HBO may change considerably in the future, as its new owners at AT&T stress the importance of competing with streaming giants like Netflix — including increasing the number of shows the network offers to subscribers.
AT&T is asking HBO to think about ways to produce more shows and increase engagement to compete with Netflix, Hulu, Amazon and other streaming services. This was the mandate from AT&T’s John Stankey in a discussion with HBO CEO Richard Plepler last month in front of an audience of HBO employees, a recording of which was obtained by the New York Times.
Stankey is an AT&T veteran who now oversees HBO as part of his duties as CEO of Warner Media, the new name of the multimedia conglomerate formerly known as Time Warner. AT&T announced its intention to acquire Time Warner, HBO’s parent company, in October 2016, but officially got approval for the merger in June 2018.
Watch time was one of the biggest concerns that Stankey raised. He argued that HBO can’t just rely on a few series to drive viewer engagement on a weekly basis.
“We need hours a day,” Stankey said, according to the New York Times. “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.”
Those devices offer streaming services like Netflix, and platforms like YouTube. There are 450 hours of video uploaded to YouTube every minute, and more than a billion hours of videos watched every day. Netflix subscribers watch 140 million hours of content a day.
Stankey’s remarks were met with concern from Richard Plepler, HBO’s chief executive, who reiterated that HBO has always favored quality over quantity. Giving the makers of shows like Game of Thrones, Westworld and Big Little Lies more time to create award-winning and prestigious television is more important to the network than quantity, Pleper said, though he acknowledged that the company’s business model needed to change.
“I’ve said, ‘More is not better, only better is better,’ because that was the hand we had,” Pleper said to Stankey. “I’ve switched that, now that you’re here, to: ‘More isn’t better, only better is better — but we need a lot more to be even better.’”
A newfound focus on streaming content and increasing engagement with subscribers means AT&T will invest in HBO, Stankey said. More series are likely to be the result, but with an added interest in streaming, there’s a chance that more series and films will be HBO Now exclusives. Polygon has reached out to HBO for more information.
Stankey noted that AT&T’s new strategy means that HBO’s employees should expect to have a “tough year” ahead of them.
“I suspect if we’re in a situation where we’re going to be investing heavier, that means that there’s going to be more work for all of you to do — and you’re going to be working a little bit harder,” Stankey said.
The biggest concern that people involved with HBO seem to have is how this will affect the quality of the networks’ upcoming series. Terms like “ominous” have floated around Twitter to talk about the direction in which Stankey wants to take the network. Others have commented on a concerning quote from Stankey that suggests that AT&T wants HBO to increase engagement so it can collect more data and information about its subscribers. AT&T, at the end of the day, is still a telecommunications company, and using information from HBO to learn more about subscribers is worrying to some.
“I want more hours of engagement,” Stankey said. “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.”
Specific details about what’s next for HBO are still light, but if AT&T wants to invest heavily in content and streaming, more information is likely to be announced in the coming months.