As expected, WarnerMedia (formerly Time Warner) is planning to launch over-the-top video service featuring Warner Bros. and HBO catalog content, in addition to Turner Sports fare. The media company will disclose more details in the fourth quarter, AT&T CEO Randall Stephenson told an investor group.
Speaking Sept. 12 at Goldman Sachs 27thAnnual Communacopia confab in New York, Stephenson said premium digital content – notably HBO – is the focus in today’s home entertainment market.
“HBO, we think in terms of SVOD, is a very unique asset,” Stephenson said. “Netflix is the Walmart of SVOD and HBO is the Tiffany. It is a very premium high-end brand. And Turner is one of the best networks around.”
The executive’s comments underscore AT&T’s main decision to spend $85 billion acquiring Time Warner – a transaction currently under appeal by the Department of Justice: Premium content.
“Longform scripted content for a world of media, we like what we’ve got,” Stephenson said. “And digital, CNN.com is the most-visited news website in the world.”
And with that content, Stephenson said it is imperative to deal directly to the consumer. He said existing media companies have traditionally operated on a wholesale business model. Today, these companies have to aggressively go after the consumer with OTT video.
“Direct-to-consumer relationships are really critical. And with AT&T, we have 170 million direct-to-consumer relationships … to leverage and distribute this content,” he said. “And if you put together CNN.com, BleacherReport and Otter Media, the monthly … number gets closer to 300 million.”
Indeed, Stephenson and WarnerMedia CEO John Stanley contend HBO remains an underutilized brand. In an earlier town hall meeting among employees over the summer, Stankey said he would tighten the screws on HBO, in addition to upping production budgets.
Stephenson reiterated that pledge.
“You’d like to fill out the schedule on HBO … but we’re not talking about Netflix-scale investments,” he said.
When asked about the DOJ’s appeal, Stephenson said 600 days had transpired since AT&T first announced its intention to acquire Time Warner. He called it an interesting process.
Specifically, Stephenson said DOJ’s antitrust case was not “very compelling,” adding the federal judge’s order revealed the government’s weaknesses in the case.
“So, the DOJ lost this case and the burden of proof was on them. And they didn’t come close to meeting the burden of proof,” he said. “And now they appeal. We don’t have to overcome the burden of appeal.”