John Stankey, CEO of AT&T WarnerMedia, discussed the launch of their new HBO Max streaming service and the future of AT&T. He talks about the changing industry, the changing company and the changing competition. This was a very eye opening and important conversation. Let me share some thoughts on the interview he had with David Faber on CNBC.
Looking forward, AT&T is becoming a much larger, expansive and growing company. The acquisitions they have made in the last few years all play an important role in the formation of this growing and changing company.
The different parts will both all work separately as they have in the past, but they will also work together, unleashing new areas for growth that never existed before.
This is exciting for investors, customers and workers. This will take some time to complete, but then again, this is a similar path to what AT&T took fifteen years ago.
You remember 15 years ago when baby bell SBC acquired AT&T, BellSouth and Cingular. It took some time and work to weave it all together, but it was worthwhile because it created the powerhouse called AT&T today which has shown enormous growth and has benefited from this long-term approach.
The vision AT&T has of what tomorrow will look like makes just as much sense today. In fact, others see the same future.
That’s what Comcast NBC Universal sees which is why they will launch their own streaming service called Peacock next year. That’s also what Disney sees with their own streaming app, and Apple TV+.
AT&T on growing side of growth curve
In fact, I expect to see others jump into this new and rapidly growing space as well. This industry is on the growing side of the growth curve I often talk about.
Blending HBO Max, media and entertainment from WarnerMedia, DirecTV, AT&T TV, wireless, telecom and Internet networks makes enormous sense.
This is a case where one plus one could ultimately add up to much more than two. They did it before and they are doing the same thing again.
Several months ago, when I visited AT&T NOW at Warner Brothers studio in Hollywood, they showed how these different parts can all work together creating new growth opportunities. It was an amazing glimpse into what tomorrow will look like.
That was exciting and just part of the longer-term story that will continue to transform AT&T, other competitors and in fact, the entire industry.
HBO Max is new AT&T streaming service
This past weekend, AT&T launched HBO Max, which is their streaming service.
Stankey discussed how streaming is the next step in the world of television and entertainment. How it started with broadcasting signals, then moved to cable TV decades ago and now is moving toward Internet based wireless and wire line streaming services.
There are several larger players moving in this same general direction. Think Comcast Peacock or Disney or Apple TV+ with their assorted new streaming services.
In fact, I predict there will be others who jump into this space as well. We are still in the very early stages of this new streaming growth opportunity.
Some of these will be further ahead than others with content and other deliverables.
HBO Max has a head start compared to many competitors. They have an enormous content library with WarnerMedia and HBO.
They already have a similarly service and that’s why they believe the $15 monthly fee will be successful as they compete with others at a lower price point. Stankey says HBO Max is loaded with high value content today. Something competitors do not have yet.
He says HBO Max is not the same kind of service as others. He says they already have content and customers. It’s just a matter of expanding the base and winning new customers.
HBO Max has a head start compared to competitors
I see these new streaming services as all being in the same business, however HBO Max does have a big head start. That means they have a more valuable service today and will for the foreseeable future.
Stankey seems very excited about this opportunity. He says this should not be difficult because they already offer the kind of content customers want and many already get. Their plan is to rapidly expand this world.
It will take competitors time to get up to the level of where HBO Max is starting from. So, he is very excited about the future of HBO Max, and in fact WarnerMedia and the entire company.
Blending different sectors into one, big, new, industry
It’s a case of blending separate industries and creating new value. Something they have done in the past. Remember back in the 1990’s when we had to do business with separate companies for local telephone, long distance telephone, wireless, Internet and cable TV or pay TV?
Today, these are the services AT&T offers to all customers from one company. In fact, today several companies offer a similar bundle of services as well. That transformation seemed tough back then, yet it happened.
That is the same kind of opportunity today as companies move to blend entertainment, movies, pay TV, wireless, telecom, Internet and streaming services. Remember, this is a case of one plus one equals more than two.
There are several companies in this space, so I see this being a very exciting and growing industry for the next decade. This is what tomorrow looks like. But, remember not to blink because new technologies and new products keep popping up all the time and changing the world.
