We’ve noted more than a few times that media and streaming execs are all out of original ideas. Now that the market has saturated and subscriber growth has slowed, streaming companies have decided to stop giving the public what it wants (few restrictions, low prices, better quality content) in order to provide Wall Street with the illusion of impossible, endless quarterly growth.
Instead they’ve started focusing on brand cannibalization efforts that have devastated the traditional cable sector: pointless and harmful mergers, price hikes, and the imposition of annoying new nickel-and-diming restrictions. Their latest big idea is the imposition of even more advertisements, or even higher fees to avoid them.
Warner Brothers Discovery’s “Max” has, of course, followed right along, stuffing fifty-percent more commercial breaks into each program in its ad-based tiers. We noted when this trend emerged that Wall Street demands for impossible quarterly revenue growth would mean these companies wouldn’t be able to help but push their luck, so this sort of thing is right on cue:
“A support page for Max’s Basic with Ads plan says to expect six minutes of ads per hour, a 50 percent jump. And despite its original promise not to show ads during HBO programming, Max has been breaking up HBO shows with commercials as well.”
Max originally promised “a commitment to the lowest commercial ad load in the streaming industry.” But, like Amazon, those promises were utterly worthless. Very cool. Very innovative.
As Ars Technica notes, this is steadily eroding the value of streaming. And there’s more enshittification to come. Linear TV still reportedly shows 13 to 16 minutes of commercials per hour, so there’s still plenty of runway for these execs to make their services shittier and erode their own quality standards further. At which point you’ll absolutely see a surge in piracy that these execs will blame on everything but themselves.
By 2026 or so you should see a lot of resurgent industry whining about piracy, followed by terrible industry ideas to try and “fix” a problem they created; like lobbying Congress for a ban on VPNs, or working even harder to kick poor people off of their broadband connections for downloading a TV episode.
We’ve noted in detail how the AT&T/Time Warner/Discovery mergers have been an apocalyptic mess that aptly demonstrates the U.S. obsession with utterly pointless megadeals and the “growth for growth’s sake” mindset. Hundreds of billions of dollars later and the companies have produced a product that’s notably shittier than when they started, laying off thousands of people, cancelling popular shows, and leaving the company’s catalogs with new, weird gaps due to a refusal to pay residuals.
You’ll recall that this all began with AT&T’s disastrous $200 billion acquisition of Time Warner and DirecTV in a clumsy bid to dominate the video ad space. When that failed, AT&T spun off Time Warner, which was quickly merged with Discovery in yet another deal that’s been almost as bad for employees, consumers, and creators.
“Dropping HBO from the name is cementing that ‘we’re not just a home for premium programming,’” Ms. Alexander said. “‘We’re the home for anything you want to watch.’”
The HBO brand has been synonymous with quality for fifty years. But the shift away from quality to low quality mass consumable dreck began under AT&T in 2018 and continues here. Just a continuing array of strange branding and marketing from a team of executives that have, at absolutely no point, indicated that they have any idea what they’re doing or what users want. And it shows in the ratings:
According to Nielsen, 1.3 percent of the total minutes spent by Americans using television was with HBO Max in February, a fraction of what YouTube (7.9 percent), Netflix (7.3 percent), Hulu (3.3 percent) and Amazon Prime (3 percent) garnered. HBO Max instead finds itself in the same neighborhood as Comcast’s Peacock and the Fox Corporation’s free advertising-supported streaming service, Tubi.
Keep in mind, that under AT&T this company integrated so many different dumb streaming branding names that they confused even the company’s own support employees. Now, what’s left of the company is further distancing itself from the popular HBO brand, launching a $16 a month streaming service just called “Max” sometime in May or June. HBO will continue to exist as a cable channel, for however long cable channels continue to exist.
It can’t be repeated often enough that this entire megamerger saga, from AT&T to now, involved companies spending burning hundreds of billions of dollars to make a worse product, fire untold people, cancel numerous popular programs, and even kill Mad Magazine.
Now maybe this whole gambit works out, and offering lower-quality dreck (I think often about the “Ow, my balls” TV show in Idiocracy for some reason) really works out for them. But I still tend to think its a lovely demonstration of the idiocy of pointless megadeals, which routinely harm consumers and creators so some unremarkable MBAs can get a tax break and put “savvy dealmaker” on their resumes.
We’ve already noted how HBO and Discovery executives keep demonstrating the immense, pointless harm of media megamergers. You’ll recall AT&T’s $200 billion acquisition of Time Warner and DirecTV wound up being a hot mess, forcing AT&T to take a huge loss and run for the exits after laying off more than 50,000 employees.
The subsequent spin off of Time Warner and merger with Discovery wound up being no less stupid, resulting in executives that have been busy laying off even more employees, killing promising shows, and removing popular content from the HBO Max catalog because executives at the new company were too cheap to pay writer and actor residuals.
Now after annoying subscribers for months and making their end product decidedly worse, Time Warner/Discovery executives are doing the next obvious thing: raising prices on HBO Max subscribers:
The cost of HBO Max without commercials will rise almost 7% to $15.99 a month from $14.99 starting Thursday, the streaming service’s owner, Warner Bros. Discovery Inc., said in a statement. That makes the product slightly more costly than Netflix Inc.’s standard, $15.49-a-month plan. Both companies now offer cheaper ad-supported tiers.
The increase “will allow us to continue to invest in providing even more culture-defining programing and improving our customer experience for all users,” the company said.
Except the customer experience has gotten worse. And the company has removed a parade of popular content from its lineup, making this rote justification more hollow than usual. Hundreds of billions of dollars were spent in a series of completely pointless mergers and acquisitions whose only function was to cut taxes and boost executives compensation and resumes.
Now company executives are busy insisting that the low pricing in the streaming sector needs to come to an end after wasting countless millions in doomed M&As for the better part of several years:
At an investor conference last week, Gunnar Wiedenfels, the chief financial officer of Warner Bros Discovery, said streaming services “are priced way too low.”
“There was this partly capital market-fueled phase of land grabbing, you couldn’t lose enough money and couldn’t grow subscribers fast enough,” he said. “I think that’s behind us.”
The problem: you don’t really get to make those blanket proclamations in markets that are actually competitive. A main reason consumers flocked from traditional cable to streaming was due to cost. Eliminate that benefit and you wind up driving those users either back to traditional cable, or toward piracy. At which point, these same executives will blame everyone but themselves.
You might recall how AT&T spent nearly $200 billion on megamergers thinking it was going to dominate the online video advertising space. But after spending a fortune on DirecTV and Time Warner, laying off 50,000 people, and killing off popular properties like Mad Magazine, it quickly became clear that AT&T executives had absolutely no idea what they were doing.
That forced AT&T executives to spin off Time Warner for a loss, triggering yet another disastrous and pointless merger between Discovery and Time Warner. That in turn has created all manner of additional problems as cheapskate Discovery executives attempt to cut even more costs by firing thousands of additional employees, and cancelling a parade of popular shows.
But execs have taken things even further by pulling huge swaths of popular content off of their flagship streaming service, HBO Max, simply because they were too cheap to pay royalties to the actors and writers who created them. That’s resulted in a long line of shows (from Westworld to Euphoria) being pulled off the Internet (driving people to piracy if they want access).
It’s resulting in a pockmarked HBO Max lineup that’s notably shittier than ever, with entire seasons of classics like Sesame Street, Looney Tunes, and The Flintstones simply disappearing from the Internet. In some cases, I’ll note, because the company didn’t even want to pay itself (I shit you not):
Variety explains that these shows were licensed to HBO Max by Warner Bros. (once more for those in the back: THAT COMPANY OWNS HBO MAX), but the streaming service reportedly decided not to renew those licenses (with ITS OWN COMPANY) to save money. That’s in keeping with Warner Bros. Discovery’s crusade against animation and animators, with WBD boss David Zaslav having already gutted his company’s cartoon offerings earlier in 2022.
Where are customers going to go when they can no longer find any of this content? Piracy, of course. At which the entertainment industry will, as is tradition, blame everyone but itself.
It’s just so perfectly demonstrative of the absolute pointlessness of our obsession with megamergers, “growth for growth’s sake,” and “dealmaking for dealmaking’s sake.” Hundreds of billions of dollars exchanged in a completely pointless dance, resulting in little more than a parade of layoffs and a demonstrably shittier end product.
All so a handful of executives and investors could enjoy some short-term tax breaks and compensation boosts at the cost of the company’s long term health and longevity. Super innovative stuff.
Remember when AT&T spent more than $200 billion to acquire Time Warner and DirecTV in the belief it would help the telecom dominate video advertising? Then remember when company leadership was so monumentally incompetent they had to run to the exits in terror? Good times.
After AT&T’s gambit fell apart, the company returned to what it’s best at (lobbying the government to crush broadband competition), and spun off Time Warner into an entirely new company, Warner Media. Warner Media then immediately turned around and announced a blockbuster merger with Discovery, creating the creatively named Warner Brothers Discovery.
And it’s all going just about as well as most major media mergers go. As in, not well at all. At least not for consumers, employees, and creators, anyway. I’m sure lawyers, bankers, executives and investors are all pleased as punch by this cavalcade of colorful misery.
Hoping to prove the amazing synergies of the deal, the freshly merged company has been consistently cancelling shows and pulling any show from its streaming catalog (like many episodes of Sesame Street) because it’s too cheap to pay residuals.
Wiedenfels suggested the company had ample room to raise prices given the strength of content on the services, which will be merged into one next year.
And then of course there are the inevitable layoffs, which pre-merger executives usually insist aren’t going to happen, right before they do. Axios, in its usual “he said, she said” approach to journalism, notes that the company is preparing for yet another round of head-lopping thanks to inflation:
Hundreds of people are expected to be laid off on the business side of Warner Bros. Discovery, via a round of layoffs that will begin Tuesday, sources tell Axios.
Why it matters: Executives have warned for months that the merger between WarnerMedia and Discovery would yield roughly $3 billion in synergies. Rising interest rates and a weak macro-economic climate has put pressure on media companies to be more disciplined about costs.
Of course it’s not really inflation, it’s that US media megamergers are often completely fucking pointless, outside of short-term stock fluffing, tax write offs, and preposterous boosts to executive compensation. Axios forgets to mention that this is pretty much what always happens with a major US telecom or media megadeal, despite pre-merger claims that deal synergies will border on the Utopian.
Remember, this all began with AT&T’s $200 billion disaster (which came with plenty of its own layoffs, axed projects, and chaos), which the press has already forgotten about. Since then, the whole pointless series of mergers has simply gotten more pointless. Yet if you dig through US press coverage, you’d be hard pressed to find many outlets willing to call this giant, pointless turd of a deal what it is.
You have to head over to smaller, independent news outlets to find anybody being honest about what a shitshow this deal is. Ironically, busted journalism and the merger itself are both in large part thanks to our mindless obsession with consolidation and megadeals that make no coherent, practical sense. It’s all one problem, and Americans are violently dedicated to doing absolutely nothing about it.
If you recall, AT&T spent nearly $200 billion on megamergers thinking it was going to dominate the online video advertising space. But after spending a fortune on DirecTV and Time Warner, laying off 50,000 people, killing off popular properties like Mad Magazine and DC’s Vertigo imprint, it quickly became clear that AT&T executives had absolutely no idea what they were doing.
After stumbling around drunkenly for a while, AT&T returned to what it’s best at (running broadband networks and lobbying the government to crush broadband competition), and spun off Time Warner into an entirely new company, Warner Media. Warner Media immediately then turned around and announced a blockbuster merger with Discovery, creating the creatively named Warner Brothers Discovery.
If you’re a consumer or employee at any of these brands and companies, the last few years have proven to be a befuddling mess. Remember that the AT&T acquisition of HBO and Time Warner resulted in so many different brands it even confused employees at AT&T. Despite efforts to consolidate content, it’s somehow only gotten dumber since then.
Managers at the new company have taken a hatchet to HBO’s offerings in particular, culling a wide variety of popular content to cut costs. That includes roughly 200 episodes of popular shows like Sesame Street and dozens of films and shows overall. Why? In part because the new consolidated company doesn’t want to pay residuals in a bid to make deal financials make sense:
While HBO Max already paid for the production of these shows, it’s still on the hook for residuals, including so-called back-end payments to cast, crew and writers, based on long-term viewership metrics.
By removing these films and shows, especially the ones HBO Max created rather than licensed, executives can cut expenses immediately. Warner Bros. Discovery has promised at least $3 billion in synergies stemming from the merger of WarnerMedia and Discovery, announced in May.
Ah, megamerger synergies.
There’ve been several new additional casualties thanks to this latest series of mergers, including TBS’s Full Frontal With Samantha Bee (Turner and TBS merged with Warner Brothers way back in 1996). With the merger of HBO Max and Discovery+, they’re hoping to “declutter” what’s now just a discordant parade of content, much of which executives didn’t really even want. There’s also been just a steady parade of layoffs of employees they didn’t want either.
HBO employee John Oliver went so far as to call this final form version of HBO Max little more than a “series of tax write offs”:
John Oliver taking another shot at his new parent company Warner Bros. Discovery for removing shows from HBO Max without warning all in the name of tax cuts… pic.twitter.com/53dPr4uVwn
Again, this is just another example of the U.S.’ harmful obsession with megamergers, consolidation, purposeless (outside of stock fluffing) deal making, and growth for growth’s sake. All of these deals make perfect sense to the executives, lawyers, and accounting magicians exploiting them for tax breaks and various financial benefits, but that doesn’t make this whole saga any less preposterously pointless.
Employees and consumers certainly didn’t benefit from this idiotic parade of events that began with AT&T wasting hundreds of billions of dollars to buy companies it was too incompetent to run. And somehow the saga has only gotten dumber since then.
To be clear, AT&T has no shortage of nasty habits, whether we’re talking about how the company routinely does too little to thwart criminals eager to rip off AT&T customers, or the way it can routinely be found hoovering up taxpayer money in exchange for, well, less than nothing. But one thing the company did get correct (or at least more correct, more quickly than other counterparts in cable and TV) was that streaming was the future.
Most cable TV companies refused to fully embrace streaming, worried they’d cannibalize existing traditional cable revenue and thinking they could milk a dying cash cow forever. AT&T jumped in with both feet early on, launching a dizzying array of different streaming services. Sure, AT&T then proceeded to lose seven million pay TV and streaming customers in just three years thanks to a series of bone-headed mergers, rate hikes, and idiotic branding choices, but its original instinct to get out ahead of the problem was the right one all the same.
Earlier this month, AT&T announced that Covid had forced it to effectively put a bullet in traditional movie release windows, resulting in the company releasing new Warner Brothers films on streaming the same day they’re released in theaters. It’s obviously a necessary response to an unprecedented threat, and it comes with some caveats. One, it’s only a one-year trial. Two, movies will still hit theaters. Three, you’ll probably pay more for home viewing than is sensible. It’s likely a temporary shift in tactics that’s geared as much toward goosing lagging HBO Max subscriptions as it is public safety.
Still, the decision resulted in no limit of consternation in Hollywood, which was already sore about AT&T’s steady parade of layoffs at Time Warner properties (HBO, DC) it acquired in 2018 (promising no limit of amazing synergies), and the general annoyance of having bumbling telecom executives stumbling around a more creative, competitive sector than AT&T’s used to. Director Christopher Nolan was particularly pissed off:
“Some of our industry?s biggest filmmakers and most important movie stars went to bed the night before thinking they were working for the greatest movie studio and woke up to find out they were working for the worst streaming service.”
Ouch. For a company that’s struggling to keep pace with the likes of Amazon, Disney, and Netflix, that’s not exactly what you want to hear. Nolan’s biggest gripe is that AT&T, in a rush to drive HBO Max streaming adoption and please Wall Street, doesn’t really understand what it’s dismantling as it works to pivot from brick and mortar releases to the virtual world:
“Nolan said that the Burbank, CA lot was ?dismantling? an ideal distribution system between theaters and homes ?as we speak. They don?t even understand what they?re losing. Their decision makes no economic sense and even the most casual Wall Street investor can see the difference between disruption and dysfunction.”
Of course this being Hollywood, a chunk of this is just errant hyperventilation. Hollywood has long despised any attempt to disrupt the traditional movie release window, despite the fact it’s an antiquated construct that doesn’t make a whole lot of sense during the broadband and streaming era. This is not an industry that takes change or disruption particularly well, and that’s pretty well evident here.
But it would be a mistake to suggest this is entirely just Hollywood being afraid of change, and Nolan’s not entirely wrong.
Having written about AT&T for twenty years I can assure you the company doesn’t really know what it’s doing in the entertainment space. AT&T’s good at two things: running networks and lobbying the government to kill competition. And while it tries to hire competent entertainment-sector executives (like Warner Brothers Chief executive Jason Kilar) those executives will, sooner or later, run up against rigid-minded executives from a government-pampered telecom monopoly that don’t really understand (or care to understand) how creative ventures work.
That was reflected in AT&T’s early streaming headaches, it’s reflective at the consternation at HBO and DC Comics, and it’s also apparent here. Despite a lot of pretense to the contrary, AT&T is making it up as it goes along:
Nolan claims AT&T didn’t really bother to fully consult with Warner Brothers folks before undergoing such a massive pivot, one that’s going to hit union employees particularly hard (something I’d wager, based on its history, AT&T’s not too broken up about):
“The director called the decision by WarnerMedia, owned by tech giant AT&T, as devaluing billions in film assets ?by using them as leverage for a different business strategy without first figuring out how those new structures are going to have to work, it?s a sign of great danger for the ordinary people who work in this industry.”
Dune director Denis Villeneuve was even more blunt in a piece at Variety:
“There is absolutely no love for cinema, nor for the audience here. It is all about the survival of a telecom mammoth, one that is currently bearing an astronomical debt of more than $150 billion. Therefore, even though ?Dune? is about cinema and audiences, AT&T is about its own survival on Wall Street. With HBO Max?s launch a failure thus far, AT&T decided to sacrifice Warner Bros.? entire 2021 slate in a desperate attempt to grab the audience?s attention.”
Again, this is all a bit more complicated than Hollywood being a disruption-phobic baby (though that’s absolutely part of the equation). Everything about AT&T’s venture to dominate streaming has been a convoluted mess, including the $200 billion in megamergers that saddled AT&T with so much debt it resulted in an investor and consumer revolt. So while pivoting hard(ish) to home releases is the right move at the right time, there’s absolutely no indication that AT&T’s the kind of company capable of doing a good, conscientious job at it based on what we’ve seen so far.
In short, AT&T’s right to adapt to the historic health threat at hand by pivoting hard to streaming, but creatives under the AT&T/Time Warner flag are also probably right to worry that a pampered telecom monopoly with a long history of dodgy ethics will do a crappy job at it.
For the last decade or so, U.S. cable TV customers have been plagued by a steady parade of content blackouts as cable providers and broadcasters bicker over new programming contracts. For the end user, so-called “retransmission feuds” usually go something like this: a broadcaster demands a cable company pay significantly more money to carry the same content. The pay TV provider balks, and one side or the other blacks out the aforementioned content. Consumers spend a few months paying for content they can’t access, while the two sides bitch at each other and try to leverage consumer anger against the other guy.
After a while a new confidential deal is struck, customers face a higher bill, and never get any sort of refund for missing content. Wash, rinse, repeat. Over and over again. With regulators largely sitting on their hands as consumers get the short end of the stick.
While some might think the innovative streaming revolution is going to fix stupidity like this, evidence suggests that’s not likely. While a different variety of feud, AT&T and Roku have been in a standoff preventing AT&T’s HBO Max from appearing on Roku devices. And last week, Sinclair-owned CBS stations were pulled from Hulu completely because the two sides couldn’t put on their big boy pants and agree to a new contract without taking it out on paying subscribers:
“Hulu is next in the line of cable providers and streaming services to lose locals due to disputes with broadcasters. Some viewers started receiving scrolling on-screen notices over the weekend, letting them know that their CBS station could be removed from Hulu.”
This being Sinclair’s particular brand of highly partisan, homogenized disinfotainment, many won’t care that they lose access to these networks. Sinclair obviously cares, given that fuboTV, YouTube TV, and SlingTV (Dish Network) removed the company’s costly regional sports channels last year from their own streaming lineups, contributing to a $4.18 billion loss for Sinclair in the third quarter. But this sort of stuff is only going to get more common and probably dumber, as broadcasters relentlessly try to extract more and more money from already frustrated consumers during an historic health and economic crisis.
For years, even Wall Street stock jocks have warned that the broadcast industry’s relentless price hikes simply aren’t sustainable. It’s creating a sort of death loop where broadcasters demand more money, cable companies acquiesce and raise rates, and consumers, realizing they’re better off skipping TV and reading a book or watching TikTok after several rate hikes each year, finally cut the cord. And while competition from streaming has certainly helped the sector in terms of more flexible choices and lower rates, many of the pay TV sectors dumbest and most self-harming tactics are starting to come along for the ride.
That means a steady parade of rate hikes that erode the value proposition of your monthly streaming subscription, and the routine blackouts and disputes that result in you paying more money for content you can’t access. It would be relatively simple for a regulator to bar consumer-harming blackouts during negotiations (or at least ensure consumers are compensated for losing access to content they pay for), but this being a country where consumer protection policy is usually set by industry (which is why there often isn’t any), that doesn’t seem likely anytime soon.
Among the dated and dumb business concepts exposed as folly during the pandemic is the traditional Hollywood film release window, which typically involves a 90 day gap between the time a move appears in theaters and its streaming or DVD release (in France this window is even more ridiculous at three years). The goal is usually to “protect the traditional film industry,” though it’s never been entirely clear why you’d protect traditional theaters at the cost of common sense, consumer demand, and a more efficient model. Just because?
While the industry has flirted with the idea of “day and date” releases for decades (releasing movies on home video at the same time as brick and mortar theaters), there’s long been a lot of hyperventilation on the part of movie theaters and traditionalists that this sort of shift wasn’t technically possible or would somehow destroy the traditional “movie experience,” driving theaters out of business.
The pandemic has changed everything. To the point where AT&T/HBO this week announced that the company’s entire lineup of 2021 films will be released on the company’s streaming platform (HBO Max) the same time it hits theaters. There are some caveats: it’s a one year trial, and movies will only appear on HBO Max for a month before they disappear (though they may return later). You’ll also probably pay far more to watch these movies than it’s worth. But it’s still a sensible shift given the circumstances, as Warner Brothers (AT&T) made clear it a statement:
“We’re living in unprecedented times which call for creative solutions, including this new initiative for the Warner Bros. Pictures Group,” said Warner Bros. CEO Ann Sarnoff. “No one wants films back on the big screen more than we do. We know new content is the lifeblood of theatrical exhibition, but we have to balance this with the reality that most theaters in the U.S. will likely operate at reduced capacity throughout 2021.”
Yes, it sucks for those whose livelihoods rely on traditional brick and mortar theaters. But these are the same theaters that saw the writing on this particular wall long before COVID came to town, and decided to spend much of their time pouting instead of adapting for the inevitable. Even then, traditional theaters will someday bounce back, buoyed by those who feel a trip out to the movies is an essential cornerstone of everyday life. It’s just not going to be until vaccines are commonplace and congregating indoors for prolonged periods is no longer a potential death sentence.
This isn’t exclusively about the pandemic, of course. AT&T has been losing traditional TV and streaming subscribers hand over fist after a bunch of expensive mergers, branding confusing, and other executive incompetence. They’re running behind giants like Netflix and others, and want the added attention. Scuttlebutt also suggests the company is hoping to use the announcement to pressure Roku into carrying HBO Max and ending their longstanding feud:
Either way, it’s another step in the right direction toward no longer embracing antiquated concepts like release windows that no longer make sense in the broadband era. This being AT&T there’s almost certainly going to be dumb caveats tied to these releases (ridiculous pricing probably being among them), but baby steps and all that.
For decades, incumbent broadband and television giants like Comcast and AT&T enjoyed life from a comfortable position of monopoly dominance. If you want to subscribe to broadband, such companies are often your only option. If you wanted to subscribe to television service, you were required to rent a locked down, highly proprietary cable box courtesy of the industry’s cable hardware monopoly. Are you a broadcaster and want to have your cable channel in a conspicuous position in the lineup? Expect headaches. Want to use their utility poles to build a decent competitor? Expect a lot of bullshit.
Natural monopolies are a pain in the ass. Telecom monopolies like AT&T, whose domination spans the better part of a century, are a very particular type of pain in the ass. But with cord cutting and the rise of streaming changing at least part of their business equations, it’s interesting to watch how these giants of yesterday are now struggling to adapt to a new era in which they not only no longer dominate, but often have to collaborate.
Case in point. Before its 2015 merger with DirecTV and 2018 merger with Time Warner, AT&T — a company with a thirty year track record of obvious, documented, monopolistic behavior — told anybody who’d listen that there was simply no way that the company would use the greater scale from its merger ambitions to behave badly.
As AT&T attempts (poorly) to pivot toward the cord cutting generation, the company is suddenly finding itself in an alien predicament: it has to innovate, collaborate, and compete. But with companies like Roku and Amazon now dominating the streaming hardware space, AT&T’s been having a hard time bullying them into carrying its streaming platform. In turn, AT&T has gotten a bit pouty as it tries to explain why, despite all this bullying, posturing, bullshit, and market domination, it still managed to lose nearly 1 million TV subscribers last quarter and nearly four million subscribers in just the last few years:
“AT&T?s chief executive, John Stankey, had some harsh words for Amazon on the earnings call after the report. ?We?ve tried repeatedly to make HBO Max available? on Amazon, he said. ?Unfortunately, Amazon has taken an approach of treating HBO Max and its customers differently than how they?ve chosen to treat other services and their customers.”
Not that intellectual consistency is a thing we do anymore in the United States, but some observers justifiably found AT&T’s whining a bit ironic:
Maybe it’s just me, but a 30 year natural monopoly gatekeeper that just got done lobbying to kill net neutrality rules (designed to ensure AT&T couldn’t abuse its broadband monopoly) pivoting unironically to complaining about unfair treatment is… kind of funny?
The truth is that while Stankey tries to blame Amazon for its predicament, most of AT&T’s wounds are self-inflicted. Despite the company getting a $42 billion tax break from the Trump administration in exchange for doing less than nothing, and despite billions more in Trump administration regulatory favors designed to protect AT&T’s dominance (like neutering the FCC from within or killing broadband privacy rules), and despite spending $150 billion on megamergers to dominate the sector… AT&T’s still losing pay TV subscribers hand over fist.
Why? One, because AT&T’s streaming market entry strategy was such a confusing branding mess, it wound up confusing even the company’s own employees. Two, because the bullying strategies that work in the uncompetitive broadband sector, don’t work in a sector with actual competition, and a need for innovation and collaboration. Three, because AT&T spent $150 billion on mergers, then tried to extract that money from its customers in the form of rate hikes, seemingly oblivious that the entire point of “cord cutting” and streaming for the end users is greater flexibility at lower costs.
The lion’s share of AT&T’s troubles right now are self-inflicted, yet a natural monopoly whining about being treated unfairly does at least bring some much needed entertainment value during these dark times.
