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WarnerMedia Chief: HBO Will Boost Volume of Original Programming to Combat Churn

AT&T leaders have been promising for months to increase content spending at HBO to give it a boost in the premium content wars. That money is finally starting to flow into HBO’s coffers in order to greenlight projects that have long been in development, according to WarnerMedia CEO John Stankey.

Speaking on AT&T’s second-quarter earnings call Tuesday — AT&T’s first earnings since closing its acquisition of Time Warner last month — Stankey said the goal was to give HBO more programming to drive more subscriber engagement and reduce churn. He noted that data mined from HBO’s digital platforms indicates that some viewers drop in and out of their subscription to HBO depending on the shows are airing fresh episodes at any given time.

“We have a tremendous amount of great projects already in the funnel,” Stankey said. “They’ve not been in a position to say yes to because of constraints on certain resources. We’re attempting to open up those constraints on high-quality top projects.” The goal is to “balance out the schedule in way that creates a more engaging consumer experience over the course of the year,” he said.

Stankey was asked during the call with Wall Street analysts about a New York Times report earlier this month that AT&T would push HBO to reach for a broader audience and change its programming mix — based on Stankey’s comments from a private town hall session with HBO employees that the Times obtained. Stankey said the report had not “effectively characterized what we are about,” but he did not elaborate.

Stankey did not give a round number for the increased content spending at HBO. He assured the analysts that they would pursue “a very responsible investment” in more shows at a time when HBO faces a huge increase in competition from Netflix, Amazon and a host of other new players in the premium content arena.

The team at HBO “feels comfortable that we can flex up on development in a way that rounds out the schedule very nicely,” Stankey said. 

Stankey and AT&T chairman-CEO Randall Stephenson emphasized AT&T’s vision of harnessing the appeal of HBO and other WarnerMedia brands under a broad umbrella of a direct-to-consumer streaming offering that takes advantage of AT&T’s wireless network. AT&T has some 170 million customer relationships around the world that should be a strong platform for WarnerMedia’s HBO, Turner, and Warner Bros.

Stankey said in considering the future for WarnerMedia brands, the operating principle is “it’s better together.”

“There are a lot of very strong brands in the family that generate interest on a standalone basis but are not as powerful as they are when brought together,” he said.

(Pictured: John Stankey)

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