AT&T Wants To Overhaul HBO, Says It Isn't Profitable Enough (arstechnica.com) 290
AT&T recently acquired HBO, as part of the Time Warner acquisition, "and it is already considering an overhaul that would see HBO produce more video that can compete for the attention of smartphone users," reports Ars Technica. "AT&T wants to boost revenue both in advertising and subscriptions, even if that means upending HBO's longtime strategy of producing a relatively small number of high-quality shows."
At a recent corporate town hall meeting, John Stankey, the longtime AT&T executive and new head of Warner Media, laid out the challenges and opportunities he saw for the network to around 150 employees. He said, in part: "It's going to be a tough year. It's going to be a lot of work to alter and change direction a little bit. [...] You will work very hard, and this next year will -- my wife hates it when I say this -- feel like childbirth... 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. She says, 'What do you know about this?' I just observe, 'Honey. We love our kids.'" Audio of the meeting was obtained by The New York Times. From the report: The talk, held at HBO headquarters in New York City, was hosted by HBO CEO Richard Plepler. HBO must compete with smartphones for people's attention, Stankey said in this exchange with Plepler: "We need hours a day," Mr. Stankey said, referring to the time viewers spend watching HBO programs. "It's not hours a week, and it's not hours a month. We need hours a day. You are competing with devices that sit in people's hands that capture their attention every 15 minutes." Continuing the theme, he added: "I want more hours of engagement. Why are more hours of engagement important? Because you get more data and information about a customer that then allows you to do things like monetize through alternate models of advertising as well as subscriptions, which I think is very important to play in tomorrow's world."
At a recent corporate town hall meeting, John Stankey, the longtime AT&T executive and new head of Warner Media, laid out the challenges and opportunities he saw for the network to around 150 employees. He said, in part: "It's going to be a tough year. It's going to be a lot of work to alter and change direction a little bit. [...] You will work very hard, and this next year will -- my wife hates it when I say this -- feel like childbirth... 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. She says, 'What do you know about this?' I just observe, 'Honey. We love our kids.'" Audio of the meeting was obtained by The New York Times. From the report: The talk, held at HBO headquarters in New York City, was hosted by HBO CEO Richard Plepler. HBO must compete with smartphones for people's attention, Stankey said in this exchange with Plepler: "We need hours a day," Mr. Stankey said, referring to the time viewers spend watching HBO programs. "It's not hours a week, and it's not hours a month. We need hours a day. You are competing with devices that sit in people's hands that capture their attention every 15 minutes." Continuing the theme, he added: "I want more hours of engagement. Why are more hours of engagement important? Because you get more data and information about a customer that then allows you to do things like monetize through alternate models of advertising as well as subscriptions, which I think is very important to play in tomorrow's world."
If it ain't broke, fix it (Score:5, Insightful)
sigh!
Re:If it ain't broke, fix it (Score:5, Informative)
$4 billion profit on $2 billion investment per year isn't profitable enough?
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Re:If it ain't broke, fix it (Score:5, Insightful)
Acquisition was $80 billion... AT&T overpaid by $20 billion so it's got to get the money from somewhere I guess
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Re:If it ain't broke, fix it (Score:5, Insightful)
But AOL ran its properties like silos and was crippled by lack of innovation or vision. Synergy to them was a few extra AOL keywords on some of its properties. This was a company so far up its own ass that it would run protracted marketing studies just to decide whether the fat AOL client should have 6 or 8 bookmark slots and relative support call costs from each.
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well no - that pays for the acquisition cost - what's needed now is new revenue...
You never need to pay for acquisition. Unless you destroy the companies you buy, they pay for themselves in that it makes your company's net worth increase by what you paid.
The only point you would need to pay for it, is if you mess it up, and end up writing it off, but that is pretty rare.
Re:If it ain't broke, fix it (Score:5, Insightful)
The purchased company always pays for the acquisition nowadays, and the sooner the better.
A common strategy is to have the company you just purchased take out a bunch of debt in order to pay you back for the honor of being owned by you. They are then responsible for paying the debt back, while you walk off to the bank with your profit up front.
Re:If it ain't broke, fix it (Score:5, Insightful)
Yeah, it only has 30% of households in the US as subscribers (via teh AT&T CEO), which isn't enough. Also, just selling a product isn't enough. You need hours of engagement per day so you can collect data and deliver targeted advertisements. If there was a way to short just HBO, I'd do it in a heartbeat. It's going to lose a lot of money overspending for six years or so, and in doing so lose it's current subscriber base
Figure it gets broken out in a firesale to Disney/Comcast in 2025.
Re:If it ain't broke, fix it (Score:4, Funny)
...in doing so lose it's current subscriber base
They'll never lose me. As long as they have John Oliver and Game of Thrones, I'll continue to pirate their shows faithfully.
Re:If it ain't broke, fix it (Score:5, Insightful)
Well, they're talking about "broadening their viewership" So goodbye John Oliver. And Game of Thrones is too expensive if you need to produce several hours a day.
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It's going to lose a lot of money overspending for six years or so
I'm not sure about that. I'm more worried they're going to cut back spending on shows that make HBO worthwhile. They're going to destroy the brand chasing a fad du jour marketing metric.
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Re:If it ain't broke, fix it (Score:4, Insightful)
They need to change something to make their own salaries worthwhile. No one gets bonuses for doing the exact same thing their predecessor has done.
Here comes president Camacho (Score:5, Funny)
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I heard they were in talks with Pewdiepie to get him on HBO
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We laugh, but based on the idiotic statements from Mr Stankey referenced in the excerpt above, I'd say we have pretty good odds of something like this show. I've heard pretty stupid things from executives before, but Mr Stankey is a cut above on the moron scale.
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In all fairness, the second season of "OW! MY BALLS!" was pretty good. It won six Emmys that year.
God damnit AT&T. (Score:5, Insightful)
Overhaul your fucking network first. How come you can't provide more than 1 megabit of upload bandwidth even in the middle of the most densely-populated and theoretically profitable areas in the US? South Korea has 100 megabit synchronous fiber connections running to houses with dirt fucking floors! What the fuck is wrong with you assholes?
Re:God damnit AT&T. (Score:5, Interesting)
uploading is just for those evil pirates and server admins. good little consumers only CONSUME pre approved content.
you're not being a good little consumer. a note has been made in your account.
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Oh they could do that. If they wanted to. But why would they provide quality, when profitability is what they're really after.
And why would they care that you're complaining? What are you going to do? Jump ship to TimeWarner Cable? HA! That's a laugh. (They were already bought out by Charter two years ago).
Re:God damnit AT&T. (Score:5, Interesting)
Their service is great where they have competition. Speedtest.net just now showed 679 Mbps down and 776Mbps up on my advertised gigabit ($70/month) from AT&T in a neighborhood with multiple providers offering >100Mbps service
Re: God damnit AT&T. (Score:5, Informative)
I don't understand your gripe. Your mother clearly lives in a place that isn't densely populated. They aren't going to spend a half million in infrastructure to make mom happy.
They sure as all hell have taken hundreds of millions of dollars in USF, CAF, USDA RUS, and myriad state-level incentives on the "we'll install broadband next year" promise for twenty straight "next years".
Comment removed (Score:4, Informative)
Comment removed (Score:5, Informative)
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I suffered for many years in rural California on dial up (24.4 on a good day) with a fiber optic backbone line running right under my very street. I tried every trick I could with satellite being my only alternative option. Eventually a two way microwave on the roof solution was affordable, but terrible compared to what people can get in town in both price and bandwidth. My neighbors didn't care. We were ten miles from a medium city.
People don't get this. I used to be a Republican because I advocated for sm
Re: God damnit AT&T. (Score:5, Informative)
You were doing so well until the nonsense about Nazis. I really don't get the American ignorance about Socialism, I really don't.
Educate yourself:
https://www.indy100.com/articl... [indy100.com]
https://www.snopes.com/news/20... [snopes.com]
http://www.newsweek.com/nazis-... [newsweek.com]
It's really not that hard.
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How did you solve the last mile problem?
That's the biggest barrier to entering the broadband market. You have to make a huge investment in infrastructure, up against an incumbent who already has their infrastructure paid off. Sure there are laws that stop you installing new cables sometimes, but even if they went away it wouldn't really change the economics of having to build a brand new network by very much.
The solution is for the government to force the existing networks to open up so you can use their la
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Do you build your own infrastructure or do you use AT&T's (or some one else's) like Sonic ( http://www.latimes.com/busines... [latimes.com] ) does? I ask because given the huge costs for a small company in hooking up a hundred square mile region I feel it's quite likely that you use some other company's infrastructure that's only available to you because the FCC forces companies like AT&T to do so. If that's the case then your whole anti government post sort of falls apart.
Quick translation guide (Score:5, Insightful)
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. - if you don't get fired or quit, you get a gold star for making it through!
She says, 'What do you know about this?' I just observe, 'Honey. We love our kids. - The kids are going to feel pain and stress to toughen them up and be ready for anything in the real world!
(I wish the existing employees luck. Things were already insanely busy at HBO.)
Re:Quick translation guide (Score:5, Insightful)
Yeah, this is a bonehead move. Anyone with talent is just going to pick up and leave to new, innovative competitors like Netflix. Or Amazon. Or Google. Or anyone else not run by some sluggish vertical monopoly willing fuck up a sure thing.
HBO's properties will wither and die if mismanaged but there's no shortage of good companies willing to pay to crank out good content.
Re:Quick translation guide (Score:5, Insightful)
Re:Quick translation guide (Score:5, Insightful)
I've heard these speeches before. They often proceed layoffs the second year.
So the company works you to death (in our case literally for one person and non-fatal heart attacks for five others plus the one unconscious contractor who we never found out what happened) and to divorce (a half dozen divorces) and *then* laid 95% of the staff off .
HBO is going to suck terribly.
It's like corporations have gone in sane and are taking hatchets to their own golden gooses.
Re: Quick translation guide (Score:5, Insightful)
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Good news for Apple's new streaming TV service, for sure.
I wish them luck (Score:2)
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This is a fancy way to say layoffs (Score:5, Insightful)
This was another good reason to oppose the Trump tax cuts. The mega-corps already said the money was all going to mergers and stock buybacks. The sort of thing that doesn't create jobs, it destroys them. Heck, it's easy to see why supply side economics fail. Businesses spend money to meet demand. Giving businesses more money does just that, gives them more money. Unless there's more demand they're just going to keep it. And if there's more demand they'll spend the money anyway. Yeah, there's a point where kleptocracy can kick in and choke a business, but you'd be surprised how far up that goes. Meanwhile the working class is choked with low wages and demand for everything is flat. Flat demand, flat job and wage growth.
Re:This is a fancy way to say layoffs (Score:5, Insightful)
I doubt there will be any layoffs. AT&T announced at the meeting they don't have people to do the jobs and there wouldn't be layoffs. But it's worse than that. They're trying to turn HBO from a boutique content provider to one that supplies "hours of engagement a day" to a "broadened audience" and "provides data and [opportunities] for targeted advertising." So they're gonna kill the golden goose because they don't know what they bought, and turn it into an also-ran cable channel with 90% trash.
Ever been through a round of layoffs? (Score:2)
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Oh, I agree in general. However, they're going to be so busy ruining HBO, they'll need all the bodies they can get. That part rings true, at least for now.
Re:This is a fancy way to say layoffs (Score:4, Insightful)
I doubt there will be any layoffs. AT&T announced at the meeting they don't have people to do the jobs and there wouldn't be layoffs.
Oh, you sweet summer child.
He said, in part: "It's going to be a tough year. It's going to be a lot of work to alter and change direction a little bit.
Company execs talk in code during big company meetings. This is code for "start looking for a new job".
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Sounds like Mr Stankey's big idea is to be like Netflix. By the time they figure out how to do that, Netflix will be 10 years ahead of them. He's chasing the past not looking toward the future. Seriously, how do people this dumb get to be executives?
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I've been here before from another industry! In my case we were already working extremely lean but we were extremely profitable. However, a larger industry that we essentially "work for" bought us out as they expanded their business. They liked we worked lean they said. A couple of years after the buyout we were lumped into a group of similar (but not really) focused companies. Being the only profitable business out of the 4 we propped the other businesses up and still made profit for the whole group (over
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Listen sweetcheeks - Megamergers aren't good or bad - they ARE.
Thus talked the pseudo-conservative who wouldn't be able to distinguish his Russell Kirk from his Eric Voegelin from his G. K. Chesterton.
Here, little fake-conservative, read some real ones for a change, will you? You may begin with Hilaire Belloc [archive.org] and proceed from there.
Well, goodbye to that (Score:5, Insightful)
"We need hours a day," Mr. Stankey said, referring to the time viewers spend watching HBO programs.
So long, The Wire, The Sopranos, Game of Thrones, Deadwood ... you know, stuff that actually took time, care, and focus to produce. On the other hand, I still have to catch up on most of these series anyway.
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So long, The Wire, The Sopranos, Game of Thrones, Deadwood ... you know, stuff that actually took time, care, and focus to produce. On the other hand, I still have to catch up on most of these series anyway.
Isn't that the target market? The people who, when they do get an hour or two off from the wife and kids they're willing and able to pay good money for some quality entertainment. Sure, hours a day you can get with any junk reality show or YouTube video, they cost almost nothing. But they're also worth almost nothing exactly because there's thousands of hours of filler like that. Unless you have some crazy viral video but that's just the online community's random whim of the day. Nothing made Gangnam Style
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HBO is just returning to their roots. The 1980s, when HBO stood for "Hey, Beastmaster's on!"
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"We need hours a day," Mr. Stankey said, referring to the time viewers spend watching HBO programs.
Guess ATT should have bought YouTube. Oh wait...
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Other than GoT all those series finished up years ago.
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Were you expecting him to predict what HBO would've produced in 2020 if it wasn't for this merger?
In other words... (Score:5, Insightful)
AT&T have decided to ruin one of the most successful brands in entertainment.
Right now, HBO competes and holds its own against Netflix and Amazon, both of which continue to invest and profit st their expense. Rather than compete, HBO plans to cede this ground, kill the goose laying the golden eggs, and bet it all on a strategy that takes them out if a market they excel at and run head first into one they donâ(TM)t understand and are ill equipped to compete in.
Thereâ(TM)s not a âoeplan Bâ here - once todayâ(TM)s creators abandon the HBO platform (which theyâ(TM)ll do in a heartbeat), thereâ(TM)s no going back if they change their minds later.
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Actually, I think there is. As it is now, HBO is *giving* all that market away to .. shall we say, grey market sites, (at best.) If HBO dedicated some time and effort to capturing those eyeballs for themselves, there might well be many opportunities to monitize it that are being overlooked.
But I expect AT&T to just FUBAR it anyhow.
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Actually, I think there is. As it is now, HBO is *giving* all that market away to .. shall we say, grey market sites, (at best.) If HBO dedicated some time and effort to capturing those eyeballs for themselves, there might well be many opportunities to monitize it that are being overlooked.
But I expect AT&T to just FUBAR it anyhow.
Getting ready to drop HBO in 3..2..
Re: In other words... (Score:2)
My smartphone keyboard does "just fine" with straight quotes.
Where in the Internet Bible does it say ... (Score:2)
There shall be infinite number of eyeball hours to see everything everyone can produce?
There is more to life.
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There is more to life.
You know you could keep the TV on, cut the sound, while you go outside for some outdoor activities. That will make HBO happy.
Pepperidge Farm Remembers (Score:4, Insightful)
Remember those sweet, warm New England summers? Remember sipping lemonade underneath a shady tree? Remember when if your company turned a profit you had a big Christmas party at the office?
If your company makes money, you've won the game, good job. If it's not enough money, then you suffer from a mental disorder. Best thing to do is commit yourself. Second best thing is to start a second business and combine the profits from both.
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Wallstreet doesn't care about being profitable. It's all about being more profitable (or less unprofitable) than last quarter so that the stock price will go up.
Abort (Score:2, Offtopic)
this is why Roe V Wade is so essential,
John Stankey needs to be aborted.
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this is why Roe V Wade is so essential,
John Stankey needs to be aborted.
Marty McFly should've made himself more useful back in the 1950s!
AT&T is such a shitty company (Score:2)
Bright Side: (Score:4, Funny)
AT&T saving people $10-15 a month as they cancel subscriptions for the once great network.
Interesting, sparks will fly indeed (Score:5, Insightful)
I guess this is what happens when a communications executive takes over a bunch of creatives. I live near NYC and it's nothing like LA, but the entertainment work scene here is pretty much the opposite of AT&T. It's not quite Don Draper 3-martini lunches but former colleagues of mine who now work in that business say it's pretty close. People are creative and used to having a fair amount of freedom around the way they get the job done.
When a creative company gets acquired by someone who just wants to squeeze it for all it's worth, they'll probably lose some of their better creative talent...those folks have options. AT&T is used to providing a cheap-to-deploy, incredibly high margin service. Once they start cracking the whip, the content quality is going to drop. I imagine the first thing they'll do is offshore every business process that isn't outsourced already. When that doesn't produce the savings, they're going to start cutting into the creatives' budget. No more personal assistants, free car service, free food, expense account dinners, etc.
a years from now... (Score:2)
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instagram. they even switched their videos to be tallscreen instead of wide
Kiss of goodbye (Score:4, Interesting)
> "and it is already considering an overhaul that would see HBO produce more video that can compete for the attention of smartphone users, even if that means upending HBO's longtime strategy of producing a relatively small number of high-quality shows."
Well, I guess you can kiss HBO goodbye, then. Because that is the ONLY thing that makes it worth having; things like Westworld, Sopranos, Oz, Game of Thrones, Room 104, and such. PLENTY of other networks for the type of lower quality, high quantity stuff.
If you want to get rid of something, please make it Bill Maher.
Hint: Dumping porn a bad start (Score:5, Interesting)
In the HBO Go app (the one you can use to subscribe to HBO a month at a time), they just dropped the whole "late night" (read: Soft Porn) section. But it's hardly a loss as for some time now they had let updates to that area languish to almost nothing. I have to imagine that subscribers are falling off in part because of that...
What happened to the HBO of old that had sex positive and fun programming like "Real Sex"? Seems like everyone wants to be Netflix now with hot original dramatic shows, while abandoning aspects that make each service unique and provide extra value.
The funny thing is that personally I only just started subscribing to HBO, for Game of Thrones, then Silicon Valley, then Westworld. But once I finish up those new seasons I'll probably let the subscription go again as not much of the other content really grabs me. Some more high-end adult content produced with some regularity might help convince me to stay...
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HBO is pretty good about producing new shows, so that as X ends, Y is there and replaces it, etc.
AT&T will slaughter that Golden Goose (Score:5, Insightful)
Did anyone not expect this? A cellular company bought HBO and their first thought is episodes are too long and everyone wants to watch them on their phone. Oh and they want to add advertising, forgetting of course that most of HBO's subscribers do so because it DOESN'T have advertising.
They'll kill HBO with these plans before they ever evolve them to compete with Netflix. AT&T will slaughter the goose.
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Copying Youtube's business model won't work (Score:2)
" We need hours a day." (Score:3, Insightful)
May I ask just how and when a population already struggling just to stay afloat will find those hours and the money to pay for them while they're working multiple jobs?
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It’s all the obese layabout welfare -abusers- that will be watching this content.
Sorry, child. You too will lose your job to automation and AI, and won't have any alternative because all jobs up to your IQ level will have been automated away before you ever had the chance to try doing them. When that happens, just do as all the people whose IQ levels are below AI and become a beggar. It's what you'll deserve for "choosing" to not increase your IQ at the pace required by automation.
asinine (Score:2)
Weird to get an upfront "We're tanking" message (Score:5, Insightful)
I'm more used to corporations doing a more subtle bait and switch game where they grow their popularity with quality products and then try and cut costs as subtly as possible. Outsourcing to China, using cheaper meat, getting rid of what their warranty covers.
Having a CEO just come out and say "We're going to send this channel straight into the shitter" right to our face is just a weird amount of honesty. I mean, they coach it in positive terms as PR people are ought to do. But even they acknowledge it's going to be painful.
HBO targeting PHONE audiences. So.... Westworld, but cut down to 6 second VINE clips. Season 10 of Game of Thrones will be flash animation with 3 characters remaining after the killing of the rest. And it won't be the expensive ones.
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This was an internal employee town hall meeting. Someone saw the writing on the wall, recorded the meeting and provided it to the press to see if they can get enough momentum to turn the tide against this change.
They'll fail of course, but it's a noble effort nonetheless.
How to make a profit with TV (Score:2)
Consider what a computer can design into the look and feel of a series.
Find out what your audience will become interested in and return to watch due to its creative production.
Vampires? That like humans as new best friends.
A saga about people will billions of US $. To look after, spend, protect and enjoy. Who also want to make new friends
Pirates with ships, maps and treasure.
A hospital with amazing doctors. Re
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So turn HBO into TBS. What could go wrong?
Okay. Who gets the epidural? (Score:2)
... more video that can compete for the attention of smartphone users, ... AT&T wants to boost revenue both in advertising and subscriptions, ... upending HBO's longtime strategy of producing a relatively small number of high-quality shows.
So a lot of pain, yelling and pooping? Sounds *wonderful*.
Next, they'll rename the network. (Score:2)
HBO must compete with smartphones for people's attention, ...
PBO - Phone Box Office.
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I think you mean PCB for Phone Click Bait, which seems to be what they are calling for. That's basically all people watch on phones anyway. I'd never watch Westworld on a phone.
An MBA's work is never finished. (Score:2)
John Stankey is an MBA who was in charge of DirectTV over the last couple of years while it's been hemorrhaging customers. He introduced the DirectTV Now streaming service which was supposed to boost profits. So far, it's only helped to offset the number of subscribers lost. Unfortunately, since it's a lower cost service, their profits have tanked.
Now they've acquired HBO and they want to make it cell-phone-friendly by cutting episodes to 20 minutes in the idiotic hope that doing the same thing will prod
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I'm surprised he didn't just say "we need to work smarter, not harder. Well, smarter and harder until I get my bonus. Then screw you all."
What's the new company called? (Score:5, Interesting)
So, all the good talent is leaving for a new internet-only production company that will take most of HBO's market share? Cool.
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Netflix... (Score:5, Interesting)
Netflix has to be just loving this. AT&T will turn one of the only remaining traditional TV stations into complete and utter shit. Well, at least it will have plenty of company. Meanwhile watch how subscribers run for the hills as the price goes up and the quality goes down.
AT&T has always been run as a monopoly. They haven't the faintest idea about customer service and now they are going to be in for a very rude awakening. RIP HBO.
Hours a day? (Score:3, Interesting)
YouTube (Score:2)
HBO is doomed (Score:2)
Welp. (Score:2)
There goes any value in HBO.
They'll need a new name (Score:2)
I'm thinking a simple addition to reflect the new corporate reality for employees: H O BO.
Surprised? Me? Nah... (Score:3)
Considering massive the 85.4 billion USD price they had to pay for the whole lot it's kind of obvious that getting parts of Time Warner, particularly HBO, to become drastically more profitable was what was not just plain greed, it was a necessity for the deal to make fiscal sense. You simply don't borrow 85 billion without paying a lot of interest every year or big amortizations.
As an HBO subscriber it seems like this is probably the right time to un-subscribe from their service. I don't find most of their catalog all that appealing and mostly just watch their old shows (Sopranos, The Wire, etc.) along some of their newer stuff (Westworld being the only one I've actively followed even if the un-planned nature of the writing really has really started to show) so it's not like I'm going to miss out on all that much when I move back to Netflix and the local BBC equivalent's streaming service.
Don't, please (Score:2)
Don't ruin Game of Thrones :(
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Looks like GoT is ending just in time. Now if I could get my wife uninterested in Westworld, we can completely drop HBO....
Luckily our cable co let's us swap premium channels. We can drop HBO till the new and final GoT season starts, and for Westworld. After Westworld, won't see any reason to go back...
Well.... (Score:2)
" Because you get more data and information about a customer that then allows you to do things like monetize through alternate models of advertising as well as subscriptions, which I think is very important to play in tomorrow's world."
Your world sucks, please die and take everyone that wants that world with you....
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I had @home in the early days. What a complete waste of a company. Almost nothing worked besides their basic internet service.