Reports have emerged that media conglomerate AT&T will launch one or more video-streaming services to compete with Disney+ and Netflix.
AT&T passed the last hurdle to complete its acquisition of Warner Bros. last week. Within the week it has announced a new direction for the newly minted WarnerMedia. It has brought HBO, TNT, TBS, and truTV into the fold to form one entity: WarnerMedia. Former Chairman of NBC Entertainment, Robert Greenblatt has been brought in to run this new division.
On the heels of this announcement, AT&T has also impressed on them to launch a new streaming service to compete with Netflix. This directive came because of the ‘changing landscape of media distribution in the world’. It seems that AT&T wants to hitch its wagon to robust growth of the digital streaming platforms globally.
“This change will provide the company with the agility and flexibility needed to build WarnerMedia’s brands across a variety of evolving distribution models with a more coordinated approach to the company’s original programming,” WarnerMedia announced in a press release.
This announcement comes just after news of HBO chairman and CEO Richard Plepler resignation came to light. Plepler was the face of HBO for close to three decades. He was the one who greenlit Game of Thrones and Veep, two of HBO’s biggest shows in the last decade. It is said that his decision came after the formation of WarnerMedia fructified. He feared that the autonomy and freedom of HBO may be compromised after the merger.
The entertainment industry was rocked by another high profile resignation last week. Turner Broadcasting’s President David Levy too chose to resign last week. His announcement too came before WarnerMedia’s formation was announced. It is said that Netflix is trying to hire both these high profile executives to run important divisions.
WarnerMedia wants more original content from HBO
Many have attributed the overnight and undeniable success of Netflix to its plethora of original shows and movies. Even though experts have counted the total number of shows, the audience has too many shows to choose from. This gives them a feeling of the value of money for their subscription amount which is as little as $10 per month.
Keeping this in mind, the first directive WarnerMedia gave to HBO execs was to ramp up the generation of original content. Even in June 2018, HBO bosses made headlines by pressuring their team to increase the number of shows they were making.
“We need hours a day. It’s not hours a week, and it’s not hours a month,” WarnerMedia boss John Stankey said. “We need hours a day. You are competing with devices that sit in people’s hands that capture their attention every 15 minutes.”
But people fear that this move may hamper the USP of HBO, which is quality content over quantity. Given that even their mini-series like ‘The Night Of’ become critical successes, the employees say they need more time.
To ease the pressure on the team, HBO bosses have said that shorter content, up to 20 minutes long, can be created. CEO Randall Stephenson has suggested this move. But this is not a new idea. When HBO launched its streaming service, HBO Now, they were toying with the same “in a mobile environment, a 60-minute episode might not be the best experience. Maybe you want a 20-minute episode.”
WarnerMedia is hedging its bets on a streaming service
Netflix has revolutionized the entertainment game in more ways than one. With over 139 million paying customers in over 200 countries, they have truly democratized content distribution.
With their merger with Warner Bros., AT&T hopes to join the bandwagon as well and slowly surpass the dominance of Netflix. And there is a lot riding on their attempt to enter the direct-to-consumer video streaming service.
In an interview with Variety, WarnerMedia CEO Robert Greenblatt said: “They are looking at the unique set of assets that they have and want to bring them together in a streaming service,” he said. “They want to be aggressive in this new world order. He wants me to pull it all together.”
The ‘He’ Greenblatt is referring to here is the AT&T chief.
But the main effort of the newly minted WarnerMedia is towards launching a streaming service at the same time as Disney. Greenblatt said: “The longer you wait, the harder it becomes.” Disney is touted to launch its streaming service, Disney+, by the end of 2019. At the same time, even tech giant Apple is planning to launch a streaming service in the coming months.
AT&T currently offers a DirecTV, an internet television package. Along with this package, it offers a small bundle of free channels called WatchTV. Because it already has access to televisions, the WarnerMedia streaming service will have ready has to access to American households.
Trump tried to stop the AT&T and Time Warner merger
One of the first decisions Donald Trump made when he stepped into the office of US President was to try and stop this merger.
Though he cited the antitrust law for this, the truth is said to be he did so because of his spite of CNN. CNN is a property of AT&T and will now become a part of the WarnerMedia conglomerate. And he is said to feel strongly about CNN because it almost always has an anti-Trump agenda.
On the other hand, he did not push back when Twentieth Century Fox was sold to Walt Disney. It is said he had no objections to this because his favorite news organization, Fox News, was a part of the deal.
AT&T’s merger with Time Warner is estimated to be worth $85.4 billion. This is the largest media merger ahead of the $71 billion acquisition of Twentieth Century Fox by Walt Disney Company.