HBO Chief 'Agnostic' Where Content Goes Following AT&T-Time Warner Deal--Update

By Deepa Seetharaman and Keach Hagey 

LAGUNA BEACH, Calif. -- In the wake of AT&T Inc.'s $85.4 billion deal to buy Time Warner Inc., HBO Chief Executive Richard Plepler called the premium network's recent multiplatform distribution deal with AT&T a "template for what you can see going forward."

That HBO distribution deal, completed the same week that the chiefs of AT&T and Time Warner sat down over salmon to begin considering a merger, was touted by the two companies as "historic" for the way that it would give AT&T subscribers of all stripes -- linear TV, online streaming and wireless -- a way to buy HBO through AT&T.

Of particular note was that it marked the first time that a wireless company had agreed to sell HBO to customers through their mobile phone bills, though the exact nature of those packages hasn't been announced.

"We don't care how they sell it," said Mr. Plepler, speaking on a panel at the WSJDLive tech conference with Vice Media Chief Executive Shane Smith in Laguna Beach, Calif. Mr. Plepler said he remains "agnostic" about where the content of one of Time Warner's crown jewels appears.

"A sub is a sub," he said.

Mr. Plepler's HBO is among the premium assets of Time Warner's extensive cache of media content, which also includes cable networks CNN, TBS and TNT as well as the Warner Bros. film and TV studio.

AT&T's cash-and-stock acquisition of Time Warner will blend those properties with AT&T's millions of pay-TV and wireless customers, forming a conglomerate that both produces content and distributes it. That content includes a joint daily newscast cocreated by HBO and Vice and a branded Vice channel on HBO's streaming service, HBO Now.

The daily news show is part of the duo's bid to tap the market for millennial audiences and find what Mr. Plepler called "new, addicted subscribers." Mr. Smith said the show strives to strike a nonpartisan tone.

"Everyone is trying to label you, everyone is trying to paint you with a brush," Mr. Smith said. "It's just a war to keep you in the center."

Mr. Plepler declined to give viewership numbers for Vice's new daily news program, which launched in late September, but said it cumulatively drew "hundreds of thousands" of viewers in its first two weeks on the air. Those viewers have been evenly split between HBO's linear television platform, where it airs at 7:30 p.m. every weeknight, and streaming platforms like HBO Go and HBO Now, according to a person familiar with the matter -- a sign that it is reaching its target younger audience.

But ultimately, Mr. Plepler said "I don't really care" what the numbers are for Vice News because his business is based on subscribers, not advertising. "If this is additive to our brand, we'll take the time for it to build an audience."

Mr. Smith said the majority of Vice's growth now comes through "licensing money" as opposed to advertising. With Vice's news content on HBO, forfeiting ads is important for keeping the attention of young viewers and gives Vice "a free wheel to go after anybody," he said.

Write to Deepa Seetharaman at [e-mail] and Keach Hagey at [e-mail]

(END) Dow Jones Newswires

October 25, 2016 14:14 ET (18:14 GMT)

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