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07:22 PST 01/27/2021
by
Etan Vlessing
“It was a bold and aggressive swing,” Stankey told analysts after the telecommunications and media giant chose to move its legacy theatrical business to the streaming space with HBO Max.
AT&T Inc. CEO John Stankey has defended the steps the telecommunications and media giant is taking to move its legacy theatrical business to the streaming space with HBO Max amid the pandemic.
“It was a bold and aggressive swing; it was done with a lot of thought into what needed to be done in the subscriber space and the balance of the value of our franchises between our film and streaming business,” Stankey told analysts on a morning call. following the release of AT&T fourth quarter financial results.
In December 2020, Warner Bros. and WarnerMedia announced that they would seriously disrupt the theatrical window and send the entire list of 17 2021 images to the HBO Max streaming service, debuting the same day they open in cinemas that could admit customers. , allowing pandemic lockouts. Stankey reiterated that WarnerMedia’s focus has been on HBO Max, as market conditions through 2021 dictate future distribution plans.
“I would say the data points have arrived and have been very consistent with the set of assumptions we had ahead of this,” he added, pointing to rival studios following the lead. from his studio and moving their own tentpole versions to later in 2021 and 2022.
Stankey predicted a “very crowded theatrical field” for the end of 2021 and the beginning of 2022, which, he added, would likely not significantly increase the number of consumers flocking to the local multiplex. Ahead of this long recovery forecast for theatrical business, AT&T, as part of its fourth quarter results, recorded approximately $ 780 million in depreciation charges for its production and other content inventory at WarnerMedia, including $ 520 million resulting from the continued closure of theaters during the pandemic. and the hybrid distribution model for the studio’s 2021 film slate.
“As we indicated on delisting, we felt like we had a little mess asset here that needed to be moved and used more efficiently, and that was the right economic call,” Stankey said. He added that the decision to minimize bad box office returns and build the HBO Max subscriber base during the pandemic “allows us to have options in our cast and use this set of unfortunate circumstances around the pandemic for an opportunity to make lemonade from lemons was the right call in this case. “
Stankey also appeared to talk about the reaction from movie theater owners, Hollywood directors, and top talent to seeing movies originally intended for theaters suddenly appearing in the streaming space. “There were some things on the sidelines that we might do a little differently, but at the end of the day it’s going to come down to making sure people are paid fairly and treated well and I think we know how to do it. that, ”he argued.
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