AT&T Chief Says Tech Giants Hold Too Much Power Over Streaming
October 19 2020 - 3:04PM
Dow Jones News
By Drew FitzGerald
HBO Max is attracting more viewers but is still at a huge
disadvantage to tech companies in the streaming video market, the
chief of the service's parent company said Monday.
AT&T Inc. Chief Executive John Stankey said the coronavirus
pandemic showed that internet providers no longer act as
gatekeepers for online content, with most cable and fiber networks
performing well under the crush of Americans working and studying
remotely this year. But the CEO said tech giants like Amazon.com
Inc. and Apple Inc. should be scrutinized for their power to
restrict the kinds of apps and services allowed on their
platforms.
"Where the bottlenecks are sometimes occurring are in these
commercial agreements," Mr. Stankey said during The Wall Street
Journal's annual Tech Live event Monday, which the pandemic forced
online this year. "We should ask ourselves, is that friction
somebody really feeling their oats and maybe having market power
above and beyond what's reasonable for innovation?"
HBO Max has been hemmed in for the past few months by
disagreements with Amazon and Roku Inc., which so far have refused
to open their app stores to the new streaming service. AT&T is
working to grow the premium channel's subscriber base while
convincing existing viewers to switch to the Max app, which offers
more to watch and provides AT&T with better profits than the
slimmer HBO lineup offered through cable partners like Comcast
Corp.
HBO Max joined a crowded arena of new video apps from Amazon,
Apple and Walt Disney Co. vying for viewers' attention when it
launched in late May. It is a supersize version of the premium
cable channel AT&T acquired through its 2018 purchase of Time
Warner, and mixes licensed series like "Friends" and "The Big Bang
Theory" with HBO's library of original TV series.
About 4.1 million customers had activated HBO Max at the end of
June, a sliver of the roughly 36 million subscribers paying for any
form of HBO.
Asked Monday about how the streaming service has performed, Mr.
Stankey said the app was "well beyond our objective of having over
an hour of engagement," adding that "we still have work to do to
get the scaling done."
The pandemic has altered more than just AT&T's bid for binge
watchers. It has also hammered revenue from advertising and
theatrical releases. Mr. Stankey said that has given the media unit
an opportunity to hasten some long-planned overhauls, including the
integration of the fenced-in HBO, Turner and Warner Bros. units it
inherited in the acquisition.
"We wanted that company to truly operate as one," Mr. Stankey
said.
The AT&T chief declined to detail the status of various
divestitures the company is weighing but said such activity is
something any good management team should consider. The Journal
reported earlier this year that the company was exploring the sale
of its DirecTV satellite business as well as some advertising
assets that once made up its Xandr unit.
"In terms of us acquiring something, that's not what our focus
is right now," he said.
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
October 19, 2020 14:49 ET (18:49 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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