AT&T WarnerMedia will start a new streaming service for consumers in the fourth quarter of 2019, challenging Netflix and a planned product from Walt Disney.

A direct-to-consumer service would capitalize on WarnerMedia's vast library of movies, TV shows, documentaries and animation. Media companies are all scrambling to offer more direct services in response to consumers' cutting their cable subscriptions. AT&T, which completed its acquisition of Time Warner in June, also is looking for payoff from the $85 billion deal.

AT&T Chief Executive Officer Randall Stephenson telegraphed last month that the streaming product would be announced this quarter. The new service will be devoted to entertainment programming. CNN's live news won't be part of it.

At a conference, WarnerMedia chief John Stankey said the company has "years of pent-up investment" in its library. Stankey said he believes the market can sustain more than two streaming services, though fewer than 10. AT&T also has launched a $7.99-a-month streaming service focused on its DC Comics content. The company expects to defer some licensing revenue to later periods in the form of increased customer subscription revenue.

~Bloomberg News