HBO is like Tiffany at Walmart from Netflix – Variety

Netflix is ​​like the Walmart of the subscription video – while HBO is Tiffany & Co., according to Randall Stephenson, President and CEO of AT & T.

Stephenson also said that AT & T was looking to launch a new direct sales model for WarnerMedia (the former Time Warner), based on the Warner Bros. content library. and including content from HBO and Turner Sports. The company plans to reveal more details about the new direct-to-consumer plans in the fourth quarter of 2018, he said at the Goldman Sachs Communacopia conference in New York.

WarnerMedia's new direct consumer business initiative, led by CEO John Stankey, "will bring all of AT & T's strengths," said Stephenson.

AT & T's boss has suggested that HBO is the jewel in the WarnerMedia lineup – literally, equating the premium programmer with the jewelry and luxury goods retailer Tiffany. "HBO is a very unique brand," said Stephenson. "I mean what I said, it's Tiffany's media and entertainment."

Observers immediately pointed out that Walmart, with a business turnover of $ 486 billion last year, is 100 times more massive than the upscale Tiffany & Co., which has registered a number of dollars. $ 4.2 billion business in 2017. Walmart VOD subscription service.

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Of course, Stephenson meant that HBO is the cream of the original programming, not necessarily that it's a much smaller company than Netflix, even if that's what its explicit analogy is.

Stephenson said that AT & T would "invest" in the content of HBO, which spends about $ 2 billion a year in content. However, he added, "we are not talking about Netflix investments".

WarnerMedia CEO Stankey and HBO Channel Chief Richard Plepler were asked to increase HBO's content production "to ensure a more robust content cycle throughout the year. all week long".

According to Stephenson, HBO needs a "full range and schedule". For example, he said, subscribers subscribe to HBO to watch "Game of Thrones" and then leave at the end of the season. The new content strategy for HBO is "more about filling the schedule," said Stephenson.

Asked about the Justice Department's appeal for the antitrust decision that gave AT & T the go-ahead to take control of Time Warner, Stephenson pointed out that the burden of proof lay with the DOJ to demonstrate that the judge

"We feel very good where we are on appeal. The agreement is closed. The integration is going very well, "said Stephenson. "The teams do not put any effort into the call," he added, although he said the Justice Department's litigation was a distraction. The head of AT & T said that he expects that the call of the Justice Department in the case will end in January or February 2019.

AT & T's entertainment group, which includes DirecTV and broadband, is declining due to subscriber losses on satellite television, according to Stephenson. In July, AT & T raised the price of DirecTV Now's broadcast plans by $ 5 a month, and so far in the third quarter, "we have not seen the deterioration in subscribers we think," said Stephenson.

By 2019, WarnerMedia's revenue should grow with AT & T's, Stephenson said. If the AT & T entertainment group is at least flat, he said that even at this "low watermark", the company will have comfortable cash levels to repay the accumulated debt through the agreement Time Warner.

Stephenson said WarnerMedia could still eliminate large overheads. These are functions that can be integrated into HBO, Turner and Warner Bros. in areas such as supply, finance and accounting, said the CEO of AT & T.

"We told Stankey, you take that and redeploy it in media and entertainment content," Stephenson said.