Should HBO be more like Netflix?

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"Change is coming to HBO," said Edmund Lee and John Koblin at The New York Times. The "crown jewel" of AT&T's recent $85.4 billion acquisition of Time Warner, and the home of critical hits such as The Sopranos, Game of Thrones, and Westworld, HBO has an unparalleled track record of winning "endless Emmys while generating billions in profit," largely by focusing on "quality over quantity." But leaked audio from a recent New York staff meeting hosted by John Stankey, the veteran AT&T executive overseeing the newly christened Warner Media, revealed that the telecom does not intend to be "a passive corporate parent." Stankey told staffers that HBO must shift away from creating boutique, high-gloss productions that take years to develop, and think "more like a streaming giant" — namely, Netflix. HBO needs to be "bigger and broader," Stankey suggested, and it will have to substantially increase the number of shows it makes, so that it can attract more viewers and increase engagement. To drive home his point, Stankey said he wanted to count not how many hours viewers watched per week, but how many "hours a day." The directives neatly sum up AT&T's corporate worldview, in which companies "gobble up the market until all competitors are vanquished," said Rhett Jones at Gizmodo. In Stankey's mind, consumer preferences exist to be endlessly diced up and monetized across platforms, "and hey, if some people like the show with the dragons, that's fine, too."

This is probably "the end of HBO as we know it," said David Sims at The Atlantic. AT&T apparently believes the cable channel is "too small, too nimble, and too boutique — ill-fitted for a media world that's all about size." But Netflix is a company of "peerless scale" whose approach is to "overwhelm" viewers with fresh content. That means Netflix "burns through" cash — it will spend as much as $13 billion on original programming this year alone — while HBO makes "a lot of money." In the past three years, it spent just $2 billion a year on programming and banked nearly $6 billion in profit. "Netflix has more in common with Time Warner than it does with HBO," said Alex Shephard at New​ Republic. The idea that HBO can ramp up production without sacrificing the marquee brand it obsessively crafted over three decades is "a recipe for disaster." It's shocking that AT&T is so eager to develop a Netflix competitor, "it's willing to compromise one of its most valuable assets in the process."

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"It makes sense for Stankey to want to compete with Netflix," said Felix Salmon at Slate. He just needs to find another platform to achieve his goals. HBO's high-quality catalog helped it cultivate a connection with its subscribers that Netflix can never hope to replicate. That connection "has turned it into one of the most valuable brands in the media world." AT&T should allow HBO to "play to its strengths without trying to turn it into something it isn't." That's the highly profitable blueprint Disney followed when it acquired the similarly beloved brands Marvel and Pixar. "If Stankey wants to reach the kind of people who watch Adam Sandler films on Netflix, he should find a vehicle whose entire value proposition isn't built on quality."