AT&T had to part with a staggering $85 Billion to buy Time Warner, which houses one of its best performing television production powerhouses HBO. Prior to this purchase, the US government had shown immense determination to stop the deal. Eventually the government would throw in the towel leaving AT&T to close the high profile deal.
As the new proud owners of HBO, AT&T is already facing their first challenge after HBO’s CEO Richard Plepler announced that he will be stepping down from the top seat early this month. The word surrounding these developments is that the resignation was prompted by an issue revolving around autonomy. Plepler had immense interest to run HBO. However, WarnerMedia CEO, John Stankey was already doing a good job running HBO.
Plepler’s ideas about the future of HBO lacked compatibility with Stankey’s vision, as it was said by a person who had more insight into the matter. It was further said that both of them did not share what can be described as a cordial relationship. Plepler hasn’t figured out his next move yet, but he is much interested in the kind of opportunities that would grant him autonomy in his role.
Under Plepler’s stewardship, HBO made great strides. It introduced the overwhelmingly accepted “Game of Thrones” as well as ‘’Veep”. These incredible shows resonated well with the audience, turning in a massive profit of around $2 billion for Time Warner in the process. Although Plepler had his own ideas of growing HBO that leaned more towards tapping into technologically driven services, John Stankey announced that the firm would be introducing a new streaming service under the WarnerMedia, which is the new name of the firm after the merger. The said streaming service would combine content from Warner Bros studios, HBO and the Turner division of cable networks. This was a clear indication that HBO has a lesser role in Stankeys model.
Robert Greenbalt, who worked before as the chairman of NBC was put at the helm of HBO, the streaming business, as well as Turner entertainment networks on March 4th. This further prompted the resignation of David Levy, who was successful as the boss of Turner. His resignation came just a day after Plepler’s.
Warner Media is set to test the waters in the competitive video streaming business before the end of this year. It will be competing against Netflix which is well established given that it boasts over 130 million subscribers across the globe. Moreover, Disney and Apple are said to be joining the streaming business sometime this year. HBO has over 35 million viewers who will be crucial to its streaming product.
Without a doubt, AT&T is showing enormous ambition considering the changes that have taken place and its intentions to tap into streaming. However, HBO viewers are familiar to certain type of content; therefore, it may prove to be too much of a gamble to launch a streaming service that will bring different types of diverse content that may end up confusing the viewer. More so, the new content may tend to dilute the acclaimed unique content that HBO has been offering to its viewers.
A lot of work will be required to put everything in motion and strike the right balance. As much as AT&T has been successful at different stages, there has been brilliant people behind HBO like Plepler, who will no longer be there to contribute and offer more insight for the way forward. Having held several roles at HBO previously, one as the Co-president from 2007 and the other one as the chief executive from the year 2013, Plepler’s wealth of experience cannot be ignored. His stints at HBO were deemed as successful.
The question that now remains is whether the new owners and team will be able to steer HBO in the right direction. John Stankey is definitely experienced but now the firm is geared towards another direction; it will soon be treading on unfamiliar ground, especially with the much anticipated streaming services. According to Mr David Simon, the creator of “The Wire” which was one of the most watched television series on HBO, everyone will be hoping that they will figure out a way to get what they need in terms of quality and quantity production, which will not negatively interfere with high bar that has been set by HBO in the past.