This week, a leaked recording of an internal AT&T/HBO meeting had people speculating on HBO’s future. We discuss the issues and possible ways for HBO to expand without destroying the brand. Netflix improved its download feature this week.
Chapter 1: AT&T wants HBO to grow (1:30)
John Stanky, Chief Executive of AT&T’s new Warner Media, told a group of HBO employees he plans to boost the $2B a year the company spends on content. He says he wants HBO to get bigger. Will agrees with Mr. Stanky’s desire for growth. He says that Time Warner Inc. constrained how much HBO could grow and agrees with AT&T’s desire to remove these constraints.
We discuss if you can scale HBO up without losing the premium brand reputation that the company has built. Looking at how Netflix approaches content creation, it could be that pushing HBO to grow bigger will result in lower quality content.
Netflix, which is spending four-times as much as HBO on content in 2018, isn’t seeking to build a premium brand reputation like HBO. It aims to be the only entertainment-oriented service viewers need. In other words, it has broad appeal with the average quality of content lower than HBO.
Chapter 2: Netflix has more Emmy nominations than HBO (9:00)
For the first time in 17 years, HBO did not receive the most number of Emmy nominations in 2018. Netflix received 112, HBO 108. Netflix has grown nominations from 31 in 2014 to 112 this year.
However, there is evidence that with a much smaller content spend, HBO is still producing better quality shows. HBO has the most nominated show, Game of Thrones, with 22 nominations. Another marque HBO show, Westworld, was second with 21. The highest nominated show for Netflix was The Crown, with 13 nominations.
Chapter 3: Could HBO expand internationally? (12:40)
HBO could expand in International markets. It already has a substantial number of subscribers outside the US. However, the company has successfully expanded its US subscriber base with HBO Now while also increasing the number of pay TV subscribers to the service. It could follow a similar model abroad.
Chapter 4: Netflix improves download functionality (17:40)
Netflix has made some improvements to its download feature. When a downloaded episode is watched, it will be automatically deleted. As well, once the device connected via Wi-Fi, the next episode will be automatically downloaded.