AT&T banks on bigger HBO, new streaming services and ad tech

John Donovan, CEO of AT&T Communications, discussed plans for expanding product availability and functionality around DirecTV. (Mike Mozart/Flickr)

During a marathon earnings call Tuesday, AT&T shed new light on its plans to spend more on content at HBO, launch new streaming services and grow revenues with ad technology.

The discussion during the call focused on AT&T’s massive $85 billion Time Warner acquisition and smaller acquisition of ad tech firm AppNexus. AT&T CEO Randall Stephenson talked up the opportunities around combining Time Warner’s content, AT&T’s 170 million direct-to-consumer relationships and targeted ad tech with AT&T’s various distribution networks.

“We've now assembled the key elements of a modern media company, and it all begins with owning a wide array of premium content because we are absolutely convinced that there is nothing that drives customer engagement like high-quality premium content,” Stephenson said during the call.

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John Stankey, the CEO of newly dubbed Warner Media, said he wants to carry on HBO’s reputation of being “synonymous with quality entertainment” but also expand the slate.

“We want to increase our investment in premium content…Our goal is to give the HBO team the resources to greenlight additional projects already in the development funnel. We want to invest more in original content while still retaining the high quality and unique brand recognition of HBO,” Stankey said.

He said AT&T’s hopes to further strengthen the HBO brand, enhance the customer experience, improve churn and drive more engagement.

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Stankey said AT&T also plans to further development and nurture its direct-to-consumer distribution including HBO Now, aggregate and incorporate more Warner Media intellectual property and explore international markets and ways to increase value of content globally.

“Obviously we’re very early in the game when it comes to implementing our plans but we’re off to a good start and look to quicken the pace as we move past close,” Stankey said.

Along those same lines, John Donovan, CEO of AT&T Communications, discussed plans for expanding product availability and functionality around DirecTV.

Following the recent launch of Watch TV, AT&T is focused on launching a new premium streaming product that will give the full DirecTV experience over any broadband network. He said it will have improved search and discovery, and an enhanced user interface. It will complement AT&T’s top-end product for those who don’t want or can’t have a satellite dish.

Donovan said that over time, the new DirecTV Now platform will bring new advertising and insight opportunities.

That type of new expanded functionality should interest Brian Lesser, CEO of AT&T’s advertising and analytics business. Lesser spent his part of Tuesday’s call discussing AT&T’s plans for building targeting and measurement capabilities to add value for consumers and marketers.

“Content, distribution and data must be integrated on a best-in-class ad technology platform. That’s the rationale for our recent announcement to acquire AppNexus. This is an independent ad marketplace supported by the best talent in the industry,” Lesser said.

Though the AppNexus deal will be a catalyst for AT&T, Lesser assured that his company is not starting from a standstill. He said AT&T advertising and analytics and Turner have already been using data and technology to fuel growth, and that AT&T’s ad and analytics business is already hitting double-digit revenue growth, including 16% growth in the second quarter.