AT&T CEO Defends Streaming, as Analysts Are Cautious on C-Band Spending
AT&T's chief defended the telco's controversial decision to stream on its own HBO Max its entire 2021 film slate, as analysts reacting to Q4 results were cautious about the carrier's FCC C-band auction spending. Analysts note the company was probably spending many billions of dollars on the auction. The FCC quiet period prevents executives from speaking about the auction.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
AT&T may issue $14 billion in short-term debt for the C-band auction, MoffettNathanson's Craig Moffett wrote investors. "There’s no guarantee that they won’t need to raise even more to cover their auction 'winnings.'"
The WarnerMedia “team” took a “bold and aggressive swing” when it decided to release the full 2021 Warner Pictures film slate on HBO Max in a one-month streaming exclusive at the same time it releases the titles theatrically worldwide (see report, Dec. 9 issue), said AT&T CEO John Stankey on a Q4 call Wednesday. The company stands by the decision as “appropriate for this moment” amid the pandemic, despite industry and analyst pushback that greeted last month's move, he said.
Stankey thinks the “data points” that ensued since the studio “articulated” the strategy have validated this: “Just in the last several weeks, you’ve seen other studios continue to snowplow releases, moving them out of the first half of the year.” That “further cements our point of view that we’re going to see a very crowded theatrical field as we get into late 2021 and early 2022,” he said. “We don’t believe that magically, just because there’s more content showing up in theaters all at the same time, that that’s going to dramatically increase the size of the moviegoing population.”
Warner has a good track record in “making sure people are fairly compensated and treated well,” Stankey said. “I think we know how to do that. I think we’ve been good to the theater owners.” The National Association of Theatre Owners didn't comment.
AT&T is “still shooting” for Q2 launch of its ad-supported VOD offering, said Stankey. COVID-19 disruptions in content production are making it difficult to “pinpoint” a specific AVOD service offering launch date, said Stankey. “Ramping that back up has been a pretty significant task.” The pandemic “puts a little bit of overhead on things in terms of speed of production and what we’re able to do,” he said. “We’re still fighting through getting the pipeline filled, dropping the content at the right rate and pace that we wanted to. The first quarter this year continues to be a bit of a stretch in that regard as we cycle back into production.”
AT&T has “the team tasked” to install broadband fiber in 2 million more homes this year, said Stankey. “All the infrastructure is in place, and we’re going in and picking up the next adjacent neighborhood,” he said. “It’s not the lift that it was the first time we started ramping up on this. We’ve got a little bit smoother dynamic around it than what you might think.”
There were 800,000 postpaid phone subscriber net adds in Q4, compared with 229,000 in the 2019 quarter, the company said Wednesday. Q4 churn of 0.76% was the company's second-lowest quarterly count ever. Fiber subscription net adds were 273,000, compared with 191,000 a year earlier. AT&T had 5 million fiber subscribers, compared with 3.9 million. It estimated fiber penetration grew to 34% of targeted U.S. homes in Q4, from 28%. The company finished Q4 with a combined 41.5 million HBO and HBO Max subscriptions, up from 34.6 million. HBO Max activations doubled since the end of Q3 to 17.2 million.