AT&T Launching New OTT Video Service in Q4 2019

AT&T Oct. 10 disclosed it plans to launch another over-the-top video service in the fourth quarter of 2019.

The telecom, which acquired Time Warner (HBO, Warner Bros., Turner) in part to deliver content via direct-to-consumer video strategy, operates online TV service DirecTV Now and plans to bow AT&T Watch, a $15 monthly sports-free online TV service.

“This is another benefit of the AT&T/Time Warner merger, and we are committed to launching a compelling and competitive product that will serve as a complement to our existing businesses and help us to expand our reach by offering a new choice for entertainment with the WarnerMedia collection of films, television series, libraries, documentaries,” CFO John Stephens wrote in a regulatory filing.

Stephens said the OTT video service and WarnerMedia content would create “a compelling product” for pay-TV distributors looking to increase consumer penetration of their bundled channel packages.

“It would help us successfully reach more customers,” Stephens wrote.

The executive said he expects financial support for the OTT video service to come from a combination of incremental efficiencies within the WarnerMedia operations, consolidating resources from sub-scale direct-to-consumer efforts, library content, and technology re-use.

“We expect to defer some licensing revenue to later periods in the form of increased customer subscription revenue,” he wrote.

 

AT&T Reiterates Operating Turner Separate from WarnerMedia Pending DOJ Appeal

AT&T CFO John Stephens reaffirmed the telecom will continue to operate Turner Broadcasting System as a separate business from WarnerMedia.

Turner, which includes CNN, TBS, TNT, Turner Classic Movies, Cartoon Network, Adult Swim, Boomerang and TruTV, had been included under the Time Warner corporate umbrella prior to latter’s $85 billion acquisition by AT&T.

With the Department of Justice appealing its federal court antitrust loss stopping the merger, AT&T said it would operate Turner separately until the appeal deadline on Feb. 28, 2019.

Speaking Sept. 10 at an investor event in New York, Stephens said that while Turner would historically operate under WarnerMedia – headed by John Stankey – it would remain independent until resolution of the DOJ appeal.

“While we have committed to running Turner as a separate business pending the appeal, we intend to move the results of some of our other network properties such as our regional sports networks under Turner when we report [third-quarter, ending Sept. 30] results,” Stephens said.

It’s been speculated that CNN, which has been in the crosshairs of President Donald Trump’s “fake news” allegations, was the reason the DOJ filed its late antitrust litigation in the first place.

AT&T had sought to obtain communication between the White House and the DOJ regarding the case but was denied by the judge overseeing the case.

“This just continues what has been a very odd series of procedures by the DOJ,” Paul Sweeney, media analyst at Bloomberg, told The Dallas Morning News in July. “It’s perplexing to legal experts I’ve spoken to, and certainly investors.”

Meanwhile, Otter Media, the digital media company co-owned by AT&T and former 21stCentury Fox executive Peter Chernin, has been moved from AT&T’s entertainment group segment to WarnerMedia following the telecom’s acquisition of Chernin’s stake last month.

“We will continue to show financials at a reporting unit level for Turner, HBO and Warner for comparability purposes,” Stephens said.

DC Universe SVOD Service Bowing ‘DC Daily’ News Show

WarnerMedia’s pending subscription streaming video service DC Universe is launching a news show dubbed “DC Daily,” which bows Aug. 29 at 4:30pm PT and is hosted by director Kevin Smith.

The show’s debut will be live-streamed at FacebookTwitch and YouTube.The DC Universe SVOD platform is officially launching Sept. 15, and costs $7.99 monthly or $74.99 annually.

DC Daily pledges to offer DC Universe subscribers an added depth of news content that ties back to the original series, comics and community on the service.

The show will be hosted by a variety of faces familiar to DC fans, with special guests and other co-hosts joining as well. Currently, theformat is scheduled to include ‘Headlines,’ a run-down of daily news briefs; ‘Reports,’ a single-topic segment that may feature an in-depth interview or deep dive into an upcoming book, film or series; and ‘Talk,’ a panel discussion including in-depth analysis about today’s hottest topics and news, which will be available only to DC Universe subscribers.

DC Daily will be filmed and streamed daily from a 2,100 square foot set built especially for the show at a Warner Bros. Digital Networks studio location in Burbank, Calif. The custom-designed sets include original large-format panel artwork of iconic DC characters, as well as plenty of conversational seating, demonstration stations and stand-up viewing areas for hosts, guest commentators and special guests.

 

Fubo TV Adds WarnerMedia’s Turner Networks

Fubo TV, the sports-centric online TV service, Aug. 22 announced the addition of Turner Networks portfolio of pay-TV channels, including TNT, TBS, CNN, Cartoon Network, Adult Swim, truTV, TCM and HLN. The addtions bring to 75 channels available on Fubo for $39.99 monthly.

“Adding Turner Sports’ programming builds upon our heritage in soccer, while expanding our sports offering with more MLB, NBA, PGA and college sports,” Ben Grad, head of content strategy and acquisition at Fubo TV, said in a statement. “Turner’s news, entertainment and kids brands will continue to drive engagement with viewers, while reinforcing our commitment to offering a premium, high-quality cable replacement.”

Turner’s Boomerang and CNN International are also being added to Fubo Extra, the company’s 90-plus channel tier that is now available at $44.99 for the first month. Additionally, CNN en Español has been added to Fubo Latino.

The above channels are all available to be streamed live, with popular programming to be available on-demand in the coming weeks. All fuboTV subscriptions come with 30 hours of personal cloud DVR storage, two simultaneous streams, and the ability to upgrade to 500 hours and three streams, respectively, with no contracts, cords or set-top boxes required.

The service is available on the Web at www.fubo.tv, and via Android and iOS smartphones and tablets, and TV connected devices such as Amazon Fire TV, Android TV, Apple TV, Chromecast and Roku.

WarnerMedia Acquires Full Control of Otter Media

WarnerMedia has assumed control of Otter Media after corporate parent AT&T acquired The Chernin Group’s controlling stake in the joint venture. Financial terms of the deal were not disclosed.

AT&T and former Fox executive Peter Chernin founded Santa Monica, Calif.-based Otter Media in 2014 to develop direct-to-consumer subscription video and advertising business models.

The company claims a global audience of more than 93 million unique monthly consumers, with more than 75 billion video views projected this year. Additionally, Otter Media’s SVOD platforms have more than 2 million paying subscribers.

Otter Media subsidiaries include Ellation, a SVOD service provider with content offerings under the Crunchyroll and VRV brands, as well as digital media company Fullscreen and its Rooster Teeth brand. Otter also has ownership stakes in Gunpowder & Sky studio, as well as Hello Sunshine, a media company founded by Oscar winner Reese Witherspoon.

Otter Media will continue to run by Tony Goncalves, who was named CEO earlier this year. Goncalves reports to WarnerMedia CEO John Stankey.

“Working with Tony, we look to harness Otter’s expertise in feeding the passion of online audiences to augment our portfolio of digital assets and help us further engage, connect and entertain consumers around the globe,” Stankey said in a statement.

“With AT&T’s direct-to-consumer relationships, vast data and varied content, I believe they can accelerate Otter’s growth,” added Chernin. “The combination with WarnerMedia will create a new-era media company, serving customers with every type of content delivered through every possible distribution channel.”

 

Comcast CEO Brian Roberts Punts on Hulu Stake Question

Late in Comcast’s July 26 fiscal call, chairman/CEO Brian Roberts was asked about becoming a minority stake holder in Hulu should Disney’s $71 billion acquisition of 20th Century Fox Film and other Fox assets be approved.

Roberts replied management was not “prepared to address” some issues, which apparently included Hulu, which Comcast co-owns with Fox, Disney and WarnerMedia (formerly Time Warner).

Disney acquiring Fox would give it 60% ownership of Hulu, with Comcast holding 30% and WarnerMedia with 10%.

There’s no love lost between Disney CEO Bob Iger and Roberts when it comes to media mergers.

The two high-profile executives have been embroiled in competing bids to acquire controlling stakes in 20th Century Fox and British satellite TV operator Sky, among other properties.

With Disney planning to launch a branded over-the-top video platform in 2019, scuttlebutt suggests the Mickey Mouse company could hit the ground running incorporating Hulu — with 17 million subscribers — as part of its strategy increasing direct-to-consumer exposure with exclusive content.

Such a move could further undermine Comcast’s legacy cable business, which continues to lose consumers to cord-cutting and OTT video services such as Netflix, Amazon Prime Video — and Hulu.

“We’re focused on Sky now,” Roberts said. “We think it’s a great business, it will fit well, good use of capital. It’s also unique, but I don’t want to say anymore today and hopefully that addressed a number of your issues.”

WarnerMedia Boss Looking for Larger OTT Video Audience

Size matters to WarnerMedia CEO John Stankey. The new boss at the former Time Warner (Turner, HBO and Warner Bros.) wants to bring scale to WarnerMedia’s slate of pending and existing direct-to-consumer platforms.

And that begins with HBO. As has been previously reported, Stankey seeks to up the premium channel’s original content slate through increased spending and year-round releases.

“My goal is to give the HBO team the resources to greenlight additional projects already in the development funnel,” Stankey said on the July 24 fiscal call. “That would keep consumers from jumping in-and-out of [HBO Now]. If we can smooth [program] scheduling, then we drive down churn, improve retention and subscriber growth.”

Second-quarter (ended June 30) operating income at HBO remained essentially flat at $530 million. Growth in revenue was offset by increased expenses, including programming and marketing costs. Programming expenses increased 15% due to higher original and acquired programming costs. The increase in marketing costs was related to original programming. Operating income included $39 million of costs related to the AT&T merger.

AT&T CEO Randall Stephenson said traditional and new-age media companies are all pursuing the same goal of selling directly to consumers.

“The modern media company must develop extensive direct-to-consumer relationships,” he said. “And we think pure wholesale business models for media companies will be really tough to sustain over time. The recent valuations of media companies are reinforcing this point.”

Both Stephenson and Stankey contend bundling WarnerMedia brands is the best way to bring larger audiences to individual OTT platforms. AT&T has about 170 million customers across its various distribution channels, including mobile, satellite, broadband and telecom.

“If you put CNN.com, Otter Media (which AT&T co-owns with The Chernin Group) and Bleacher Report together, there are almost 200 million unique monthly users to each of those sites,” Stephenson said. “This is a scaled direct-to-consumer business.”

The CEO believes that personalizing content and advertising through OTT video will create “unique” consumer experiences.

“It’s pretty exciting,” Stephenson said.

Stankey said that since the close of the $85 billion Time Warner acquisition, corporate has been busy with the “blocking and tackling” that comes with a merger, including integrating corporate and staff functions, and aligning corporate management as part of $2.5 billion in group synergies.

The executive wants to expand audiences for OTT ventures, including HBO Now and recently launched DC Universe platform.

“They’re all good within their own right, [but] they generate what I would consider to be small-scale audiences,” Stankey said. “A company our size, we want to be generating audiences in the tens of millions. Not in the single-digit millions.”

The executive believes WarnerMedia’s strong brands are more powerful when bundled together than as stand-alone properties.

“So, over time we are going to think about how the discreet brands we have [can be unified] into a more consistent, more-focused experience,” he said. “That starts to bring some scale.”

 

WarnerMedia Home Entertainment Ends Q2 with 18.2% Market Share

WarnerMedia (previously Time Warner) July 24 reported select second-quarter results (ended June 30) following its acquisition by AT&T.

Warner Bros. reported operating income of $256 million, up from $225 million operating income during the previous-year period — and excluding $81 million of costs related to the AT&T merger. Revenue increased 11% ($318 million) to $3.3 billion.

Theatrical revenue was essentially flat as the prior-year (2017) quarter included a more favorable mix of home entertainment and theatrical releases, which was offset by higher television licensing revenue of theatrical product in the current-year quarter.

WarnerMedia (Warner Bros., HBO and Turner) no longer reports physical and digital sales of Warner Bros. or HBO original titles. The company said sales of DVD, Blu-ray Disc and digital titles helped home entertainment finish the period with 18.2% market share, No. 2 in the market behind Walt Disney Studios Home Entertainment.

Second-quarter Warner home entertainment releases included Father Figures, Paddington 2, 12 Strong, The 15:17 to Paris, Game Night and Tomb Raider. That compared with Fist Fight, The Lego Batman Movie and CHiPs in the previous-year period.

Paddington 2 has generated packaged-media sales of $3.2 million on 165,000 discs since its April 24 retail release, according to The-Numbers.com.

Current third-quarter packaged-media releases include Rampage (July 17), Ready Player One (July 24), Life of the Party (Aug. 7), Tag (Aug. 28) and Ocean’s 8 (Sept. 11).

HBO Home Entertainment second-quarter releases included Ballers: The Complete Third Season and Vice Principals: The Complete Series. That compared to Veep: The Complete Fifth Season, Silicon Valley: The Complete Third Season, Divorce: The Complete First Season and The Young Pope: The Complete First Season in the previous-year period.

Heading into the 2018-19 television season, Warner Bros. Television is producing more than 75 series across all networks and services, its highest number ever, and is producing 34 shows for the broadcast networks, 23 of which are returning series.

WarnerMedia Boss: HBO Has to Up its Game

NEWS ANALYSIS — The status-quo at HBO apparently isn’t good enough for the new boss at WarnerMedia — AT&T’s corporate shell comprising Turner, Warner Bros. and HBO following its $85 billion acquisition of Time Warner.

The award-winning premium network behind “Game of Thrones,” “Big Little Lies,” and “Westworld,” has to increase “hours of engagement,” John Stankey, who replaced Time Warner CEO Jeff Bewkes at WarnerMedia, reportedly told a company townhall meeting with HBO CEO Richard Plepler last month following the merger.

As reported by the New York Times, Stankey wants HBO programming to become habitual in a consumer market he says is driven by portable devices that capture their attention “every 15 minutes.”

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

Tough words to hear for a signature network that has 40 million domestic subscribers (nearly 150 million globally) and was often lauded by Bewkes (a former boss at HBO) during his fiscal calls.

Specifically, Stankey believes increased consumer interaction with programming will generate data, which he says enables better monetization of content and is “very important to play in tomorrow’s world.”

With HBO spending about $2 billion on original content — a quarter what Netflix is spending — Stankey hinted operating budgets could be increasing.

He said HBO would have to transform from a boutique operation to generating content that has wider appeal.

“We need hours a day,” Stankey said. “It’s not hours a week, and it’s not hours a month. We need hours a day.”

Indeed, HBO Now, the standalone $15 monthly SVOD service, reportedly has about 5 million subscribers — less than 10% of Netflix’s domestic sub base.

Stankey told employees they should be happy AT&T and not another media company such as Fox or Disney acquired Time Warner due to the lack of job overlap. At the same time, he said HBO has to make money at “the end of the day.”

“We do that,” interjected Plepler, according to the Times. “Just not enough,” responded Stankey.

A curious statement, indeed, considering HBO generated about $6 billion in operating profit in 2017.

Plepler deftly diffused the situation saying HBO did as well as it could with the hand it was dealt at Time Warner.

“And we well understand that that is not going to be sustainable going forward,” he said.

Warner Bros. Bowing ‘DC Universe’ SVOD Service

Warner Bros. in August will beta-launch “DC Universe,” a first-of-its kind subscription streaming video service affording access to exclusive content and experiences “not available anywhere else.”

Subscribers will have access to original live-action and animated series, classic TV series and films, a curated selection of digital comic books, breaking news, an expansive DC-centric encyclopedia, social media connections and exclusive merchandise.

Operation of “DC Universe” will be managed by Sam Ades, GM and SVP, Warner Bros. Digital Networks, based in Burbank. Ades formerly served as the SVP, direct-to-consumer, for DC Entertainment, where he was responsible for creating and executing DC’s digital marketing strategy.

The service (dcuniverse.com) will be available in the United States at launch on iOS, Android, Roku, Apple TV, Amazon Fire TV, and Android TV, as well as the Web.

“Developing new ways for consumers to access some of our most popular and iconic brands and franchises as well as exclusive new content whenever they want, on the devices they choose, is one of our studio’s top priorities,” Craig Hunegs, president, Warner Bros. Digital Networks, said in a statement.

With an undisclosed price-point, “DC Universe” was first disclosed last year, and jump-started following AT&T’s $85 billion acquisition of Time Warner (including Warner Bros.). A mandate of the deal is leveraging Warner Bros.’ assets through digital channels.

“We are investing in and creating original, high-quality shows, including the new ‘Titans’ series, and curating the most beloved nostalgic content, while at the same time elevating the comic reading experience to new heights. Nothing this robust has ever been offered to fans before,” said Jim Lee, chief creative officer and publisher, DC Entertainment.

At the heart of “DC Universe” will be an exclusive original live-action and animated series based on DC’s iconic characters. Developed by Warner Bros. Television, “Swamp Thing” and “Doom Patrol” are scheduled to debut in 2019, following live-action adventure series, “Titans,” which premieres later this year. Warner Bros. Animation is also developing a slate of animated TV series based on existing fan favorites, including “Harley Quinn” and the third season of “Young Justice: Outsiders” animated series, which are both scheduled to debut in 2019.

The platform’s launch will also include all four original Supermanmovies, as well as a selection of animated movies, including Justice League: The Flashpoint ParadoxGreen Lantern: First Flight, and Wonder Woman. The service will also feature classic TV shows, including the first two seasons of “Batman: The Animated Series” and the original “Wonder Woman” series available for the first time in HD.

The “DC Universe” comics reader will feature access from a smartphone or tablet to a living room screen. Subs can scroll through their favorite comics. A curated selection of thousands of DC comics will be available to subscribers from a library that includes decades of comics creations.

“We wanted the ‘DC Universe’ comics reader to be a blend of art and technology that would further enhance fan’s experiences of the live-action and animated programming,” said Dan DiDio, publisher, DC Entertainment. “This hand-curated selection … gives fans a thematic digital long-box to carry with them … or lets them watch exclusive video content on a big screen followed by the comic that inspired it.”