How Long Will It Take for AT&T To Get Back on Track? Jeff Kagan

Jeff Kagan  |

Image source: AT&T

When AT&T acquired DirectTV, then Time Warner — renaming it WarnerMedia along with Warner Brothers Studio, CNN and the rest — I was not quite sure how it would all work out. AT&T had a good story to tell. It held impressive analyst meetings at Warner Brothers Studio, and all of its activity was moving to change and integrate content with services. It was a stretch, but if it worked, it would change everything.

The last decade saw so many companies heading in a similar direction. Within the last couple months, however, the bubble burst, this new expansion has ended and things are starting to get back to normal.

AT&T and WarnerMedia — like fitting a square peg through a round hole

The last ten years felt like trying to squeeze a square peg through a round hole. It didn’t quite sync.

So, when AT&T recently off-loaded their pay TV business of Uverse, AT&T TV, DirecTV and more, and then spun off WarnerMedia content to Discovery in order to refocus on the core wireless, Internet and telephone business, that was the company getting back on track.

Over the next several years I expect quite a bit of change from both AT&T and Discovery, the new home of WarnerMedia.

If this AT&T - WarnerMedia - Discovery deal were an earthquake, we should expect several aftershocks going forward. After all, when deals this big are done, that always happens.

While this is nothing to be concerned about, it will more than likely happen and investors should be prepared.

Discovery CEO David Zaslav moving into Warner Bros studio

AT&T will focus on its core communications business as 5G reinvents the entire industry. And WarnerMedia, under the ownership of Discovery could also show strength and growth.

In fact, I hear that David Zaslav, Discovery CEO, is focused on expanding the WarnerMedia reach with the acquisition of Warner Brothers Studio, CNN and more.

He said at a Credit Suisse presentation that he would be moving his office onto the Warner Bros lot to be close to the action and where the content is made.

He said this new opportunity starts with the motion picture business and that no other company can open a picture anywhere in the world like Warner Bros can. He will focus on the motion picture business because he sees this as a strategic advantage.

He says that’s where stars are made. It’s true. This is the magic of the Hollywood machine. Stars don’t go to Hollywood to get a TV show or get onto a streaming service. Zaslav says they go to the motion picture industry.

Romantic vision of Hollywood motion picture industry

That sounds like the Hollywood of our childhood. It’s a romantic vision of the way the motion picture business has always been.

In the last decade, however, everything seems to be changing. New technology like streaming services and a wide variety of TV shows and movies distributed in new ways over IPTV are seeing to that.

So, the question is this. Is the romantic vision of Hollywood still valid, or has it changed forever with new technology? Another question: is Hollywood an art or technology?

Is Hollywood changed forever with streaming services and more?

COVID-19 forced a rethinking of the way motion pictures were released. Earlier this year, AT&T launched its simultaneous movie release program on HBO Max and in theaters. Will that new model last or will it revert to the old way of doing things under Discovery leadership?

Other questions surround the future of CNN and other parts of WarnerMedia.

In fact, there are so many questions. Today, we simply do not yet know the answers.

It sure sounds, however, like David Zaslav is taking the romantic view of Hollywood that we all grew up with and in fact miss. Hollywood is a business, but that viewpoint is a breath of fresh air.

I wish Zaslav the best and hope he is successful putting Hollywood back on track again after the last decade of trying new ideas that just didn’t quite work out as well as we had hoped.

It will be interesting to see how long it takes for both AT&T and Discovery to get back on track after this past decade of chaos.

 

Jeff Kagan is an Equities News columnist. Kagan is a Wireless Analyst, Technology Analyst and Commentator who follows Telecom, Pay TV, Cloud, AI, IoT, Tele Health, Healthcare, Automotive, Self-Driving cars and more. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan and LinkedIn www.linkedin.com/in/jeff-kagan/.

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Equities News Columnist: Jeff Kagan

Source: Equities News

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