hubris

Poor preparation. Bad UX and branding

The same way the DirecTV deal went wrong. They thought people would bundle services with little to no discount for doing so, and wanted to make the cheapest content possible.

Stankey’s vision for content was 5-10min episodes that people would watch solely via their phones. Old people assuming that they understood trends.

And Randall Stephenson made bad decisions at every turn. This is the company that threw away a huge head start in the Live TV streaming business.

EDIT: Former AT&T employee who heard Stankey’s plan direct from his mouth btw. Not pulling this from my ass.

One of the more publicized stories on this from Stephenson, albeit very much on the Stankey train at the time: https://www.fiercevideo.com/broadcasting/at-t-ceo-cutting-game-thrones-episodes-to-20-minutes-would-improve-mobile-experience

Looks like they tried to replicate Netflix too fast. At least one unforced error was cutting of multiple lucrative licensing deals to shove everything onto HBO Max because they thought it would drive an almost unfathomable number of subscriptions. But that’s not how these new streaming services work in relation to audience and I think a lot of people were more frustrated by the loss of their favorite shows rather than compelled to follow them to HBO Max.

As someone who worked at AT&T for 5 years, I can attest that this company can do absolutely nothing correctly.

This picture is so satisfying

Totally disagree. The Direct TV deal was an absolute disaster that cost AT&T tens of billions. AT&T made back most of the money they spent on WarnerMedia either through the divestment or via revenue through the ownership period. The two deals are totally different. Neither good but only one an outright disaster.

Stankey’s vision for programming was cheap and short-form content? Funny how none of that was what happened under his leadership. HBO got their budget increased and delivered more volume and awards quality shows than any other period in their history. It was the same story in terms of budget and volume at the broadcast network The CW. It was a similar tale at Warner Bros TV where output was at an all time high. You can criticise the money spent by Stankey but one absolutely cannot question the commitment they made to producing scripted content throughout the company. Hell, Zaslav’s main criticism is that the company was spending far too much on content! His reasoning being they could make a similar revenue and far more profit producing significantly less content.

AT&T dumped Warner to get rid of debt and boost short term quarterly numbers. It was an easy choice as media companies transitioning from linear to streaming is proving expensive in the short term and even long term it has become clear to all that thanks to Netflix, Amazon, and Apple being players in the market that the profit levels in streaming are just not going to be the same as they were in linear. AT&T cut WarnerMedia as it was only ever going to be a declining asset. Nobody can change that.

Really deflated the “Zaslav is satan” arguments I’ve seen parroted around these parts but that would require ppl actually readin the article

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The disaster that Discovery is causing will dwarf AT&T's missteps.

Instead of asking "How did AT&T $100 Billion Time Warner Deal Go So Wrong?" What we should be asking is "Is it possible for AT&T to do anything right?"

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Because they are all MBAs.

I paid for HBO Max (before that, HBO Go, and HBO Now) until the merger, then got it for free as a perk for being an AT&T customer, as I had been for a decade already. So all the move did in my case was remove a paying customer from HBO.

When I was working at Cingular wireless and AT&T let go of our amazing leadership the company started going to hell. If they had let us keep our upper management and remained apart from their meddling Cingular world be more dominant that all other carriers and would have ensured all of their customers would cared compared to now.

They weren't even able to do their evil net neutrality plans

Same with AOL deal with the same company. The incompetent telecom giant thought that can actually douse ISP data to determen on what Bugs Bunny and Batman advertise.

Everyone knew this deal was a shit show from the start.

you sell cell phones at an at&t retail store

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ITT Redditors don’t read the article and think they understand business.

Excellent answer. Most people in this thread wildly misunderstand the situation

Because they are a telecommunications company that tried to rush into a creative business

You sell seashells by the seashore

Lol, well, as someone who has never worked there I was already suspecting that. And I don't even live in the US.

Damn, this is tough to read.

I hope Elon Musk will buy Warner Bros-Discovery /s

The problem people on this sub generally have is that they equate "I didn't get the entertainment outcome I wanted" with "this is bad business"

hubris

I can tell you know nothing of the MBA

Funny, I read that first section, and I think I want to work for Mr. Stankey. Was that part supposed to make him look bad? And you know, they paid way too much, more than it was worth and more than they could afford. Recipes for disaster.

Lol that's not what happened at ALL. Cingular actually BOUGHT AT&T Wireless from the old bankrupt AT&T and then took their name. Orange overtook Blue.

Isn't that how it worked with Disney+ though? They've done precisely the same thing as HBO Max

I’m sure your business understanding of this situation is legendary

stick to Tekken little boy

Yes but in this case Disney had multiple other revenue channels to subsidize their undercutting of competing streaming apps. ATT was losing cable subscribers and simultaneously cut off revenue channels on streaming. And HBO as a brand never had the widespread appeal that Disney did.

Because Musk wasn’t involved?

Naw because it’s midnight type of dark at 6:03pm. I was bout to get ready for bed.

This kind of thing happens often when a company with a niche decides it's going to try and expand into a different industry by acquiring a company. There's a lot of unwritten rules you have to adhere to and a culture that you have to respect.

With Hollywood, it's incredibly unionized.... except for CGI and VFX.... which is really the only aspect of a Hollywood film that you can really meddle with costs without getting in trouble. Actors, directors and producers all want their cut and after RDJ earned $250M off of Marvel Studios.... everyone wants a bigger cut.

Then comes in AT&T who want to transform Hollywood into a premium streaming experience and absolutely shocked that all the actors and directors want a theatrical release and would prefer it to the guarantees of streaming money.

I literally brought this up to my gf today. It just don’t make sense man! They controlling the sun! We in a dome!!!

Even after helping install their patsy Pai as head of the FCC and bribing Trump (by way of his former lawyer)

Disney+ also recently posted a $1.5 billion loss. It's only because Disney is capable of counteracting that loss with their other business ventures that they're able to sustain it. Even so, Disney+ is increasing its subscription price and introducing an ad tier.

This article from a couple weeks ago goes into further detail.

You appear to be very upset by this AT&T criticism. Did they raise you as an infant?

The way I like to describe that kind of company:

They go out of their way to do it wrong.

I have a friend who worked there 20 years. He agrees.

Seems odd to make this claim when the actual issues under AT&T was that Warner was creating too much streaming content.

Lobbying ?

AOL bought Time Warner, Verizon bought AOL, Verizon was GTE and Bell Atlantic, the latter of which was originally part of AT&T

AT&T: Make Bajillions of Dollars for decades in multiple countries

Some Redditor: lol they can't do anything right!

The AT&T that exists today is not the same American Telephone & Telegraph of the past. The original company was broken up in the 80’s creating “Baby Bells” that over time grew and reformed to the point that the current AT&T is just Southwestern Bell (or SBC) with a whole bunch of regional Bell companies under its control.

Worked on the government review, and the shitshow behind the scenes is even more epic!

Only surprised they dumped them so quickly. I had the over/under at another 4 years.

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While I'm sure no net neutrality is relevant in some negative way somewhere I feel like in retrospect it is fair to say Reddit really overhyped that one

It is not, allowing Comcast who owns peacock, they can throttle literally any other vendor or service. Just because they aren't doesn't mean it's not in the works

This is the real question. The reason for this is simple. AT&T’s primary business is competing for wireless customers against other wireless companies in a government mandated cartel(there only so much wireless spectrum the government can set aside for cell phone communications). Their profits are inflated because they only have 2-3 competitors. It’s a dead easy business to make money on. When you have a company that has a monopoly and makes a profit, it doesn’t matter who you promote, as long as the fundamentals of the business don’t change, you’re basically sitting back and cashing checks. The problem is that people don’t like to sit back and cash checks. They think they have to reinvent the wheel in order to be successful. These incompetent managers think they are smart because they make a profit, and that leads them into a lot of trouble.

Time Warner was absolutely terrible in its own right, so a combination of the two was never going to be good.

Same, and even longer. I do think they can do things correctly, but upper management doesn't think making a nice healthy profit and providing a quality service is a solid plan. They want to make Apple money but they were too fucking stupid, 'hey let's get in on this thing all the kids are into" 5 years after it's a thing.

He is absolutely a shitty executive

My experience with AT&T is that the culture was one of kingdom building. Departments were pitted against each other and the management of each of those departments treated them as their own selfishly guarded fiefs. No cross collaboration, all decisions made in a vacuum, and the focus seemed to be more of "is this good for my department" instead of "is this good for the company".

As an example, there was a contract for a routing system that was about to expire that was roughly $7 mil/year. With the reduced labor costs and efficiency that the system provided, it was saving the company as a whole over $100mil/year. Seems like a slam-dunk renewal. But the department head wanted to cut his costs, so he decided not to renew and instead shut the whole thing down, going back to manual routing. His reasoning? "I don't care about that $100 mil. That's corporate money. I need to cut costs in this department and that $7 mil is an easy choice".

Anecdotal example, but from my experience it was like that pretty well across the board. There doesn't seem to be any true central leadership. It's more like a confederation of city states that is loosely united under the CEO but not really taking any direction from that high up. Maybe they're too big?

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The streamer atrioc had a good video about this. Basically the ceo that did the new movies at home that got fired actually did his job but company basically thought they could just buy HBO and not actually spend money and just have the name

That explains why they had multiple live TV services that competed with each other for a while there. It’s got to be something more complicated than just being too big. When AT&T (the old AT&T that went defunct in 2006) was at its biggest and most monopolistic, it also ran one of the country’s most innovative R&D laboratories, but they kept that technology tightly in their grip except when government regulators forced them to loosen it.

The smartest regulations that the government imposed on them are the ones that forced AT&T to stay primarily as a telephone operator and not get into new industries, because that allowed competitors to come into existence and not be squashed out of existence immediately. For example, a court order that disallowed AT&T from entering the computer business made it so that AT&T could only profit off of UNIX by licensing the source code out to others as a trade secret, allowing computer scientists to learn from and build off of the development that AT&T funded. Then those people built their own UNIX-compatible operating systems, and that’s how we got FreeBSD and Linux, which are used as the basis for every mainstream operating system today (except windows). So because of smart regulation in the 70s, businesses today can reuse that free code, rather than starting from scratch, making modern businesses more efficient. That turned out to be more meaningful than even the breakup of the Bell System

Then Blue bought BellSouth and took back what Orange bought

AT&T is just a graveyard of dead tech companies. They will never go away with the hooks they have

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What, specifically, is not going well in your opinion?

Exactly. Every single decision Zaslav has made so far has been an excellent business decision. The problem is it’s not favorable to people wanting a shitty straight-to-streaming capeflick with atrocious test scores and TWO $100-200m budgeted esoteric sci-fi series with poor ratings.

We is not in no goddamn dome

Free market capitalism? Oh no no no must be the kids or something

Unpopular opinion, but using someone's post history to shit on them is good.

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Don't follow streaming, but Zaslav mentioned that HBO spent 7 billion and lost 3 billion last year. And if we are heading into a recession where advertising is cyclical, can see ad revenue from WB crater. I've been saying streaming is a shitty business - it meets Buffett criteria of the worst type of business.

https://www.cnbc.com/2022/11/15/ad-market-worse-now-than-during-pandemic-lows-david-zaslav-says.html

That doesn't excuse Zaslav. Haven't been following what he's been doing.

Same. Worked for their digital life division. They did everything they could to fuck that up.

“Under any informed measure, our ownership of Warner Media was accretive" I like the word. Seriously, all of these companies need to quit merging.

Simple. AT&T is shit and so is Time Warner.

And why is their cell service SOOOO sh!tty?

They can’t do anything right.

Is that why there’s no safety railing on the Death Star?

Let Atrioc tell you.

I bet they sold more than $1.5 billion in Baby Yoda merch alone.

Terrible? Turner Classic Movies, The Cartoon Network, HBO, Warner Brothers, DC. There is a ton of great brands and IP that came with that company.

I know you all hate haring this but WB/HBO were horribly managed. HBO has been bleeding money for years, again because of bad management.

You’re right this COULD be the most optimal time line.

As a shareholder, this was brutal to read. Most of it isn’t new information but ffs…there are two more exposés worth of content in the DirectTV debacle and the whole digital advertising vision. The article didn’t even mention how AT&T’s free cash flow went from $22M to $13M today. And then Stankey is still running the place after cutting the dividend in half. The guy couldn’t fall on the right strategy if it was on the floor and he was dangling on a fishing line above it.

Everyone does a two week rotation on the beam.

Even that guy you responded to didn't get it fully right:

Here's the reason Stankey's vision wasn't realized; someone else was hired to lead it

Say, who runs Digital Life these days?

No idea. Iirc Att sold it in Connecticut about 5 years ago.