WarnerMedia Chief John Stankey: Our “Flywheel” Approach Will Prevail As Netflix Library Gets “Thinner”

By Dade Hayes, Dawn C. Chmielewski


In outlining WarnerMedia’s strategy for direct-to-consumer streaming, CEO John Stankey relied heavily on language more common in engineering circles than lunch tables at the Brentwood Country Mart.

He laid out the plans to a roomful of Wall Street investors and analysts eager to hear more details about the post-merger course of WarnerMedia parent AT&T, not wasting the chance to zing Netflix, albeit not by name.

John Stankey

Stankey said that over the next 18 to 24 months, a substantial shift will occur in the streaming marketplace as “incumbents” — he didn’t say Netflix — should expect to see their libraries “get a lot thinner.”

“The dynamic those incumbents are playing with are still 75% to 80% of viewing tonnage is (from) that licensed content,” Stankey said. “Their pressure is they’ve got to make this pivot to get people off of viewing content that sits in our library, or the Disney library, and get it onto their own.”
Stankey said WarnerMedia’s rival offering won’t be positioned as a “warehouse,” but instead a service that mines the media company’s “great brands.”

In the course of a 15-minute presentation and then a Q&A session, Stankey gave a few tantalizing new insights about how the company will aim to connect with consumers in the rapidly evolving media landscape. The executive, who spent decades in the AT&T ranks before getting the reins at WarnerMedia and entering the realm of Hollywood, peppered his remarks with phrases like “operational stability” and “software experience.” More than once, he likened the company to a “flywheel,” explaining that AT&T’s distribution, data and programming sides can interlock and benefit each other.

The planned direct-to-consumer streaming service, launching in beta form in the fourth quarter of 2019, will feature three tiers of programming, Stankey announced. It will offer a movie-centric basic tier; a middle level with original content and theatrical blockbusters; and the third with all of the above plus deeper library content, kids-and-family fare and comedy.

Stankey also confirmed that the top tier of the service will likely also feature third-party programming.

“We want the customer to want all three tiers, work their way in at an affordable price point,” he said, without offering any pricing specifics. “Our goal is to build more reasons for more customers to be involved with us.”

In response to an analyst’s question about WarnerMedia’s streaming services, which has included an industry-leading array of offerings, Stankey said a culling has already begun. The media company recently pulled the plug on DramaFever and FilmStruck, though the latter’s Criterion Collection titles were later restored after a cinephile backlash.

“You’ve seen some announcements about shutting down certain direct-to-consumer offerings that were more niche,” Stankey said. “We get to the place where we can put the bulk of our library where we can focus and build.”

Citing company research about entertainment and communications spending, Stankey said households spend an average of $300 a month — half of which is devoted to entertainment. With linear consumption dropping from 95% a decade ago to 55% today, Stankey said it is more important than ever to use new platforms to deliver WarnerMedia’s signature properties, which include CNN, HBO, Turner and Warner Bros.

“We understand this brand has to be good enough to be part of the essential consideration set when consumers are spending $150 a month,” he said.

This article was printed from https://deadline.com/2018/11/warnermedia-chief-john-stankey-our-flywheel-approach-will-prevail-netflix-library-gets-thinner-1202511357/