ON THE EVENING of February 28th Casey Bloys, president of programming for HBO, a television network, called David Simon, creator of “The Wire”, one of its most highly regarded series, on a set in Manhattan. Richard Plepler, boss and public face of HBO, had just announced he was leaving, and Mr Bloys was trying to reassure the talent. The message, Mr Simon says, was to keep going, that “nothing has changed here”.
In truth, much has changed. HBO, long a powerful fief of creativity under Time Warner, a media group, is now run by AT&T, a vast telecommunications company. In June 2018 it closed its purchase of Time Warner after an antitrust judge approved the merger—a decision upheld on appeal on February 26th.
The phone firm could simply have declared that HBO would become its global streaming brand—a more prestigious version of Netflix—under Mr Plepler. During his reign as co-president from 2007 and as chief executive from 2013, HBO developed critically-acclaimed hits such as “Veep” and “Game of Thrones” while generating massive profits for Time Warner ($2.2bn in 2017).
Instead AT&T whittled away at the autonomy of Mr Plepler and of HBO. In October John Stankey, an AT&T executive put in charge of WarnerMedia (the new name for Time Warner), announced a new streaming service that would combine content from HBO, Warner Bros studio and the firm’s Turner division of cable networks. Mr Stankey said HBO would be the centrepiece of that offer. But he also said WarnerMedia must offer a lot more entertainment of all kinds to engage streaming subscribers daily.
It was clear HBO was to have a subordinate position in his plans. On March 4th Mr Stankey put Robert Greenblatt, a former chairman of NBC Entertainment, in charge of HBO, Turner’s entertainment networks and the streaming business. David Levy, the respected boss of Turner, resigned a day after Mr Plepler.
WarnerMedia will test its new service by the end of this year in an increasingly saturated market. Netflix has 139m subscribers. Apple and Disney are launching streaming products this year. HBO, with 38m subscribers in America and more than 100m worldwide, will be vital.
The question is whether AT&T’s ambitions will enhance or diminish HBO’s standing. A new streaming service with a wide range of content raises the risk of confusing consumers. And Mr Stankey has made clear he wants HBO itself to produce far more programming, which will test the network’s capacities as a tastemaker. “Everyone’s hoping that they will find a way to get what they need in terms of more production without diluting HBO’s brand,” Mr Simon says. “It’s going to require a lot of finesse.”
This post was originally posted at https://www.economist.com/business/2019/03/09/hbos-boss-resigns-raising-questions-about-warnermedias-strategy.