AT&T CEO Calls Warner Pictures' Windowing Changes 'Win-Win-Win'
AT&T’s decision last week to release Warner Pictures' full 2021 film slate on HBO Max in a one-month streaming exclusive simultaneously with the movies’ theatrical release (see 2012030054) was born of the realization that “we probably needed to try something different” as COVID-19 prevents consumers from returning to theaters, AT&T CEO John Stankey told a UBS investor conference Tuesday. “There is a win-win-win type of solution here” for consumers, AT&T and theater owners, he said. (Select "past" and then "12/8" presentation materials here.)
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Anytime the business model changes, “it creates a degree of noise, and this is certainly no exception,” said Stankey. He thinks “rational parties will step back” and ultimately agree that “giving theater owners a predictable release of content over the next several months that they can plan around and start to work their business around is a good thing for them.” Not all were enamored (see 2012040047).
Getting the product out in the market in a “staged way” was important, “because snowplowing all theatrical content into late 2021 or early 2022 probably isn't going to help anybody,” said Stankey. Theatergoing won’t “dramatically increase in size” as long as there’s a “prolonged recovery” from COVID-19, he said. “Smoothing that out is frankly in the best interests of not only our product, but those that create it, so that we get exposure.”
Warner does theatrical-based movie content “as well as or better than anybody else,” said Stankey. This was an opportunity to take a streaming product and “scale it” quickly, he said. It gives consumers a “value-added equation,” he said. “If they want to be part of HBO Max and watch the great content at home, they can. If they wish to go into a theater, they can do it that way.”
AT&T has had “great success migrating customers into HBO Max from our legacy HBO products and establishing a more direct relationship with us,” said Stankey. “Putting the slate out there is only going to accelerate that further.” The amount of hours consumers “engage on the platform is really, really critical, and the theatrical experience is going to help that.” HBO Max “engagement” hours are up by more than a third in the past 30 days, he said.
“We care about theatrical, and we care about streaming,” said Stankey. The decision “ensures that we are doing this in a way that we still show our respect for the theatrical venues and distribution,” he said: AT&T resisted pushing all its Warner content on a direct-to-streaming “construct” or handing it off to competitors that aren't as “vested in the theatrical business.”