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AT&T boss wants to shift TNT/TBS money to HBO.

tall_guy1

tall_guy1

Star Participant
In an effort to compete with behemoth Netflix, Stephenson said he wants to shift original programming money from Turner Broadcasting networks TNT and TBS to New York-based HBO.

“A lot of the content spend is in Turner, specifically TNT and TBS,” he said. “Is that really the highest and best use of capital? Or is it more appropriate and best use to put it toward HBO?”

The two well-established cable networks generated a lot of money for Time Warner, which was recently merged into AT&T. Last year, TNT brought in an estimated $3.4 billion, and TBS about $2.1 billion, according to research firm S&P Global Market Intelligence.

But traditional TV viewership has plummeted in recent years, especially for TNT.

In August, 2018 during primetime, TBS averaged about 1 million viewers, 7th place among basic cable networks, down from 1.4 million in August, 2015 (-29%), good for fifth place at the time.

TNT averaged 687,000, good for 17th place, in August, down from 1.6 million the same month three years ago. That’s a whopping 56 percent drop.

Other comparable basic cable networks lost audience but not to that degree. For instance, HGTV fell from 1.52 million to 1.36 million (-11%) and USA Network dropped from 1.55 million to 1.33 million (-14%)during the same time period.

Coincidentally or not, Atlanta-based TBS/TNT chief Steve Koonin - who lifted both networks to new heights and now run the Atlanta Hawks - left in 2014. Kevin Reilly, who previously worked at NBC FX, and Fox, has presided over the two networks since then. While some of his gambles on TBS have borne fruit such as Samantha Bee’s weekly news satire show and Tracy Morgan’s “The Last O.G.,” he has had much less luck over at TNT.

The hugely popular shows that Koonin worked on such as “Major Crimes” and “Rizzoli & Isles” are gone at TNT. They lacked social media buzz and their audiences were deemed too old.

Reilly’s replacements such as “Good Behavior,” “Animal Kingdom” and the super pricey “The Alienist” are far edgier and draw younger audiences, but only “Claws” has received much social media and critical raves in a very crowded scripted landscape.

Stephenson wants TNT and TBS to start airing HBO reruns to help drive traffic to HBO.

In Stephenson’s eyes, HBO is a far more valuable asset than TNT or TBS given its stellar reputation, array of hot programming and 134 million worldwide subscribers.
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Thoughts?
 
It's the first time I can remember that anyone asked the question. Previously, Turner was run by it's own CEO, and it was the largest part of Time Warner. So they didn't touch the part of the company Ted Turner built. That CEO was eliminated after the AT&T merger, so now they can look across the entire platform towards more efficient operation.

My immediate thought is it will move content creation from free platforms like TBS and TNT to a premium platform: HBO.
 
Let them take her and put her on with the other political commentators on HBO

The sooner she gets off basic cable the better
 
This will make it ever easier for cable systems to drop the Warner Channels or at least be truly willing to walk away if they don't get more favorable terms. They are a pretty weak package. As the article notes, viewing for both TBS and TNT have significantly fallen and the CNN channels are a complete basket case. A cable system could credibly drop these and likely not experience much subscriber loss. So, by all means, move the content to HBO which already has as much or too much original programming and drive subscribers away as you substitute these for movies. I think AT&T bought a real mess!
 
umfan said:
I think AT&T bought a real mess!
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And yet the Turner channels (not Warner channels) deliver bigger profits than the other Warner divisions (movies or HBO).

Once again, all they are talking about here is shifting program development money, not content.

And as the article also points out, most other cable channels have lost audience.
 
How do you know since they don't break it out by station. I doubt you can support that analysis, but if you can, by all means, please do so.

Since development money results in content, how is this not a shift in content going forward?

Considering a premium was paid for distribution which is shrinking, and losing value, it's likely this merger, which may be overturned by the DoJ appeal will prove to be a real dog for AT&T shareholders.
 
umfan said:
How do you know since they don't break it out by station.
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I don't know what you're referring to there, but the TBS division revenues & profits are listed separately and that division is the most profitable of the three. Under old management, each division had its own CEO. Under AT&T it's all under one, so he can shift resources among the divisions. That's what this article is about.
 
umfan said:
This will make it ever easier for cable systems to drop the Warner Channels or at least be truly willing to walk away if they don't get more favorable terms. They are a pretty weak package. As the article notes, viewing for both TBS and TNT have significantly fallen and the CNN channels are a complete basket case. A cable system could credibly drop these and likely not experience much subscriber loss. So, by all means, move the content to HBO which already has as much or too much original programming and drive subscribers away as you substitute these for movies. I think AT&T bought a real mess!
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You are overlooking the fact that TBS has the baseball playoffs in a rotation with FOX, TNT shares the NBA regular season and playoffs with ESPN, and TBS and TNT share the NCAA men's basketball tournament with CBS. Viewers would be up in arms over the NCAA tournament games not being available, so cable systems could not walk away from those stations.
 
NoDakObserver said:
Viewers would be up in arms over the NCAA tournament games not being available, so cable systems could not walk away from those stations.
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That's a good observation, and these are long term deals, so they're locked in for a while.

My take on this is they're trying to establishing recognizable brands for TBS and TNT. So shifting more of the long form dramas to HBO might help solidify brands for all three. The problem with TBS IMO is it's been programmed as though it was still WTBS, on over the air station in Atlanta. They really haven't brought its image into the 21st century, and all the old movies don't help. TNT programs as the comedy channel. But it's not that funny. Then the sports are complete format flips. Some people (like me) never watch either station for anything except for sports. That's not good for them.
 
TheBigA said:
I don't know what you're referring to there, but the TBS division revenues & profits are listed separately and that division is the most profitable of the three. Under old management, each division had its own CEO. Under AT&T it's all under one, so he can shift resources among the divisions. That's what this article is about.
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This is not correct. The former Turner Stations MAY have results broken out, but you couldn't discern TBS and TNT alone from this as it would include the CNN networks. Warner does not break out the results separately. So your assessment is likely not based on any comparison at all, just assertions that have no factual basis.
 
NoDakObserver said:
You are overlooking the fact that TBS has the baseball playoffs in a rotation with FOX, TNT shares the NBA regular season and playoffs with ESPN, and TBS and TNT share the NCAA men's basketball tournament with CBS. Viewers would be up in arms over the NCAA tournament games not being available, so cable systems could not walk away from those stations.
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A useful, and accurate, point, however, I'm not sure it's enough to keep them, at least on the basic tier. They might move them to a higher tier and those wanting the content would have to pay extra for it. The result would be far fewer viewers, and less ad revenue for the stations. The CNN networks could be jettisoned completely. I'm not saying this will, or is even likely, to happen. Only that the less desirable content they have on them makes them less essential to the cable systems. The thought to move the content to a premium channel like HBO could have additional consequences is my point.
 
umfan said:
This is not correct. The former Turner Stations MAY have results broken out, but you couldn't discern TBS and TNT alone from this as it would include the CNN networks. Warner does not break out the results separately. So your assessment is likely not based on any comparison at all, just assertions that have no factual basis.
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I never said it did. Read what I wrote. I said the Turner channels deliver bigger profits. No where do I say anything about the individual channels, but rather the group. So yes, it includes CNN because those channels are included with Turner Broadcasting. No it doesn't break out TBS or TNT. You misunderstand what I'm saying.
 
No, I think you represented something that couldn't be backed up and I noted it is all. Time, and the outcome of the DoJ appeal will determine if this was a wise acquisition by AT&T. I believe it will prove not to be. However, going back to the topic of the OP, if original programming dollars are shifted from TBS/TNT to HBO, this could have an impact on the perceived value of these networks. There are many outlets carrying reruns now. It makes it easy to move these stations to a higher, and less subscribed tier, especially from cable outlets that compete with AT&T. I don't see the NBC channels owned by Comcast as being similarly disposable by AT&T. For one, they get higher ratings than their AT&T owned counterparts and some are covered by 'must carry' rules.
 
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