With Exit of HBO and Turner Chiefs, AT&T Tries to Fix What Ain’t Broken (Analysis)

HBO and Turner are two of television’s greatest success stories. But at a corporate town hall meeting last June, longtime AT&T executive John Stankey, the new leader of both, made it clear he wanted more. Promising “a tough year,” he said HBO’s castle keep of Emmys for shows like “Game of Thrones” wasn’t enough. He said viewers need to watch the premium network for “hours a day,” as the New York Times reported. It sounded like a repudiation of the quality-over-quantity formula that has made HBO the envy of most networks. Stankey said on stage that HBO makes money — “just not enough.” HBO’s chief, Richard Plepler, pushed back: “Oh, now, now, be careful,” he told his new boss, according to the Times. On Thursday, Plepler announced his exit in a press release that included promises of a smooth transition and positivity from both him and Stankey. Soon after came reports that David Levy would also exit as president of the Turner division, which includes networks from TBS to TNT and Cartoon Network to Turner Classic Movies and truTV. (Levy confirmed his departure in a memo to staff on Friday.) The departures came a day after the Wall Street Journal reported that former NBC entertainment president Bob Greenblatt was in talks with AT&T’s WarnerMedia to head up a combined HBO and Turner, under Stankey as chief executive of WarnerMedia. The new combined organization would reduce redundancies, but also combine two very different entities. CNBC reported that Plepler wanted more autonomy — to keep doing the job he has done successfully for over a decade — but that Stankey “was effectively running HBO.” WarnerMedia has declined to comment. The question now is whether the moves will finally yield “enough” money to justify fixing TV empires that don’t appear to be broken. HBO has thrived in ratings and awards since Plepler greenlit his first show, “True Blood,” which debuted in 2008. Subsequent successes included “The Pacific,” “Big Little Lies,” “Boardwalk Empire” and “Veep.” He also gave John Oliver his acclaimed show. An HBO representative told TheWrap that Plepler has no set end date, but it’s probably “several” weeks away. He will not make the move when the company moves into its new building in the Hudson Yards area of Manhattan in late April or early May. There’s also no word on when Levy might exit Turner, a ratings stronghold where he has served as president since 2013. TBS wrapped 2018 as the sixth-most-watched cable channel, followed by TNT. “After much consideration and more than 32 years at Turner, the past six years as the President of this great company, I have decided the time is right to leave my role,” he wrote in a memo to staff. “I am ready for a professional change.” AT&T first announced in October 2016 that it intended to buy Time Warner, now known as WarnerMedia. An appeals court on Thursday allowed the merger to go forward. But that town hall last June provided an early indication that the one-time phone company wanted to increase revenue by focusing on the screen in your hand, not the one in your living room. “It’s not hours a week, and it’s not hours a month. We need hours a day. You are competing with devices that sit in people’s hands that capture their attention every 15 minutes,” Stankey said, according to the Times. The question is whether Thursday’s moves mark the end of an era, when Sunday nights on HBO have felt like the openings of big-budget blockbusters, Oscar contenders or Broadway plays. As Stankey outlined in June, his plan wasn’t just to entertain viewers, but to mine their data, as the Times quoted him saying: “Why are more hours of engagement important? Because you get more data and information about a customer that then allows you to do things like monetize through alternate models of advertising as well as subscriptions, which I think is very important to play in tomorrow’s world.” Gone are the days when Tony Soprano — whom Plepler quoted in his goodbye message Thursday — was enough. Stankey is thinking about “tomorrow’s world” of tracking what you watch, and regurgitating your desires through targeted programs and advertising. The days of data mining may also replace the days of Plepler mining authors and journalists for good ideas for prestige programming. “For authors of high-end fiction and nonfiction, HBO is one of the last games in town,” Frank Rich, a former New York Times columnist executive producer of HBO’s “Veep” and “Succession,” told the Times in a 2012 profile of Plepler. In his statement on Thursday, Stankey heaped praise on Plepler. “Richard is one of the most successful executives in our industry and I have been fortunate to have his support over the last months,” he said. “His vision, energy and passion helped to elevate HBO’s brand to what it has become today. Richard’s impact to our business and on the passionate viewers of HBO’s enduring programming will continue to be felt for years.” The next version of HBO, whatever it is, will face a slew of new competitors which are themselves deciding whether to focus on prestige programming, round-the-clock eyeball suckage or some combination of the two. They include Netflix, Amazon and new, big-spending streaming services from Disney and whatever Apple eventually unveils. Perhaps one of them will hire Plepler. Tony Maglio, Jennifer Maas, Tim Baysinger and Reid Nakamura contributed to this story.