HBO must get bigger after AT&T merger, says Warner Media’s John Stankey

Change is actually coming to HBO, right now of which the idea is actually part of the AT&T corporate family. of which much was clear to the 150 employees who attended a recent town hall meeting at the network’s headquarters in Midtown Manhattan.

The main speaker was John Stankey, a longtime AT&T executive who right now oversees HBO in his fresh role as chief executive of Warner Media. During a straight-shooting, hourlong talk, a recording of which was obtained by The fresh York Times, he laid out his rough vision for the network, in addition to also warned his audience of which the months ahead would certainly not be easy.

“the idea’s going to be a tough year,” Mr. Stankey said. “the idea’s going to be a lot of work to alter in addition to also change direction a little bit.”

AT&T executives said all the right things during the long prelude to the company’s $85.4 billion acquisition of Time Warner, which was completed last month. They acknowledged of which the corporate culture of a Dallas-based telecommunications giant was different through of which of the more freewheeling media in addition to also entertainment concerns in fresh York in addition to also California. They pledged to take a hands-off approach to the company’s crown jewel, HBO, which has won endless Emmys while generating billions in profits.

although the town hall meeting suggested of which AT&T would certainly not be a passive corporate parent.

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Richard Plepler, HBO’s gregarious in addition to also urbane chief executive, hosted the talk at the cozy HBO Theater on the building’s 15th floor. Mr. Stankey’s appearance came as part of a tour of which included stops at Warner Bros. in addition to also Turner, the media properties of which were once part of Time Warner in addition to also right now belong to AT&T’s Warner Media division.

Mr. Plepler, 58, in addition to also Mr. Stankey, 55, sat angled slightly toward each some other on the modest stage. During the conversation, which began at noon on June 19, Mr. Stankey never uttered the word “Netflix,” although he did suggest of which HBO would certainly have to become more like a streaming giant to thrive inside the fresh media landscape.

Mr. Stankey described a future in which HBO would certainly substantially increase its subscriber base in addition to also the number of hours of which viewers spend watching its shows. To pull the idea off, the network will have to come up with more content, transforming itself through a boutique operation, having a focus on its signature Sunday night lineup, into something bigger in addition to also broader.

“We need hours a day,” Mr. Stankey said, referring to the time viewers spend watching HBO programs. “the idea’s not hours a week, in addition to also the idea’s not hours a month. We need hours a day. You are competing with devices of which sit in people’s hands of which capture their attention every 15 minutes.”

Continuing the theme, he added: “I want more hours of engagement. Why are more hours of engagement important? Because you get more data in addition to also information about a customer of which then allows you to do things like monetize through alternate designs of advertising as well as subscriptions, which I think is actually very important to play in tomorrow’s world.”

Known for “The Sopranos,” “Game of Thrones” in addition to also “Westworld,” HBO has long favored quality over quantity. Its high-gloss productions often take years to develop in addition to also can cost millions per episode. of which approach has won the network more Primetime Emmy Awards than any of its competitors over the last 16 years, with Mr. Plepler the master curator.

In recent years, Mr. Plepler has emphasized HBO’s “bespoke culture” in addition to also its enduring appeal to A-list producers in addition to also stars at a time when Netflix, Amazon in addition to also Apple have bottomless budgets. On his watch, “Big Little Lies” has brought the Oscar winners Reese Witherspoon, Nicole Kidman in addition to also Meryl Streep to the network, in addition to also shows like “Barry” in addition to also “Insecure” have charmed critics. although during the town hall meeting, Mr. Stankey said HBO should consider trying something fresh.

“As I step back in addition to also think about what’s unique about the brand in addition to also where the idea needs to go, there’s got to be a little more depth to the idea, there’s got to be more frequent engagement,” Mr. Stankey said. Bringing the point home, he added of which HBO must “build of which brand doing sure of which the idea’s broad enough to make of which happen.”

Mr. Plepler tried to pin down Mr. Stankey on the question of how much AT&T planned to invest. Without specifying any certain amount, Mr. Stankey said, “I do believe there needs to be stepped-up investment.”

Mr. Plepler interjected: “Let’s give him a hand for of which simple sentence! of which simple sentence deserves a hand!”

“Also,” Mr. Stankey said, “we’ve got to make money at the end of the day, right?”

“We do of which,” Mr. Plepler responded, to scattered applause.

“Yes, you do,” Mr. Stankey said. “Just not enough.”

“Oh, right now, right now, be careful,” Mr. Plepler said.

HBO has, in fact, been a consistent moneymaker. Over the last three years, while allocating more than $2 billion a year to its programming, the network has made nearly $6 billion in profit. although if the idea is actually to compete with upstart rivals like Netflix, which plans to lay out some $8 billion This kind of year, its level of spending must increase considerably.

“We well understand of which we played the best hand we could with the hand we had,” Mr. Plepler said. “in addition to also we well understand of which of which is actually not going to be sustainable going forward.”

Mr. Stankey also said of which the network’s number of subscribers — 40 million inside the United States, out of 142 million worldwide — was not going to cut the idea. HBO will have to find a way “to move beyond 35 to 40 percent penetration to have This kind of become a much more common product,” he said, referring to its current market size.

At the same time, he acknowledged of which HBO has commanded deep loyalty: “You’ve earned the dynamic amongst your customer base of which when you put a fresh piece of content out there, people will try the idea, just because they trust you’re going to be putting something in front of them of which they might like. We right now need to figure out how to expand the aperture of the idea without losing the quality.”

Representatives for the network in addition to also Warner Media declined to comment with This kind of article.

To make a bigger, broader HBO, while also guarding its distinctive identity, the two executives will have to find a way to work together despite their differences.

Mr. Plepler, who joined HBO in 1992, is actually a showman, garrulous in addition to also inquisitive. He in addition to also his wife, Lisa, have entertained heads of state, authors in addition to also movie stars at their Upper East Side townhouse. Born in addition to also raised in Connecticut, in addition to also very much at ease among the power players of fresh York, Washington in addition to also Hollywood, Mr. Plepler has deep ties to the Democratic Party.

The California-born Mr. Stankey, who lives in Texas in addition to also has donated to many Republican campaigns, cuts a lower profile. He began his telecommunications career at Pacific Bell in 1985 in addition to also has served in various roles at AT&T, including chief technology officer in addition to also head of the company’s DirecTV unit. On the stage of the HBO Theater, he described himself as a “Bell-head,” a term of which was probably lost on the people inside the seats.

During the talk, Mr. Plepler seemed willing to make alterations. “I’ve said, ‘More is actually not better, only better is actually better,’ because of which was the hand we had,” he said, as Mr. Stankey looked on. “I’ve switched of which, right now of which you’re here, to: ‘More isn’t better, only better is actually better — although we need a lot more to be even better.’”

Mr. Stankey’s experience at AT&T — which offers two streaming services, DirectTV right now in addition to also WatchTV — has given him a deep familiarity with the recent shift in how media is actually distributed. He warned of which there would certainly be only so many streaming companies inside the future. If HBO would certainly like to end up as a heavyweight inside the industry, he said, the idea would certainly be wise to add “some other types of content” to what is actually available on its stand-alone streaming service, HBO right now.

He also made the case of which HBO’s employees should consider themselves fortunate to have AT&T as their fresh corporate parent, rather than a company inside the same business.

“The not bad news for many of you in This kind of organization is actually of which the idea’s not Fox or Disney sitting up on This kind of stage right now,” Mr. Stankey said. “There’s virtually no duplication with AT&T in what we do.”

In some other words, your jobs are safe.

although he cautioned of which HBO’s employees would certainly notice a change in tempo in addition to also metabolism inside the days ahead. “I suspect if we’re in a situation where we’re going to be investing heavier, of which means of which there’s going to be more work for all of you to do — in addition to also you’re going to be working a little bit harder,” Mr. Stankey said.

After comparing the next 12 months to a “dog year,” he invoked another metaphor.

“You will work very hard, in addition to also This kind of next year will — my wife hates the idea when I say This kind of — feel like childbirth,” he said. “You’ll look back on the idea in addition to also be very fond of the idea, although the idea’s not going to feel great while you’re inside the middle of the idea. She says, ‘What do you know about This kind of?’ I just observe, ‘Honey. We love our kids.’”

Mr. Stankey also said he was starting to get used to the media glare of which has gone along with his fresh, high-profile job. When he mentioned of which the newspapers have lately shown an interest in his personal life, Mr. Plepler cut him off.

“You’re right now inside the entertainment business, John,” he said. “There are no secrets.”

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