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HBO and Turner Together: The Strategy Behind WarnerMedia’s Anticipated Bob Greenblatt Hire

Last July at an HBO town hall meeting, the pay cabler’s CEO, Richard Plepler, asked newly minted WarnerMedia CEO John Stankey to map out his plans. To the chagrin of Plepler, Stankey didn’t mince words.

“It’s going to be a tough year … you will work very hard, and this next year will — my wife hates it when I say this — feel like childbirth,” Stankey said at the time. “You’ll look back on it and be very fond of it, but it’s not going to feel great while you’re in the middle of it.”

Now that a federal appeals court has rejected the Department of Justice’s challenge to the acquisition of the former Time Warner by AT&T, Stankey has started to induce his plans — and neither Plepler nor Turner president David Levy will be a part of it.

Stankey has made his goal clear from the beginning: Volume. And to that end, he doesn’t believe it makes sense to keep WarnerMedia’s TV outlets in separate silos. HBO has always been its own entity, while Turner continued to operate as its own unit ever after Time Warner acquired the company in 1996.

But that’s about to change, as former NBC Entertainment chairman Bob Greenblatt is expected to take on a large role overseeing both businesses. HBO and Turner had already reported to Stankey, but the AT&T veteran doesn’t have the creative background that Greenblatt has to start operating the two entities in tandem.

One high-ranking agent compared Greenblatt’s job to serving as an “air traffic controller.”

In an age where streamers like Netflix aim to be all things to all people under one centralized structure, rivals are looking to do the same with their disparate brands. AMC Networks, for example, recently placed AMC, BBC America, SundanceTV, and IFC under the oversight of Sarah Barnett. CBS Corp. tapped David Nevins to serve as chief content officer over all of its brands. Viacom has streamlined its reporting structure under four execs, most recently consolidating Comedy Central, Paramount Network and TV Land under Kent Alterman, and MTV Networks with CMT under Chris McCarthy. Even Turner long ago put TNT and TBS under the same roof.

“I don’t think you can just run one of those verticals without having oversight over all the verticals,” he said. “You need to have some consistency across the brands. TNT is doing these shows like ‘The Alienist.’ Why is that not on HBO?”

It has already been clear that Stankey would like to reallocate WarnerMedia’s programming resources, moving more to HBO and some to the company’s new streaming service. That’s perhaps why Turner Entertainment chief creative officer Kevin Reilly was asked to oversee creative for the company’s upcoming direct-to-consumer streaming platform. Reilly and HBO programming president Casey Bloys will now likely both report to Greenblatt, who will be charged with directing which assets will go where.

“It has always made sense to combine all of Warner Bros. and HBO and Turner,” said another insider. “[The] personalities didn’t allow.”

Should Greenblatt take over both HBO and Turner, one challenge he’ll face in merging cultures is geography. While Turner’s L.A. operations are conveniently located next to the Warner Bros. lot, HBO is currently in Santa Monica — and just inked a deal for a new office all the way in Culver City. One observer called the move “isolationist” on the part of HBO. Under Stankey’s new mandate, Greenblatt will have to bridge that gap.

“For those of you who have studied the company over the years, for extraordinary as it’s been, there was an era where it was very profitable for each to go at it essentially in its own lane,” Reilly said earlier this month at Turner’s portion of the Television Critics Association press tour. “There was not a lot of overlap. What we’re finding at this moment in time now, we are a stronger company really going at it together.”

Reilly and his team — which includes former TNT exec Sarah Aubrey, now head of original content for the new service — have been busy developing new programming, some of which is expected to be announced in the coming weeks. HBO, meanwhile, has been busy bulking up its own output, as mandated by Stankey.

“As I step back and think about what’s unique about the brand and where it needs to go, there’s got to be a little more depth to it, there’s got to be more frequent engagement,” Stankey said during last year’s town hall meeting. “I do believe there needs to be stepped-up investment.”

At first that threw off Plepler and Bloys, both of whom had been touting HBO’s carefully curated content as a source of pride and distinction vs. Netflix’s catchall strategy.

“If you have 50 kids, you’re not going to every soccer game,” HBO programming president Casey Bloys told the Wall Street Journal last year. “We go to every soccer game, and we’re the snack parents at every soccer game. That’s how we treat our talent.”

But at the same time, Plepler and Bloys had already been increasing HBO’s output; in 2019, that means about 50 percent more in terms of hours. Now, with WarnerMedia’s networks (except its 50 percent stake in The CW) all under one creative oversight, expect resources to further shift — and that number to jump even more.

Of course, that all leads to the question of what happens to the Turner networks. CNN (and sister HLN) and Cartoon Network (with sister Adult Swim) still have unique positions inside WarnerMedia, targeting unique audiences for the company. But that leaves question marks for TNT, TBS, and truTV, all of which develop programs in many of the same lanes as HBO and the new streaming outlet.

In the short run, WarnerMedia won’t want to mess too much with the networks, which still churn out a lot of cash thanks to subscriber fees and advertising rates.

“If you’re them, you’re thinking not what this looks like next year, but what does this look like in seven years,” said one WarnerMedia insider. “[But] how do you manage these businesses that are decidedly part of packages that are systemically bleeding? It’s not an easy thing. You want to invest in the future but don’t spoil the EBIDTA. $5 billion is a lot of money.”

TNT could very well zoom in on sports, which drives a chunk of its viewing — and in a sense return to its roots (and Ted Turner’s original vision for the network) as the home for big event, often live, programming. (However, they’ll have to do that without Levy, who had been the key to TNT’s NBA relationship.) TBS might continue to zoom in on comedy, while truTV focuses on the kind of small, buzzy shows that do well in a second life on WarnerMedia’s streaming service.

Long term, those Turner linear networks may continue to exist — but they could be the off-net window for programming that first appears on WarnerMedia’s flagship HBO and streaming services.

“This is the first step in an evolution,” Reilly said at TCA. “How these things cycle through these different platforms is going to be redefined a little bit. As you know, the media system is reconstituting.”

The linear world, he added, may still be profitable, but it has “reached maturity. You see the direction of the linear world but at the end of it, TBS and TNT and our small cluster of Turner brands will be amongst the ones left standing. How they work hand in glove with this last part of the loop, our own OTT service, is where I think it really opens up new possibilities.”

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