Disney Hires Warner Bros. Digital Vet Craig Hunegs

Disney reportedly has hired Craig Hunegs as president of newly formed Disney Television Studios, which will include 20th Century Fox assets once the merger is consummated.

Hunegs, who most recently headed Warner Bros. Digital Networks as the unit’s founding senior executive, was responsible for the studio’s over-the-top video initiatives. He also oversaw Warner Bros. Television Group’s business and strategy operations.

Hunegs, a frequent mention in Media Play News’ annual “Digital Drivers” feature, helped incorporate classic Warner movies in the now-shuttered FilmStruck movie streaming service.

The executive was also instrumental in the August 2018 launch of DC Universe, Warner’s SVOD service featuring DC Comics content.

“Developing new ways for consumers to access some of our most popular and iconic brands and franchises … on the devices they choose, is one of our studio’s top priorities,” Hunegs said last year.

 

 

 

Kevin Tsujihara: A Misplaced Asset at WarnerMedia

As the dust settles from WarnerMedia’s management shuffle, with former NBC Universal executive Bob Greenblatt assuming chairmanship of the media company’s entertainment unit, including budding over-the-top video – Kevin Tsujihara, chairman/CEO of Warner Bros., expanded his duties to include – consumer products?

It’s an odd career move for Tsujihara, whose long history in digital content distribution dates back to the dotcom era where he spearheaded Warner’s short-lived Entertaindom platform.

In an interview 10 years ago, Tsujihara questioned traditional distribution in a rapidly evolving digital age. He pushed for early electronic sellthrough movie release dates ahead of DVD, arguing EST margins were better than packaged media’s cash cow status. And he advocated for early access to theatrical movies in the home at a premium price, otherwise known as PVOD.

It’s a progressive mindset that over time convinced Time Warner CEO Jeff Bewkes to put Tsujihara in charge of Warner Bros., arguing his digital vision and recognition of alternative distribution channels outweighed the status quo at the venerable film studio.

A legacy Tsujihara nurtures to this day spearheading stacking rights of Warner TV content to distribution partners across the ecosystem.

“At Warner Bros., what we want to do is take the show and put it on the most appropriate platform,” Tsujihara told Deadline.comin a March 4 interview.

Tsujihara was a big supporter of the studios banding together to create a digital storage locker for movies, first championing UltraViolet and later joining the other majors, sans Paramount, in Movies Anywhere  – a platform that links to seven online retailers, including iTunes, Amazon Instant Video, Vudu, Comcast’s Xfinity Store, Google Play, Microsoft Movies & TV and FandangoNow.

In an interview last month with the Los Angeles Times, Tsujihara reiterated continued support for PVOD, despite the fact most exhibitors and Wall Street analysts consider it a failed venture.

“It’s about finding the right platform for the content,” he said. “If consumers want to be able to experience [a movie] in the home sooner, then they should have that. That’s where we’d like to see the movie business go.”

Regardless, as WarnerMedia readies a branded OTT platform, Tsujihara is tasked with creating consumer product opportunities for Cartoon Network, Adult Swim, Boomerang, Otter Media and Turner Classic Movies, among others.

“The lion’s share of their profitability comes from affiliate sales and advertising,” he told Deadline. “So a vertically integrated entity would say, ‘How can we drive more consumer products revenue from these properties?’”

Apparently Tsujihara is looking forward to the vertical challenge – one not unprecedented in home entertainment. Former Disney home entertainment executive Bob Chapek transitioned to consumer products following years of peddling home video.

Now he’s chairman of parks and resorts since 2015 and considered by some Disney’s next CEO when Bob Iger retires.

Maybe Tsujihara is on to something.

 

Report: Trump Personally Sought to Block AT&T/Time Warner Merger

Despite claims to the contrary, President Trump wanted to block AT&T’s $85 billion acquisition of Time Warner — largely for political reasons, according to a report by The New Yorker.

According to the publication, which cited a “well-informed source,” Trump in 2017 called on former economic advisor Gary Cohn and then-chief-of-staff John Kelly to personally ensure that the Justice Department filed a lawsuit against the merger — which it did in November, citing antitrust concerns.

Trump, on the 2016 campaign trail, had said the merger would be bad for the country. According to the New Yorker, Trump’s decision was largely due to his dislike for Time Warner’s CNN news division, which he often called “fake news” in response to critical reports of his administration.

“The President does not understand the nuances of antitrust law or policy,” a former unnamed official told the publication. “But he wanted to bring down the hammer.”

Subscribe HERE for FREE Daily Newsletter!

When a U.S. federal court judge ruled in favor of AT&T, the DOJ filed an appeal, which was rejected last week by an appeals court. The merger resulted in the creation of WarnerMedia, which includes Warner Bros., HBO and Turner.

The intervention by the Justice Department raised eyebrows at the time as it represented the agency’s first since it successfully blocked AT&T’s $39 billion acquisition of T-Mobile in 2011.

Indeed, The New Yorker stated Trump had no objection to 21st Century Fox’s $71.3 billion asset sale to The Walt Disney Co. by longtime supporter Rupert Murdoch, whose Fox News business remains an influential media asset to the President.

Bob Greenblatt Named Chairman of WarnerMedia’s Entertainment Unit; Kevin Tsujihara’s Role Expanded

As expected, AT&T March 4 named former NBC Universal executive Bob Greenblatt chairman of WarnerMedia’s entertainment and over-the-top video businesses. Greenblatt reports to WarnerMedia CEO John Stankey.

Greenblatt, who left NBC Universal six months ago, joins the former Time Warner company following last week’s exits of HBO boss Richard Plepler and Turner’s David Levy.

Greenblatt oversees HBO, TNT, TBS, truTV, and the company’s over-the-top video business. Kevin Reilly remains in charge of Turner programming, in addition to spearheading WarnerMedia’s pending streaming video service.

Subscribe HERE for FREE Daily Newsletter!

Meanwhile, longtime home entertainment executive Kevin Tsujihara remains chairman/CEO of Warner Bros., while adding responsibilities involving children and young adult viewers.

Specifically, Tsujihara will now also oversee Cartoon Network, Adult Swim, Boomerang, Otter Media, Turner Classic Movies and WarnerMedia’s licensed consumer products.

CNN president Jeff Zucker adds the title chairman of WarnerMedia news and sports, while Gerhard Zeiler transitions from president of Turner International to chief revenue officer at WarnerMedia.

“We have done an amazing job establishing our brands as leaders in the hearts and minds of consumers,” Stankey said in a statement. “Adding Bob Greenblatt to the WarnerMedia family and expanding the leadership scope and responsibilities of Jeff, Kevin and Gerhard — who collectively have more than 80 years of global media experience and success — gives us the right management team to strategically position our leading portfolio of brands, world-class talent and rich library of intellectual property for future growth.”

HBO Boss Richard Plepler Departs

Longtime HBO executive Richard Plepler is leaving the pay-TV channel, following a series of management changes underway at WarnerMedia that reportedly include bringing in former NBC Universal executive Bob Greenblatt as a senior executive reporting to CEO John Stankey.

Plepler, who joined HBO in 1992, helped greenlight myriad hits for the platform, including “Game of Thrones,” “True Detective,” “Veep” and “True Blood.” He also oversaw the launch of HBO Now, the standalone subscription streaming service.

Subscribe HERE to our FREE daily newsletter!

“Hard as it is to think about leaving the company I love, and the people I love in it, it is the right time for me to do so,” Plepler wrote in a memo to staff as reported by Variety. “In the past weeks, I’ve thought a lot about the incredible journey of this company in the nearly 28 years that I have been blessed to be here. It’s a journey of great pride and accomplishment because so many of you, and many others before us, have made HBO a cultural and business phenomenon.”

Plepler’s departure comes 48 hours after a federal appeals court upheld AT&T’s $85 billion acquisition of Time Warner. It also comes a day after AT&T CFO John Stephens told an investor group that the telecom’s senior management did not wish to upend the culture at the entertainment unit that includes HBO, Warner Bros. and Turner with further personnel changes.

“They [had] a CFO [Howard Averill] and we have a CFO. Those kinds of head-counting synergies have been achieved,” Stephens said.

Of course, the handwriting was on the wall ever since AT&T first closed the acquisition last summer. Stankey, in a town hall meeting with employees and Plepler, strongly intimated that the status quo at HBO would not continue.

The executive said he sought to make HBO programming habitual in a market driven by portable devices that capture consumer attention “every 15 minutes.”

“It’s going to be a tough year,” Stankey said at the time. “It’s going to be a lot of work to alter and change direction a little bit.”

 

CFO: WarnerMedia Asset Better Than Expected; Disney Eyeing AT&T’s Hulu Stake

A day after a federal appeals court ruled in favor of AT&T’s $85 billion acquisition of Time Warner, resulting in the creation of WarnerMedia, CFO John Stephens said ownership of the parent to Warner Bros., HBO and Turner has been a fiscal home run.

“It’s turned out to be an asset that may be better than we expected. And we expected a lot,” Stephens told an investor group.

Speaking Feb. 27 at the Morgan Stanley technology, media and telecom conference in San Francisco, Stephens attempted to shoot down media speculation that layoffs and additional cost cutting would occur following the court’s decision.

“We’ve been very careful to set up a separate operating unit [with WarnerMedia] that’s a lot like Time Warner,” he said. “We wanted to protect the culture, we [didn’t] want a finance bean counter from a telephone company go in to what is a tremendously good asset.”

Stephens said results over the past nine months at WarnerMedia have been “consistently” good. They continue to generate cash, they continue to generate value, produce some great-value content.

“The performance of the people at Time Warner … I couldn’t be more pleased with,” he said.

Indeed, through Feb. 24, Warner Bros., led by Aquaman and Clint Eastwood’s The Mule, continues to top all studios at the domestic box office with 22.4% market share and $313.4 million in revenue, according to BoxOfficeMojo.com.

“They continue to generate cash, they continue to generate value … produce some great-value content,” Stephens said. “Sharing that really high-quality content is important.”

From a M&A perspective, he said supply-side integration, marketing, data analytics would be combined without infringing upon WarnerMedia’s culture.

“They [had] a CFO [Howard Averill] and we have a CFO. Those kinds of head-counting synergies have been achieved,” Stephens said.

Stephens said he expects the final season of “Game of Thrones” to drive HBO Now subscribership. He said AT&T is considering putting HBO on unlimited mobile wireless packages – with the increased revenue used to fund additional content spend.

“There’s benefits there that can fund some of those things,” Stephens said. “We want to have that same kind of [‘Thrones’] excitement year round.”

Separately, Disney is reportedly in discussions with AT&T to acquire its 10% stake in Hulu. When combined with Fox’s 30% interest, Disney could control 70% of the SVOD and online TV platform, along with Comcast’s 30% stake.

 

 

 

 

Appeals Court Denies DOJ Bid to Block AT&T’s $85 Billion Time Warner Purchase

A federal appeals court Feb. 26 ruled against the Justice Department’s attempt to block AT&T’s $85 billion acquisition of Time Warner, which led to the formation of WarnerMedia.

The court found that a lower court judge’s decision last summer approving of the transaction did not violate antitrust guidelines.

“The judgment of the district court appealed from this cause is hereby affirmed,” the court wrote in its ruling.

The Justice Department had argued that the merger would enable AT&T, which also owns DirecTV, to leverage its stake in the satellite operator to force pay-TV competitors to pay more for content from Warner Bros., HBO and Turner, which includes CNN.

Some observers speculated the government’s attempt to block the deal revolved more around President Trump’s openly hostile approach to CNN, which he has labeled “fake news,” and, along with other media outlets not named Fox News, an “enemy of the people.”

Indeed, the DOJ’s legal challenges represented the first to a corporate vertical merger in four years.

 

IHS: New Video Services to Add $3.6B in Revenue, Saturate Domestic OTT Market

An influx of pending over-the-top video services is projected to add $3.66 billion to the direct-to-consumer entertainment market by 2023, according to new data from IHS Markit.

The research firm said services from Disney, Apple, and WarnerMedia are expected to launch this year, with NBC Universal launching an ad-supported platform to pay-TV subscribers in 2020.

These services have the potential to add 53 million paying subs to the U.S. market by 2023, effectively growing the total number of subs by 25%.

“Subscriber growth of this magnitude assumes an aggressive strategy from all the major services,” Dan Cryan, executive director of research and analysissaid in a statement.

“This strategy could include making movies available earlier or bundling, either at no extra charge or as a low-cost add-on, with other products and services that already have large customer bases. Less aggressive policies would result in lower overall subscriber growth, but they would still expand the video subscription market.“

According to the “Disney, Apple, Netflix: Scenarios for the Future of Online Video” report, Netflix and Amazon Prime Video will continue to lead the market for the next few years. Apple could potentially catch up with Hulu by 2023, depending on what happens to that service after Disney’s acquisition of Fox has been finalized.

“A successful Disney service would also be among the top-tier services in the U.S. by 2023,” Cryan said.

Regardless of Netflix and Prime Video’s market dominance, IHS said the market for pure-play video services will become “exceptionally” competitive. And despite their burgeoning original content spending, studio-driven upstarts bring their own strong content libraries to the equation.

WarnerMedia Streaming Service Eyeing Original Content in 2020

WarnerMedia is launching a proprietary over-the-top video platform in the fourth quarter featuring catalog content from subsidiaries HBO, Warner Bros. and Turner.

The unnamed service plans to roll out original fare beginning in 2020, according to Kevin Reilly, president of TBS, TNT and head of content and strategy at the new service.

Speaking Feb. 11 at the Television Critics Association annual winter tour in Los Angeles, Reilly said the service would be beta-launched featuring catalog fare from Warner, Warner Bros. Television, New Line Cinema, HBO and Turner subsidiaries such as Adult Swim, The CW, and Cartoon Network, among others.

“Our beta will not have original programming, but we will introduce it in 2020,” Reilly said. “Expect it in all the verticals: kids and family, teens up to adult.”

Subscribe HERE to our FREE daily newsletter!

While traditional media and OTT services scramble to produce differentiating distribution platforms featuring original content, WarnerMedia intends to walk the fine line between licensing and restricting programming to third-party services.

WarnerMedia made news last year renewing the coveted “Friends” catalog to Netflix for one year for a reported $100 million. It was a move that contradicted in part CEO John Stankey’s stated mission to restrict proprietary programming to Netflix, Amazon Prime Video and other services not named Hulu.

WarnerMedia is a co-owner of Hulu with Disney, Fox and Comcast.

“The dynamic those [SVOD] incumbents are playing with are still 75% to 80% of viewing tonnage is that licensed content,” Stankey told analysts last November. “Their pressure is they’ve got to make this pivot to get people off of viewing content that sits in our library, or the Disney library, and get it onto their own.”

Reilly concurs, saying he expects the “crown jewels” of Warner programming to eventually migrate predominantly to the new service.

“We’re not pulling it away [from third parties] but it certainly is something we’re looking to do,” he said. “I think for the most part sharing destination assets [like ‘Friends’] is not a good model. They should be exclusive to the [new] service.”

The executive said the service would also feature shows such as “Titans,” “Doom Patrol” and pending “Swamp Thing,” heretofore exclusive to DC Universe, the SVOD service launched last year.

“There is no piece of content in the Warner Media portfolio that will not be looked at for the service,” Reilly said. “That doesn’t mean every piece of content will end up on the service or end up on the service permanently. Content goes through a natural life cycle at which it benefits at times being off a platform or being on a new platform.”

 

Criterion Collection Sets April 8 Launch Date for SVOD Service

The Criterion Channel, a new classic movie streaming service, has set an official launch date of April 8 in the United States and Canada and will be available on desktop, Apple TV, Amazon Fire, Roku, iOS, and Android devices.

The streaming service will feature more than 1,000 classic and contemporary art-house films, at a subscription price of $10.99 per month or $99.99 for an annual subscription. Those who sign up before the launch date can do so at a discounted rate of $9.99 per month or $89.99 per year.

Further sweetening the charter subscription offer is a 30-day free trial as well as access to a members-only Movie of the Week between now and launch.

Criterion says the new streaming service (criterionchannel.com) will give subscribers access to “constantly refreshed selections of Hollywood, international, art-house, and independent movies, plus access to Criterion’s entire streaming library of more than 1,000 important classic and contemporary films from around the world.”

Movies in Criterion Collection’s library include Stanley Kubrick’s Dr. Strangelove, Guillermo del Toro’s Pan’s Labyrinth, the Beatles’ A Hard Day’s Night and David Lynch’s Mulholland Drive.

The company said the service will offer “constantly refreshed selections” of Hollywood, international, art-house, and independent movies. Criterion Channel also will include a Sunday Spotlight feature, focusing on a different director, star, genre, or theme as well as exclusive content like guest programmer series Adventures in Moviegoing, Tuesday’s Short + Feature, the Friday Night Double Feature, Meet the Filmmakers, Art-House America, and Observations on Film Art (billed as a 15-minute-per-month film school).

As reported last November by Media Play News, subscriber pushback over the shuttering of the Turner Classic Movies SVOD service FilmStruck led The Criterion Collection to announced plans to launch its own freestanding service in spring 2019 through a special arrangement with WarnerMedia.

Wholly owned and controlled by the Criterion Collection, the independent Criterion Channel will pick up where it left off as an add-on to the FilmStruck service, with thematic programming, regular filmmaker spotlights, and actor retrospectives, featuring major classics and hard-to-find titles from Hollywood and around the world, complete with special features, including  commentaries, behind-the-scenes footage and original documentaries.

The library of films will also be part of WarnerMedia’s recently announced direct-to-consumer platform slated to launch in the fourth quarter of 2019. WarnerMedia shut down FilmStruck Nov. 29.