A month after WarnerMedia CEO John Stankey said HBO must get “bigger and broader,” he elaborated on just what that meant.
“My goal is to give the HBO team the resources to greenlight additional projects already in the development funnel,” Stankey explained during parent company AT&T’s second quarter earnings call on Tuesday. “We want to invest more in original content while still retaining the high quality and unique brand positioning of HBO.”
Stankey pointed out that HBO CEO Richard Plepler and his team have missed out on potential series because they didn’t have the endless budget of other deep-pocketed tech giants. “We have a tremendous amount of great projects already in the funnel.”
According to the New York Times, during an employee town hall meeting shortly after AT&T’s acquisition of Time Warner closed last month, Stankey called on HBO to substantially increase its subscribers and the time its viewers spent watching — and hinted at new investment to ramp up content. Stankey’s comments quickly raised eyebrows around the industry, sparking fears that HBO would undermine its decades-long successful model in a bid to compete with Netflix.
But on Tuesday, he pushed back, stating: “I don’t believe it effectively characterized what we are about.”
HBO has been the envy of the TV industry for the better part of two decades, likening itself to a bespoke shop vs Netflix’s “throw-everything-and-anything-at-the-wall” strategy. This has allowed HBO to lure A-list talent that helps them grab critical acclaim and Emmy trophies, while maintaining strong profits. Over the last three years, HBO has spent more than $2 billion annually on content, which has yielded nearly $6 billion in profit.
Though he wouldn’t give a hard number, Stankey said that they won’t attempt to match Netflix pound-for-pound when it comes to scale, classifying the investment as “a responsible amount.” Netflix spent $8 billion on content alone in 2018.
In years past, HBO was able to spend more on dramas than just about everyone else in traditional TV, but deep-pocketed tech giants are shifting expectations. Apple, Hulu and Amazon are all spending ambitiously to compete with HBO for big-time creative talent including Jennifer Aniston, Jordan Peele and Oprah Winfrey.
Stankey hopes the push for more HBO content will keep subscribers from dropping the network when a “Westworld” or “Game of Thrones” isn’t running. “We have customers jumping in and out based on our schedule,” he said. “The team feels very comfortable that we can flex up the development.”