- Now that HBO is owned by AT&T, the network’s new corporate boss, John Stankey, wants HBO to develop more shows and movies to compete with other streaming services like Netflix.
- HBO has previously distanced itself from Netflix’s model to focus on quality over quantity. HBO CEO Richard Plepler has even said “more is not better.”
- But at a recent town hall with Stankey, Plepler seemed to change his tune, and said “we need a lot more to be even better.”
AT&T wants HBO to be more like Netflix – at least that’s the vibe that was given off by its new corporate boss at a recent town hall meeting for HBO employees. And such a move would be a dramatic shift for a network that has previously distanced itself from the Netflix model.
AT&T has wasted no time in expressing its plans for the premium network since a judge approved the $85 million acquisition of Time Warner, HBO’s parent company, last month. “Warner Media’s” CEO John Stankey, who AT&T tapped to oversee the new media properties, made it clear that big changes were on the horizon during a talk with HBO CEO Richard Plepler at a recent town hall, a recording of which was obtained by The New York Times.
HBO has always been more concerned with quality programs than its amount of content, as it focuses heavily on its Sunday night programming and prestige shows. The basic HBO idea was to mix a back catalog of movies, which actually account for most HBO viewing, with a few marquee shows the audience would look forward to. Being an HBO subscriber was being part of a club, and the value wasn’t necessarily measured by the hours you spent watching, but whether you continued to pay to be part of it.
HBO’s focus on a few shows has been a sharp contrast to Netflix’s in recent years. Netflix is spending billions more than HBO per year on programming, and wants to have over 1,000 original shows and movies by the end of the year.
HBO’s response used to be “more is not better, only better is better” – which Plepler said when asked about Netflix’s strategy last year.
“We’re not trying to create the most, we’re trying to create excellence across our categories,” Plepler told CNBC last year. “And we have more than the resources necessary to do that,” he added, referring to HBO’s programming budget of around $2 billion.
But Plepler seemed to change his tune during the town hall with Stankey.
“I’ve said, ‘More is not better, only better is better,’ because that was the hand we had,” Plepler said. “I’ve switched that, now that you’re here, to: ‘More isn’t better, only better is better – but we need a lot more to be even better.'”
The thinking that HBO needs to get “a lot” bigger is a major change from Plepler.
Without ever referring to Netflix, which currently dominates original content in the eyes of consumers, Stankey was adamant about shifting HBO’s way of doing things during the town hall.
“It’s not hours a week, and it’s not hours a month,” Stankey said. “We need hours a day. You are competing with devices that sit in people’s hands that capture their attention every 15 minutes. I want more hours of engagement.”
He continued: “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.”
While HBO’s streaming service, HBO Now, is gaining momentum and is expected to reach 7 million subscribers by the end of the year, it doesn’t sound like that’s enough for Stankey. He said the current total subscribers (40 million in the US and 142 million worldwide) was not sufficient. HBO would have to become a “much more common product.” Another word he used was “broad.”
The most salient question is whether HBO can continue its “excellence” with an increased output of shows, especially ones that are expected to attract a “broad” audience. HBO will get more money from AT&T, but as HBO’s programming chief Casey Bloys said when talking about Netflix’s spending, “money is obviously very nice but it doesn’t automatically mean quality.”
As the streaming wars heat up between Netflix, Hulu, Amazon, Apple, and others, we’ll see if HBO can strengthen its position even further under its new direction. In 2013, Netflix’s chief content officer, Ted Sarandos, said “the goal is to become HBO faster than HBO can become us.”
It seems Stankey is trying to push HBO firmly in that direction.