Earlier this week, I wrote about
the news that HBO head Richard Plepler would be stepping down from his post amidst the revocation of autonomy by new parent AT&T. In my view, this is batshit crazy on the part of AT&T. And now that the re-org is complete
and Robert Greenblatt has been put in charge, I wanted to add a few more thoughts based on more quotes out of the AT&T camp.
“If you don’t make a change, you’re not going to get any change in the product,” Mr. Stankey said in an interview on Monday.
Okay, but HBO is a fantastic product. Why would you want to change it? Because you’re trying to compete with well, everyone:
Mr. Stankey’s assignment is to help AT&T beat out its traditional rivals Verizon, T-Mobile and Sprint by offering not only service plans but also “Game of Thrones” and 24-hour news. At the same time, AT&T’s entry into the media sphere will eventually allow it to compete in the streaming business against companies it has rarely done battle with before, including the Walt Disney Company, Comcast, Netflix, Amazon and others.
Good luck with that. Also, Apple!
He emphasized that AT&T didn’t want to muddy the brands within Warner Media, a group comprising HBO, CNN, TNT, Cartoon Network and the Warner Bros. film and TV studios.
“We just needed to get them to sing and dance differently and have them take different approaches,” he added.
The appointment of Mr. Greenblatt allows Warner Media to speed up its plans for a streaming business, a process that was hampered under the older structure, Mr. Stankey said.
“We had to put a bit of a Band-Aid organization on top of things before we made this change,” he said. “Still, I think we’ve done a remarkable job with what we had. The new combined WarnerMedia will be much more successful filling in the gaps.“
Concerning the resignations of Mr. Plepler, who had been at HBO for 27 years, and Mr. Levy, who had spent 32 years at Turner Broadcasting, Mr. Stankey said, “I was disappointed but I don’t know that I was completely surprised.” He added, “When you have someone who had a tremendous amount of autonomy, they tend to covet that.”
Yes, especially when that autonomy has contributed to the success of the entity. And when he was led to believe he would continue to have said autonomy.
Mr. Stankey plans to be a much more active steward of Warner Media than its executives had anticipated, three people familiar with the new AT&T said. He has started to consolidate advertising, distribution and production departments across Turner and HBO, as well as some of the back-end functions like human resources, accounting and technology. Those moves effectively took away large chunks of matters once overseen by Mr. Plepler and Mr. Levy, the people said.
Consolidating the backend and services for some of these things undoubtedly makes sense. And yet, HBO was running a very profitable business…
In Mr. Stankey’s view, Warner Media needed to reorganize the TV networks in a way “where they could cooperate more together,” he said, which meant that some top executives would have reduced roles. He said his discussions with Mr. Plepler and Mr. Levy, which took place separately, never got far enough to explore what roles they each might accept.
I understand why AT&T felt this way. I just continue to feel like it’s going to be a huge mistake with regard to HBO (and maybe the Turner properties too!).
At a company presentation in November, he outlined three tiers of online video services that have been in the works: an entry-level option centered on films; a “premium” service that includes original television programming and films; and a final product that includes both of those tiers plus classic movies, comedy and children’s content. Under the plan, HBO would still be available as a stand-alone service.
This sounds like a complete and total mess.
Look, it’s obvious what AT&T is thinking here. It’s basically the oft-cited "synergies” joke. AT&T didn’t see a path to compete with Netflix and the like with HBO and a piecemeal of other properties. As a bonus, they saw a way to potentially cut costs in the long term.
The issue here is that it is a mistake to try to compete with Netflix. (On their own turf, no less.
) That game is over, Netflix won quite a long time ago. Yet HBO also won
, by continuing to focus on being a more bespoke, upscale (not to mention more profitable) version of Netflix. AT&T ultimately didn’t understand what it was buying in HBO. And that’s ultimately why they are going to fuck it up.