Just weeks from the launch of its all-important HBO Max product, WarnerMedia is getting a new boss straight from the streaming world.
Jason Kilar, who ran Hulu in its early days, is set to take over as CEO of AT&T Inc.’s WarnerMedia division on May 1, the company announced Wednesday. He’ll have oversight of not only the various media networks — HBO, CNN, TBS, TNT, TruTV, Cartoon Network — and the Warner Bros. film studio, but also the product at the center of AT&T’s latest effort to become a dominant force in streaming TV. That’s HBO Max, a $15-a-month app that will serve as the new digital destination for viewers who want to binge on re-runs of “Friends,” relive “Game of Thrones” and have access to new content with the HBO flavor.
Kilar, 48, is replacing John Stankey, the longtime AT&T executive who has been juggling two titles: head of WarnerMedia and chief operating officer of the Dallas-based wireless parent company. Killar will report to Stankey, who began his career at one of the Baby Bells and is now considered a top candidate to become AT&T’s next CEO when Randall Stephenson retires. The leadership of the new AT&T is taking shape, though the WarnerMedia gig wasn’t necessarily an easy sell for industry veterans watching the messy integration from afar.
Kilar is an interesting choice. Nine years ago, he infamously wrote a memo that read like an obituary for traditional TV, according to Rich Greenfield, an analyst for LightShed Partners, who found a digital copy. “History has shown that incumbents tend to fight trends that challenge established ways and, in the process, lose focus on” customers, Kilar wrote, needling Hulu’s partners at the time (it’s now controlled by Walt Disney Co.). That means HBO, after being led for two years by a wireless executive who knew little about traditional media, will now be led by someone who cares nothing for it. After the Jerry Maguire-like manifesto, one news headline asked if Kilar was trying to get fired; now that kind of thinking has gotten him the top job at a Hollywood giant.
Following his time at Hulu, Kilar went on to create a $3-a-month subscription-video service called Vessel. He sold it in 2016 to Verizon Communications Inc., which shut doMn the service days later and put the Vessel team to work on its own go90 mobile-video product. It was part of Verizon’s failed expansion into media, with go90 now also long gone.
Kilar’s arrival marks another step on AT&T’s stormy path to become an entertainment juggernaut that can compete with Disney and Netflix Inc. That journey began when AT&T acquired Time Warner in June 2018, after initially facing government resistance and later, skepticism from AT&T’s own shareholders that the megamerger would work. (The company’s last major deal, for the DirecTV satellite service, was already creating enough headaches.) Since then, Stankey has reshuffled the Warner ranks, occasionally creating controversy among employees who weren’t on board with the changes. He told me in an interview last year that he was working to have Warner’s sub-brands work closer together toward a common mission of making HBO Max a success.
With most everyone stuck home because of the coronavirus pandemic and binge-watching TV, some have wondered why Stankey hasn’t pushed up the release of HBO Max. Doing so might help it capture more subscribers faster. Although, more time spent watching doesn’t necessarily translate into more money for streaming services, since viewers pay a monthly rate to access an all-you-can-stream buffet of content. The CEO transition may be yet another reason that WarnerMedia is being patient. There’s also tremendous pressure on AT&T to prove it can get this right, not least because it’s saddled with about $180 billion of debt as the U.S. economy hurtles toward a recession.
Last fall, I wrote a piece asking, “Is AT&T’s Hollywood plot too far-fetched?” In the coming months, Kilar will help provide the answer.
Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.
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