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AT&T Wants To Overhaul HBO, Says It Isn't Profitable Enough (arstechnica.com)
AT&T recently acquired HBO, as part of the Time Warner acquisition, "and it is already considering an overhaul that would see HBO produce more video that can compete for the attention of smartphone users," reports Ars Technica. "AT&T wants to boost revenue both in advertising and subscriptions, even if that means upending HBO's longtime strategy of producing a relatively small number of high-quality shows."
At a recent corporate town hall meeting, John Stankey, the longtime AT&T executive and new head of Warner Media, laid out the challenges and opportunities he saw for the network to around 150 employees. He said, in part: "It's going to be a tough year. It's going to be a lot of work to alter and change direction a little bit. [...] You will work very hard, and this next year will -- my wife hates it when I say this -- feel like childbirth... You'll look back on it and be very fond of it, but it's not going to feel great while you're in the middle of it. She says, 'What do you know about this?' I just observe, 'Honey. We love our kids.'" Audio of the meeting was obtained by The New York Times. From the report: The talk, held at HBO headquarters in New York City, was hosted by HBO CEO Richard Plepler. HBO must compete with smartphones for people's attention, Stankey said in this exchange with Plepler: "We need hours a day," Mr. Stankey said, referring to the time viewers spend watching HBO programs. "It's not hours a week, and it's not hours a month. We need hours a day. You are competing with devices that sit in people's hands that 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 and information about a customer that then allows you to do things like monetize through alternate models of advertising as well as subscriptions, which I think is very important to play in tomorrow's world."
At a recent corporate town hall meeting, John Stankey, the longtime AT&T executive and new head of Warner Media, laid out the challenges and opportunities he saw for the network to around 150 employees. He said, in part: "It's going to be a tough year. It's going to be a lot of work to alter and change direction a little bit. [...] You will work very hard, and this next year will -- my wife hates it when I say this -- feel like childbirth... You'll look back on it and be very fond of it, but it's not going to feel great while you're in the middle of it. She says, 'What do you know about this?' I just observe, 'Honey. We love our kids.'" Audio of the meeting was obtained by The New York Times. From the report: The talk, held at HBO headquarters in New York City, was hosted by HBO CEO Richard Plepler. HBO must compete with smartphones for people's attention, Stankey said in this exchange with Plepler: "We need hours a day," Mr. Stankey said, referring to the time viewers spend watching HBO programs. "It's not hours a week, and it's not hours a month. We need hours a day. You are competing with devices that sit in people's hands that 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 and information about a customer that then allows you to do things like monetize through alternate models of advertising as well as subscriptions, which I think is very important to play in tomorrow's world."
sigh!
"OW! MY BALLS!" will premier on AT&T's HBO.
Overhaul your fucking network first. How come you can't provide more than 1 megabit of upload bandwidth even in the middle of the most densely-populated and theoretically profitable areas in the US? South Korea has 100 megabit synchronous fiber connections running to houses with dirt fucking floors! What the fuck is wrong with you assholes?
You will work very hard, and this next year will -- my wife hates it when I say this -- feel like childbirth... - you will work 80+ hour weeks for at least the next year with no additional bonuses for anyone lower than VP level, so good luck keeping your personal life intact!
You'll look back on it and be very fond of it, but it's not going to feel great while you're in the middle of it. - if you don't get fired or quit, you get a gold star for making it through!
She says, 'What do you know about this?' I just observe, 'Honey. We love our kids. - The kids are going to feel pain and stress to toughen them up and be ready for anything in the real world!
(I wish the existing employees luck. Things were already insanely busy at HBO.)
which you get with each and every merger. This is why we should stop allowing mega mergers. Big mergers are expensive and what's the first thing you do when you spend a bunch of money on a business expense? Try to make it back. Mergers destroy jobs.
This was another good reason to oppose the Trump tax cuts. The mega-corps already said the money was all going to mergers and stock buybacks. The sort of thing that doesn't create jobs, it destroys them. Heck, it's easy to see why supply side economics fail. Businesses spend money to meet demand. Giving businesses more money does just that, gives them more money. Unless there's more demand they're just going to keep it. And if there's more demand they'll spend the money anyway. Yeah, there's a point where kleptocracy can kick in and choke a business, but you'd be surprised how far up that goes. Meanwhile the working class is choked with low wages and demand for everything is flat. Flat demand, flat job and wage growth.
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AT&T have decided to ruin one of the most successful brands in entertainment.
Right now, HBO competes and holds its own against Netflix and Amazon, both of which continue to invest and profit st their expense. Rather than compete, HBO plans to cede this ground, kill the goose laying the golden eggs, and bet it all on a strategy that takes them out if a market they excel at and run head first into one they donâ(TM)t understand and are ill equipped to compete in.
Thereâ(TM)s not a âoeplan Bâ here - once todayâ(TM)s creators abandon the HBO platform (which theyâ(TM)ll do in a heartbeat), thereâ(TM)s no going back if they change their minds later.
I guess this is what happens when a communications executive takes over a bunch of creatives. I live near NYC and it's nothing like LA, but the entertainment work scene here is pretty much the opposite of AT&T. It's not quite Don Draper 3-martini lunches but former colleagues of mine who now work in that business say it's pretty close. People are creative and used to having a fair amount of freedom around the way they get the job done.
When a creative company gets acquired by someone who just wants to squeeze it for all it's worth, they'll probably lose some of their better creative talent...those folks have options. AT&T is used to providing a cheap-to-deploy, incredibly high margin service. Once they start cracking the whip, the content quality is going to drop. I imagine the first thing they'll do is offshore every business process that isn't outsourced already. When that doesn't produce the savings, they're going to start cutting into the creatives' budget. No more personal assistants, free car service, free food, expense account dinners, etc.
Did anyone not expect this? A cellular company bought HBO and their first thought is episodes are too long and everyone wants to watch them on their phone. Oh and they want to add advertising, forgetting of course that most of HBO's subscribers do so because it DOESN'T have advertising.
They'll kill HBO with these plans before they ever evolve them to compete with Netflix. AT&T will slaughter the goose.
I'm more used to corporations doing a more subtle bait and switch game where they grow their popularity with quality products and then try and cut costs as subtly as possible. Outsourcing to China, using cheaper meat, getting rid of what their warranty covers.
Having a CEO just come out and say "We're going to send this channel straight into the shitter" right to our face is just a weird amount of honesty. I mean, they coach it in positive terms as PR people are ought to do. But even they acknowledge it's going to be painful.
HBO targeting PHONE audiences. So.... Westworld, but cut down to 6 second VINE clips. Season 10 of Game of Thrones will be flash animation with 3 characters remaining after the killing of the rest. And it won't be the expensive ones.