AT&T and Warner Media Leadership Outline Changes Coming to HBO Over the Next Year

On June 19, former AT&T executive and new chief executive of Warner Media John Stankey spoke to a group of HBO employees about changes coming to the premium cable company in the near future. The discussion was held in the wake of AT&T's acquisition of Time Warner, which owns HBO, and also included HBO's chief executive officer Richard Plepler.

The telecommunications company previously stated that it would take a "hands-off approach" to running HBO, but The New York Times this weekend reported on Stankey's speech and it sounds like that might not be the case. According to a video of the discussion, Stankey explained Warner Media's intent to align HBO more alongside streaming companies like Netflix in order to increase its subscriber base, although he refrained from referencing Netflix by name.

This means creating more content that releases at a faster pace, in comparison to HBO's current stable of limited Sunday night-focused shows. According to Stankey, the goal is to increase the hours per day viewers watch HBO, which is currently less than rivals like Netflix and Hulu because of HBO's smaller catalog.

“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 this thread, Stankey specifically stated that more hours of user engagement means that Warner Media can "get more data and information" to monetize through advertisements and new subscription options.

“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.”

As the discussion continued, Stankey appeared to have butted heads slightly with Plepler on the topic of HBO's monetization, which Stankey believes can be increased through his new methods. Plepler claimed that the company is already a consistent moneymaker, to which Stankey responded: "Yes, yes you do... Just not enough."

Stankey and Warner Media hope that an increased output of original content will boost HBO's 40 million paid subscribers in the United States, which Stankey said as of now "was not going to cut it." Comparatively, Netflix earlier this year had 55 million U.S. subscribers and Hulu in May had 20 million.

HBO's business currently expands across paid cable add-on packages, the connected HBO GO app, and standalone HBO NOW app. Stankey said that Warner Media's plans will kick off soon and "there's going to be more work" for HBO employees over the next twelve months, which he called a "dog year."

While Apple wasn't mentioned in the discussion, the Cupertino company is another upcoming competitor in the streaming TV market, with plans to debut more than a dozen television shows beginning sometime in 2019. Although the distribution of these shows remains unclear, the company is rumored to be planning a bundle with original TV content, Apple Music, and more.