max will make its debut next spring as competition in the streaming sector ramps up, with established players such as Netflix, Inc. (NFLX - Get Report) and Amazon.com, Inc. (AMZN - Get Report) and its Prime Video facing challenges from new services being launched by Apple Inc., (AAPL - Get Report) The Walt Disney Co. (DIS - Get Report) and Comcast Corp.'s (CMCSA - Get Report) NBCUniversal.
WarnerMedia's new streaming service could have a direct impact on Netflix right out of the gate with the loss of "Friends," which was Netflix's second most popular show in 2018 in terms of minutes watched, with viewers racking up more than 32 billion minutes watching the iconic 1990s sitcom, according to Nielsen. HBO Max is paying $425 million to carry "Friends," which is owned by Warner Bros., for five years starting in 2020, according to a source cited by the Wall Street Journal.
And two years from now, in 2021, Netflix will lose its current biggest draw, "The Office," to NBCUniversal's planned new streaming service. Netflix subscribers spent more than 52 billion minutes watching reruns of The Office last year.
"HBO Max will bring together the diverse riches of WarnerMedia to create programming and user experiences not seen before in a streaming platform ... starting with the phenomenon that is 'Friends,'" said Robert Greenblatt, chairman, WarnerMedia Entertainment and Direct-To-Consumer, in a press release.
Still, Netflix investors were shrugging off the news Tuesday afternoon, with the news of the departure of "Friends" having previously been rumored. Netflix signed a deal last year to continue to have the exclusive streaming rights to "Friends" through 2019.
Shares of Netflix were up 0.95%, to $379.72 on Tuesday afternoon, while shares of AT&T were down 0.72% to $33.50.