Think HBO’s been doing just fine? Think again — at least as far as new owner AT&T is concerned.
Back in June, the mammoth merger between AT&T and Time Warner was approved, giving AT&T heaps of new assets to make money off of and expand. One such property is HBO, which AT&T originally claimed they would take a hands-off approach with. That seems like the obvious course of action, as HBO has been a television giant for decades, has won countless Emmy awards and has dictated the conversation in popular culture with generational hits such as Game of Thrones and The Sopranos.
Evidently though, that no longer seems to be AT&T’s strategy. According to audio obtained by the New York Times, AT&T executive John Stankey told 150 HBO employees in a town hall meeting at HBO’s headquarters in Manhattan that “it’s going to be a tough year.” He went on to clarify, “It’s going to be a lot of work to alter and change direction a little bit.”
Stankey seems to be angling toward pushing streaming services more to compete with the likes of Netflix and Hulu, though those competitors were never mentioned by name. HBO does have its own streaming offerings in the form of HBO GO and HBO NOW, the latter of which doesn’t require a cable subscription. But as the Times notes, “Stankey described a future in which HBO would substantially increase its subscriber base and the number of hours that viewers spend watching its shows. To pull it off, the network will have to come up with more content, transforming itself from a boutique operation, with a focus on its signature Sunday night lineup, into something bigger and broader.”
Unfortunately, this is anathema to HBO’s long-standing and proven formula of focusing on a few sprawling, high-production value epics. A move to more bite-sized, lowest-common-denominator programming may increase the bottom line, but moving away from what has made HBO so culturally relevant for so long is a risky move — even Netflix, ostensibly HBO’s biggest competitor in the current landscape, has realized the importance of original programming, and have spent millions on programming that have become cultural sensations, such as Stranger Things.
Mr. Stankey told HBO’s employees, “We need hours a day. 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.”
He went on to explain, “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.”
This sounds like a sadly all-too-familiar strategy of missing the forest for the trees, and putting corporate profit ahead of captivating programming. It would be understandable if HBO was some struggling studio, but HBO’s current strategy is proven to work: HBO’s revenues in 2017 rose 13% to $1.7 billion.
Game of Thrones is wrapping up next season anyway, but it would be interesting to see if a series such as GoT would make the cut in AT&T’s vision of a meme-ified HBO. At millions of dollars spent and feature film runtime per episode, would the series meet AT&T’s new standards that focus more on data collection than customer satisfaction? Will a series like Last Week Tonight with John Oliver, which prides itself on pushing the envelope and starting controversy, even be allowed to exist?
Despite AT&T’s original comments on the matter, it appears we better buckle in for some big changes coming to HBO and its programming. In their own words, some tough times are ahead for the venerable network.