7:22 AM PST 1/27/2021
in
Etan Vlessing
“It was a bold and aggressive change,” Stankey told analysts after the telecommunications and media giant decided to shift its legacy from theatrical business to the streaming space with HBO Max.
AT&T Inc. CEO John Stankey defended moves by the telecommunications and media giant to shift its legacy from theatrical business to the streaming space with HBO Max in the midst of the pandemic.
“It was a bold and aggressive move; it was done with a lot of thought about what needed to be done in the subscriber space and the balance of value in our franchises between our theatrical and streaming businesses,” Stankey told analysts during a morning call after the disclosure of AT&T’s fourth quarter financial results.
In December 2020, Warner Bros. and WarnerMedia announced that they would severely interrupt the cinema window and send the entire list of 17 films from 2021 to HBO Max’s streaming service, premiering titles the same day that they would open in any cinemas that admitted customers, allowing for pandemic blockages . Stankey reiterated that WarnerMedia focused on HBO Max as market conditions in 2021 dictated future distribution plans.
“I would say the data points have arrived and have been very consistent with the set of assumptions we had at the beginning of this,” he added, while pointing to rival studios following his studio’s example and changing their own support releases for later. , in 2021 and 2022.
Stankey predicted a “very crowded theater field” for the end of 2021 and the beginning of 2022, which he added is unlikely to dramatically increase the number of consumers who migrate to the local multiplex. In view of the long-term recovery forecast for the theater business, AT&T, as part of its fourth quarter results, recorded about $ 780 million in loss charges for its production and other content inventories at WarnerMedia, with $ 520 million resulting from the continuous shutdown of cinemas during the pandemic and the hybrid distribution model for the studio’s 2021 film.
“As we indicated when writing off, we felt that there was a deteriorated asset that needed to be moved and used more effectively, and that was the right economic decision,” said Stankey. He added that the decision to minimize poor box office returns and build the HBO Max subscriber base during the pandemic “allows us to have options in our distribution and use this unfortunate set of circumstances surrounding the pandemic for an opportunity to make lemonade with lemon the right call in this case. “
Stankey also seemed to touch the reaction of cinema owners, Hollywood directors and A-list talent to seeing films originally intended for theaters suddenly appear in the streaming space. “There were some things that maybe we could do a little bit differently, but at the end of the day, it will boil down to making sure people are well compensated and treated well and I think we know how to do that,” he argued.