AT&T Monkeys with HBO’s Swing
It’s so obvious what AT&T should have done with HBO. Instead, they did the opposite.
On a mirror is a taped sign of a Ted Williams quote that he has carted to nearly every office he has inhabited in his long career: “Don’t ever let anyone monkey with your swing.”
This was an aside in a piece earlier this month about former HBO boss Richard Plepler signing an exclusive deal with Apple to produce content for Apple TV+. It’s a huge coup. Perhaps the biggest one possible in this landscape. Forget signing up a showrunner. Or getting the rights to stream a hit show of yesteryear. Plepler essentially built HBO into what it is — er, was (more on that in a bit). He’ll lure both great showrunners and as a result, hits. Sure, he’s not running Apple TV+, as the aforementioned article goes out of its way to make clear several times. But does that really matter if the end result is the same?
Anyway, the move is still crazy to think about weeks later. It would seem to instantly turn Apple from a colt that stumbled out of the gate into a thoroughbred racehorse. And on the flip side, it showcases just how stupid AT&T (the parent of Warner Media, which is the parent of HBO) was to let Plepler go.
I’m sorry, strike that. They clearly forced Plepler out. If not explicitly, they obviously forced his hand. Just read that quote up above again. Plepler cared about one thing: autonomy. AT&T knew that because everyone knew that. Because Plepler told everyone and anyone that. Including the public, by way of The New York Times:
When AT&T made its bid for HBO’s former corporate parent, Time Warner, in 2016, Mr. Plepler told The New York Times that there needed to be a “Chinese wall” between the premium cable network and the rest of the company. That did not happen.
Of course, it’s surprising that anyone thought such a marriage would ever work. Once some comments from an internal townhall between Plepler and AT&T exec John Stankey leaked 18 months ago, the writing was clearly on the wall. They were trying to say the right things, and failing. Within months, Plepler was gone. And now he’s landed — at the place that is trying to become something akin to HBO, which just got a lot easier since HBO is ceding that high ground to become something akin to Netflix — or something.¹
An interview The Hollywood Reporter did with new HBO Max boss Richard Greenblatt last month is quite the read. Some key parts:
HBO and HBO Max: How do you distinguish the two?
They’re separate, but that’s the old way of thinking about it. They’re ultimately going to live together, bundled next to each other in the same app. So, yes, they’re separate departments but they’ll coalesce into one unified experience.
Why are they different departments? And will they always be?
In five or 10 years, do we do more consolidation? I’m not sure. At the moment, HBO is the signature of the platform, and nothing is more important than keeping it intact. It has a slightly older, 40-plus audience, and we know what kinds of programming they do. But there’s a lot they don’t do.
So what is HBO Max?
Max is the rest of it. Kids all the way up to the young adults. And different genres, like YA or unscripted, which HBO largely doesn’t do. We’re trying really hard to assign the same quality level and curated feeling that HBO has. It’ll never be 50,000 hours of programming. We’re starting with 10,000. When you look at 50,000 or even more when you go to Amazon, I just don’t know who that programming is reaching. We know statistically that 50 percent of usage in these platforms is through the 100 top titles. So, where are the other 50,000 titles? Who are they reaching?
To recap: HBO no longer wants to be what it was, which was highly curated prestige television content. Instead, it wants to be highly curated prestige television content at scale. This is, of course, an oxymoron. But Greenblatt clearly doesn’t understand that yet.
Worse, he goes on to crap on content at scale, like what Amazon offers? Which just highlights that he really doesn’t get it. Prime Video is a part of Prime itself. It’s an entirely different model. They’re not charging $5 or $10 or — gasp — $15 a month, like certain other streaming services are. You’re getting it for “free” with a service you’re already paying for. At worst, it’s churn reduction; quality matters for some subset of the subscriber group, but a sheer magnitude of content matters far more. This is on purpose. Again, Greenblatt clearly doesn’t understand that.
To be fair, I’m not sure he has to fully understand Amazon’s model, but at the very least he should understand the landscape in which he now operates. And the incentive structures. Like say, for the prestige content he wishes to maintain? The interview continues…
Warner Bros. has recently signed massive, cross-company deals with J.J. Abrams and Berlanti and has been part of heated bidding wars for others. Is there a ceiling, and how close are we to it?
We’ve let a few go. David Benioff and D.B. Weiss. Lisa Joy and Jonathan Nolan. We follow a different metric than a Netflix does. They don’t necessarily have to show profit. We do. Go figure. (*Laughs*) It’s the job of Casey Bloys, of HBO and Kevin Reilly, of HBO Max to figure out who is the next Nolan and Joy. Nobody knew who they were four years ago. Now, you want to retain talent if you can, but once the market goes crazy, you’ve got to make a decision, and at a certain price point, we will step out.
So, for those keeping score at home: HBO Max apparently follows a different metric than Netflix does, than Amazon does, and than the old HBO does. From his comments, it would seem to be a mixture of profit, scale (but not too much scale), and prestige (but not too much prestige, as they don’t want to pay for the above prestigious figures or retain people like Plepler). It sounds like having your cake and eating it too and also trying to profit off of the cake you’ve already eaten after you throw it up. Or something. It sounds like a fantasy not seen since Game of Thrones. Which, incidentally, is seemingly less and less likely to appear on the HBO of the future…
They still have the HBO name though!
Take me through the decision to call the service HBO Max. Did you consider names without HBO in it?
We did a lot of research, and as great as HBO is, there are some negatives to it. It’s higher price point and doesn’t automatically include the whole family. You think it’s an adult service. So there were those concerns we thought about. On the other hand, there’s no greater brand we could come up with to sell the service and make it immediately recognizable and stand for something.
Yeah, because “Max” will clearly make people think this service will be cheaper than “HBO” is? Really? And “Max” will make it seem less adult-focused? Have they heard of “Skinemax”?² Also, all of this focus group nonsense is what they care about and how they made such decisions? Clearly!
How do you alleviate concerns that this will tarnish the HBO brand?
I think it’s more the press’ concern than the public’s, honestly. And the people at HBO are fine. But, look, the dirty little secret is that HBO has hit a ceiling. It can’t grow. In a world where there’s Netflix and Amazon, the only way to grow, I guarantee you, is to bundle it with something else that’s going to lift it. And if that something else didn’t exist in Max, HBO would be in a very precarious place. Everybody thought Dish would come running back from a carriage dispute when ‘Game of Thrones’ came back on. And they went, “You know what? It’s too expensive. We have other services and we have to lower the price point for our customer.” That’s going to happen more and more.
I don’t even know where to begin with that. But it’s sort of the perfect quote that showcases how the entire interview is a constant barrage of contradictions. It’s not that I don’t think AT&T knows what they’re doing with HBO, I think they know what they’re doing, but clearly have no idea why — or what it will do to the service.
So let’s switch gears for a second. I’m going to lay out a crazy (read: not crazy) strategy that I think AT&T should have followed instead:
Step 1: Keep HBO as-is. Keep it the home for prestigious, high-quality television. Keep Plepler running it. Keep Benioff and Weiss, Joy and Nolan, and the rest. Put more resources into content to scale it up a bit. But be careful not to cede the high ground here. This is the crown jewel. Don’t fuck it up.³
Step 2: Group together a bunch of other content you acquire — Friends, etc — and call it “Warner Max” or some such.⁴ Make HBO a part of that bundle as well. If you must go after the highest price possible, Warner Max costs $15/month. But you also continue to offer HBO by itself, just like you have now, but the price is now $10/month.
Step 3: Offer various bundles for AT&T and DirecTV subscribers which gives your loyal user base some combination of the above two tiers for “free”. Also incentivize others to sign up for said services with bundles. Work with what you have. Play to your strengths.
Step 4: Profit. Or rather, continue to profit.
It’s not that hard, guys. Except apparently, it is. One thing it’s not: HBO.
¹ It’s honestly a little hard to know what they’re doing when the plan is to spend $2B on content next year versus… $17B — SEVENTEEN — for Netflix.
² Of course they have, they also own CineMAX.
³ This is, of course, what Stankey was trying to make it seem like the plan was 18 months ago… But again, you could read between the lines of that talk to know what they would do — again, that was the crux of my post back then, which is played out exactly as expected.
⁴ You probably don’t want to use the AT&T brand, which is pretty poor. And rightfully so. Plus, it’s already a clusterfuck branding nightmare.
