AT&T exec admits HBO brand saturation a “mistake”

An executive in charge of overseeing AT&T’s various HBO properties admitted the company made a mistake when it operated a confusing number of HBO-branded streaming services.

In an appearance on CNBC’s Squawk Alley on Wednesday, AT&T WarnerMedia chief executive Jason Kilar said the company is trying to clear things up for consumers by reducing the number of HBO streaming services to two.

Before AT&T acquired HBO and other Warner Bros. assets in 2018, the company previously known as Time Warner operated just two HBO streaming services: HBO Go, which required a cable or satellite subscription to HBO’s television network, and HBO Now,  a streaming service available to customers who didn’t have cable or satellite.

AT&T started to muddy the waters when it offered streaming platforms Apple, Google, Roku and Amazon the ability to distribute HBO content natively through certain apps. The same deal was made with Dish Network-owned Sling TV, Disney’s Hulu and several AT&T-branded streaming-only cable alternatives.

From the get-go, AT&T’s strategy appeared to be one that made HBO available anywhere to anyone, regardless of which devices customers used or how they subscribed to the service. But things started to get confusing when AT&T announced HBO Max, a new streaming service that cost the same as a traditional HBO subscription but included far more movies and TV shows curated from other AT&T-owned brands.

When it launched in May, HBO Max was immediately available to HBO subscribers who were customers of Comcast, Cox Cable, AT&T TV, YouTube TV, Hulu and DirecTV, but only if they had access to a streaming platform that supported the service. At launch, those platforms were limited to Apple’s iOS, Google’s Android and Microsoft’s XBox gaming consoles because AT&T hadn’t reached an agreement to bring the app to Roku and Amazon Fire TV users. It still hasn’t.

To make matters worse, not all cable and satellite subscribers had access to HBO Max — only those who had certain agreements with AT&T. That meant customers of smaller, regional cable outlets were paying the same amount for HBO as customers of HBO Max, but without access to the expanded library of content.

Adding to the confusion was AT&T’s continued support for HBO Go on all platforms and HBO Now on those that didn’t support HBO Max. The end result was that most subscribers who did have access to HBO Max didn’t immediately use the service right away, and those who didn’t have access to the service weren’t quite sure why.

AT&T tried to clear up some of that confusion when it decided last month to sunset HBO Go entirely and change the name of HBO Now to simply HBO.

“So now we are left with, rightly so, HBO Max and HBO,” Kilar told CNBC. “It’s a much simpler proposition for consumers.”

It might not be that simple.

Most cable companies that offer HBO lowered their price to match that of HBO Now when it launched. That means most cable customers are paying $15 a month to receive HBO programming through their TV boxes. Streaming services like the Roku Channel, Apple TV Plus, Hulu and Sling have charged $15 a month for HBO as well since they started offering the network.

Two years ago, AT&T surprised people when they announced HBO Max would launch at that same $15 a month price point. Most believed AT&T would simply replace HBO Go and HBO Now with HBO Max and customers would receive access to the streaming app regardless of how or where they paid for HBO programming.

In a simple world, that’s exactly what would have happened. But that’s not what AT&T did. And instead of just offering one streaming solution for all, the company is insisting on forging deals that are favorable to it instead of consumers — which is why some cable customers are paying $15 a month for less programming compared to people who pay AT&T $15 a month for HBO Max and have access to a platform that supports it.

AT&T’s decision to sunset HBO Go and HBO Now was undoubtedly a step in the right direction, but the company still has a long way to go if it wants to clear up the brand mess it made.

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