HBO will get a bigger budget under AT&T to compete with Netflix, but the fight will be fierce

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HBO

  • AT&T wants to increase HBO’s budget to develop more original content and compete with Netflix.
  • AT&T gained control of HBO after its purchase of Time Warner was approved this week.
  • It might be a steep hill to climb, though, as Netflix is dominating in original content in the eyes of consumers.

AT&T has big plans for HBO.

A judge approved AT&T’s $85 million purchase of Time Warner this week after the Justice Department attempted to block the deal with an antitrust lawsuit. That means that the wireless carrier now controls premium cable network HBO.

In an interview with Bloomberg, John Stankey, the incoming head of AT&T’s entertainment division, said that he wanted to increase HBO’s budget and invest “heavier in content development” in an effort to compete with streaming giant Netflix.

Bloomberg notes that even with an increased budget, it would be hard for HBO to rival Netflix: HBO’s programming budget for original shows and film deals in 2017 was $2.5 billion, compared to the $8 billion that Netflix plans to spend this year on original content.

HBO may have its hit series “Game of Thrones,” but that’s ending next year. Meanwhile, Netflix already has hit original programs in shows like “Stranger Things,” and it plans to have over 1,000 original shows and movies by the end of the year as a streaming war heats up against the likes of Hulu, Amazon, and Apple, which just gained a formidable partner in Oprah Winfrey.

But while research shows that Netflix is blowing away its competition in the eyes of consumers, HBO’s streaming service, HBO Now, is gaining momentum, and is expected to reach 7 million US subscribers by the end of the year.

HBO is still considered by many in Hollywood to be the gold standard of television, so it will be interesting to see what it can do against Netflix with an increased budget.