AT&T’s top media executive walked into HBO recently and told the highly respected entertainment company’s staff that they needed to work harder and make more money, and that they were lucky to have been purchased by AT&T, according to The New York Times, which listened to a leaked recording of the internal meeting.
The executive, John Stankey, who now oversees AT&T’s media businesses, also said that HBO would have to become a network that was “broad enough” to appeal to and be found in far more homes — the current “35 to 40 percent penetration” not being enough.
HBO needs to do that, Stankey reportedly said, to benefit AT&T’s ad business. With more engagement, he said, “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.”
From the sound of it, HBO’s staff was not exactly thrilled with Stankey’s remarks. At one point, Stankey implied that HBO didn’t make a profit. Richard Plepler, who has run HBO since 2013, corrected him — to some applause from staff — according to the Times. Stankey then chimed back, “You do. Just not enough.”
Stankey also gave HBO employees this metaphor to sit with, after telling them they would have to work harder:
“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.’”
The bigger picture seems to be that Stankey is talking about turning HBO into more of a direct Netflix competitor — something that doesn’t just focus on prestige content, but also includes a wider variety of shows and movies for people to watch. Stankey said HBO needs to get people watching for “hours a day” instead of “hours a week.”
Stankey said he wants to do that “without losing the quality” HBO is known for. But that’s no easy task at a network that spends years developing its properties and allows those properties to have short seasons, long breaks, immense budgets, and whatever else they need to succeed. It’s very much a formula that will not be easy to scale, and it’s easy to imagine AT&T losing what made HBO so successful in the process.
Instead, it sounds more like HBO is turning into a real-life version of Westworld. We might all think it’s about entertainment, but the boss just cares about our data.