AT&T hosted its first earnings call since closing its deal to buy Time Warner from the New York City headquarters of its acquistion, now called WarnerMedia, shedding a bit more light on the strategy for the combined company.
AT&T CEO Randall Stephenson once again referred to the telecommunications giant he leads as a "modern media company" that is looking to reinvent content distribution and TV's ad model.
The hour-and-a-half conference call featured prepared remarks from Randall along with WarnerMedia CEO John Stankey; John Donovan, CEO of AT&T Communications; Brian Lesser, CEO of AT&T's advertising and analytics division; and Lori Lee, CEO of AT&T's international division and global marketing officer.
Here are some of the highlights:
Stankey addressed a New York Times report on comments that he made during an HBO town hall meeting earlier this month. During that meeting, he said he was looking for HBO to grow its subscriber base and program more hours of content, generating concerns that the premium pay-TV channel would turn into a content mill.
But on the call with Wall Street analysts on Tuesday afternoon, Stankey said that impression was wrong.
Stankey said he is looking to increase investment in HBO's premium content by greenlighting additional projects already in the development funnel.
"There are a tremendous amount of great projects already in funnel" that HBO hasn't been able to say yes to because of "constraints on resources," Stankey said. AT&T is looking to "open up those contraints."
That will allow HBO to create a more consistent schedule and drive down consumer churn, Stankey said. He declined to say how much more AT&T would spend on HBO originals.
In addition to HBO, the WarnerMedia portfolio includes TNT, TBS, Cartoon Network, CNN, TruTV and the Warner Bros. studio.
When it comes to advertising, Lesser, who previously served as GroupM's North America CEO, said AT&T will use its data to add value to Turner's ad inventory in the near term. But plans to target ads to specific households, a tactic called addressable advertising, won't begin to be recognized until 2019 and beyond.
Lesser said over the next year AT&T will introduce new ad products to improve the consumer experience. That could include TV without traditional ad breaks but icons that drive viewers to mobile experiences that are tailored to them.
Lesser's ultimate goal is to create an advertising marketplace that incorporates both TV and video inventory and uses data to improve the ad experience for consumers and efficiency for advertisers. But he will need the help of rivals to fully realize that plan.
AT&T lost 286,000 satellite TV customers during the second quarter, while its internet-delivered service DirecTV Now gained of 342,000 subscribers, bringing its total user base to 1.8 million.
