CEO Stankey Says AT&T Key to HBO Max Success

AT&T just announced it is spinning off a 30% minority stake in WarnerMedia for $43 billion, the latter including Warner Bros., Turner, HBO and HBO Max. AT&T CEO John Stankey contends the Max subscription streaming platform launched last summer would not be “where it is today” without the assistance and support of the telecom giant.

Speaking May 24 on the virtual JPMorgan 49th Annual Global Technology, Media and Communications Conference, Stankey said vertical integration of the former Time Warner media giant (a.k.a. WarnerMedia) helped the telecom expand its brand while validating Max on a global scale.

HBO and HBO Max ended the most-recent fiscal period with 44.2 million combined subscribers. That tally could expand to 63.9 subs worldwide when Max launches in Latin America and the Caribbean in June. A less-expensive ad-supported tier is slated to a launch next month as well.

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“I think realistically, HBO Max would not be where it is today, if not for the strength of the two combined companies, what AT&T was able to bring both in distribution as well as some of the economic clout — market clout, to be able to normalize agreements, and get the product and service off the mark,” Stankey said.

He said AT&T’s continued push of wireless distribution and high-speed Internet, helped more than pave the way toward consumer adoption of HBO Max.

“We had a strong belief that we could help our domestic connectivity business significantly,” Stankey said. “And that started us down the path of the direct-to-consumer evolution.”

The executive contends Max will help AT&T expand high-speed Internet and fiber connections in markets around the world.

“Our connectivity business is kind of captive to the United States for the most part,” Stankey said. “And as a result, when you start looking at the opportunity to grow a fantastic subscriber base … we kind of look at this and say, ‘it’s time to unleash the media assets to go and seize, you know, multi $100 billion opportunity and become one of the premier assets for distributing content,'” he said.

Discovery CEO David Zaslav will be tasked with operating WarnerMedia and Discovery+, the latter the five-month-old SVOD service featuring largely reality-based DIY programming. Stankey contends the combined companies’ synergies can help fund growth in the new OTT video business.

“It’s a deeper content library that can carry forward. And it brings exactly some of that heft in the international side of things, [which is] going to be necessary to scale up [Max and Discovery+] worldwide.”

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