AT&T CEO John Stankey continues to express no concerns about the May launch of HBO Max, citing the unpredictable effects of COVID-19 as the only real flaw.
During a keynote session that opened the Wall Street Journal’s Tech Live conference today, Stankey said he was “very pleased” with the streaming service’s debut. Citing WarnerMedia Day, a meeting for investors and the press last October, he said, “We did exactly what we announced.”
Going through a series of results, he found that HBO Max achieved an hour of daily audience engagement and had a younger audience. The service is ahead of the first targets announced last year in terms of subscriber numbers.
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When asked by moderator Matt Murray, the journal’s editor-in-chief, for updated subscriber numbers, Stankey declined to offer any, citing AT & T’s earnings report for the third quarter on Thursday, which will include those statistics. On his quarterly earnings call in July, Stankey described the launch of HBO Max as “flawless” despite the company having attracted 4.1 million subscribers, a number that is widely considered to be quite modest. Only about a million of these early signups were direct-only customers, as opposed to current HBO subscribers who authenticated their Max permissions.
Dallas is not all rainbows and unicorns, the CEO admitted. “Am I satisfied that we are going at the right speed?” Asked Stankey. “I would like to see the pace accelerate.” He noted that Disney “has taken the customer acquisition curve higher than anyone expected,” which made the HBO Max numbers seem less sparkling. Disney reported 10 million signups to Disney + on launch day last November and 60.5 million subscribers worldwide in early August. Stankey has often tried to differentiate between Disney + and HBO Max in terms of audiences, arguing that Disney is aiming for a much narrower goal.
Stankey also discussed the reorganization of WarnerMedia, which aims to cut costs by 20% in a new wave of changes, the details of which are not yet finalized.
“We went in and all of a sudden, huge revenue streams disappeared from the company,” he said. “It was really clear that a new day had dawned.”
While COVID-19 didn’t directly cause the final rounds of changes, it sped up their timing by about a year, Stankey said.
“I feel good about the moves,” he said. “Now all we have to do is execute the right product and bring it to the customer that will ultimately drive some of the growth we want to see in direct customer business.”
In a whirlwind of 2020, Stankey was promoted to CEO at AT&T and has appointed Jason Kilar to lead WarnerMedia. The entertainment operations have seen several changes since AT&T completed its acquisition of Time Warner in 2018. That process was followed by a government antitrust lawsuit that wasn’t fully resolved until early 2019. A parade of high-profile executives has departed as gymnasts, HBO and Warner Bros have mingled like never before in their long history.
Stankey refused to comment on the constant undercurrent of speculation over the possible sale of assets like DirecTV, but said the conglom was focused on growth and the elimination of elements like “cost and distraction.”
The company was on its way to deleveraging and most recently completed the sale of its stake in Central European Media. WarnerMedia’s video game division and Xandr (short for Alexander Graham Bell) advertising unit were also recently acquired.
“I know there is a lot of speculation out there and I won’t be commenting on anything in particular,” said Stankey. He said AT&T is definitely not considering acquisitions.
Major structural changes reconfigured the entire entertainment landscape during Stankey’s tenure as WarnerMedia and continued under Kilar, the CEO added. What the company did was “nothing short of meaningful and absolutely spot on in terms of direction.” Like NBCU and most recently Disney, WarnerMedia has refined its approach to investing in and distributing content. “Now we need to take the lead to have the right product in front of consumers … while we push HBO Max forward.”
When asked about his favorite HBO show, Stankey quoted Westworld as saying. He also said he was “in camp” with Watchmen fans who yearn for another season of this Emmy winner. Creators Damon Lindelof and Casey Bloys, former HBO program director and now head of a larger WarnerMedia portfolio, have both indicated that another outing for the series is highly unlikely.
Peter White contributed to this report.