Investing in more programming for HBO will be a focal point for WarnerMedia as it prepares to launch its direct-to-consumer subscription platform by the end of next year, AT&T chief Randall Stephenson told investors Tuesday. And he weighed in on the flap over Netflix and “Friends” streaming rights, asserting that WarnerMedia has retained the ability to carry the durable sitcom on its service starting in 2020.
During a Q&A at the UBS Global Media and Communications conference, Stephenson said the original programming offering for the unnamed service will largely revolve around HBO at the outset. Stephenson said the goal is for HBO to deliver a steadier stream of original series on a year-round basis.
But Stephenson cautioned that AT&T does not want HBO to “become another Netflix” with an $11 billion (and growing) annual tab for content. He called Netflix “an impressive warehouse” of shows but said the WarnerMedia offering would be a more curated effort that may eventually encompass programming from “third-party” producers.
Stephenson addressed the rumors earlier this week about the prospect of reruns of Warner Bros. TV’s durable comedy “Friends” leaving the Netflix platform as of Jan. 1 (a social media tempest sparked by an errant tweet from Netflix). Stephenson assured that Netflix has exclusive streaming rights to the show for at least another year, but WarnerMedia has the right to put “Friends” on its service in 2020. “It’s the kind of content we would definitely want to have on our platform,” Stephenson said, even on a non-exclusive basis.
Stephenson acknowledged that 2018 was a “difficult” year for the DirecTV unit which saw significant subscriber losses. Once again, Stephenson indicated that DirecTV is bracing for battle with programmers in the coming months as it gets more selective about the channels it carries.
“The days of media companies accumulative massive amounts of content and shoving oversized bundles down on the consumer — those days are gone,” Stephenson said. “There are a large number of customers saying we’re not paying those kind of prizes.”
DirecTV is adjusting the mix of channels and the price points for its DirecTV Now service as it is in the process of “thinning the content out” to channels that are “really relevant to customers” in an effort to keep the price tag at around $50-$60. It also has another low-cost DirecTV-branded bundle coming out in the first quarter which Stephenson promised would be “at a much lower price point.”
Stephenson talked up the promise of the AT&T Watch package that offers live streaming of about 30 cable channels for $15 as an incentive to help reduce churn among AT&T’s wireless customers.
The traditional top-flight DirecTV package continues to cater to high-end customers who want hundreds of channels and a broad spectrum of sports. The satcaster’s “NFL Sunday Ticket” football smorgasbord is still a marquee offering but Stephenson admitted it has limited value to DirecTV because the rights are restricted to DirecTV’s linear channel feed. He said “Sunday Ticket” had become “something of a churn management product.”
Stephenson told the crowd that all of AT&T will get a boost in the coming years as the long-awaited rollout of 5G high-speed wireless service starting in the second half of 2019. The company is in the process of sending technicians “to climb every cell tower in the country” to make technological improvements and deploy AT&T’s stash of spectrum that will have the effect of expand AT&T’s network capacity by 50%.
“I’m as energized about 5G as any technology that we’ve ever deployed,” Stephenson said.
AT&T is heading back to federal court on Thursday for oral arguments in the Justice Department’s appeal of the June ruling that allowed AT&T to complete its hard-fought buyout of Time Warner. Stephenson expressed optimism that the appeals court will not be able to find any “errors in law” in the decision by U.S. District Court Judge Richard Leon.
“Judge Leon wrote a pretty right order,” he said. “It was very fact-specific. It should stand up well in the appellate review.” Stephenson said he expected the appeals panel to rule by the first quarter of next year. “We’re anxious to get this piece behind us,” he said.
Source: Read Full Article