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More Consumer-Direct Content Expected After AT&T/Time Warner Merger

7 Sep, 2017 By: Erik Gruenwedel

Pending Time Warner CEO John Stankey

With global regulatory approval of AT&T’s $84 billion acquisition of Time Warner down to Brazil and the United States, John Stankey, who heads the acquisition process and will replace Jeff Bewkes as CEO of Time Warner post merger, told an investor group to expect greater emphasis distributing digital content direct to consumers after the merger.

Speaking Sept. 7 at the Bank of America Merrill Lynch media, communications & entertainment confab in Los Angeles, Stankey said ongoing changes in the linear television business model driven by over-the-top video mandate changes regarding licensing of content.

“[Licensing cycles] are done for five- and seven-year intervals frequently. And so the ability for that model to adjust to the changing environment is restricted a little bit,” Stankey said.

He said that as content license agreements come up for renewal in the next 12 months, there has to be a greater focus for on-demand content and ubiquitous access for the consumer.

“I believe people know what the solution for that is. And I believe they know what needs to happen to make the product more viable,” Stankey said.

The executive was referring in part to Turner CEO John Martin, Warner Bros. CEO Kevin Tsujihara and HBO CEO Richard Plepler — all of whom have long embraced OTT video and are actively rolling out digital products such as HBO Now, FilmStruck and Boomerang.

Tsujihara in 2016 formed Warner Bros. Digital Networks headed by Craig Hunegs. Recent acquisition includes DramaFever, an OTT venture specializing in Korean movies and TV, and Warner Archive, a SVOD service featuring classic movies that bowed in 2014.

“In today’s on-demand world, OTT gives us a really effective means to directly provide consumers the programming they want,” Tsujihara said last year. “Forming Warner Bros. Digital Networks, we’ll be able to operate more nimbly as we continue to develop and deliver on our digital strategy which will complement our industry-leading distribution business.”

Stankey contends Time Warner senior management going forward understands the importance of rejiggering current distribution models, including employing real-time data and monetizing library content most effectively.

“I don't think you will walk into Time Warner and find that those aren't, front-and-center, topics that people [are] discussing,” he said.

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