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| WarnerMedia Hires Hulu Boss to Replace John Stankey as Chief Executive | |
| (about 3 hours later) | |
| AT&T has brought in the former head of Hulu to lead WarnerMedia, the news and entertainment division that includes HBO, CNN and the Warner Bros. movie studio. | |
| The company said on Wednesday that Jason Kilar, the founding chief executive of the streaming platform Hulu, will replace John Stankey, a longtime AT&T executive, as the boss of WarnerMedia. Mr. Kilar will report to Mr. Stankey, who remains AT&T’s president and chief operating officer. | |
| The announcement of the change, which goes into effect May 1, comes a month before the scheduled introduction of HBO Max, the WarnerMedia streaming service that will be the exclusive online home of “Game of Thrones,” “Friends” and the Harry Potter films. | |
| “Jason is a dynamic executive with the right skill set to lead WarnerMedia into the future,” Mr. Stankey said in a statement. “His experience in media and entertainment, direct-to-consumer video streaming and advertising is the perfect fit for WarnerMedia, and I am excited to have him lead the next chapter of WarnerMedia’s storied success.” | “Jason is a dynamic executive with the right skill set to lead WarnerMedia into the future,” Mr. Stankey said in a statement. “His experience in media and entertainment, direct-to-consumer video streaming and advertising is the perfect fit for WarnerMedia, and I am excited to have him lead the next chapter of WarnerMedia’s storied success.” |
| Mr. Kilar, 48, was early to streaming. Hulu began as a joint venture among Comcast’s NBCUniversal, the Walt Disney Company and 21st Century Fox in 2007, two years after the start of YouTube and the same year that Netflix unveiled its digital-video-on-demand service. | |
| Adopting a strategy that contrasted with the model favored by Netflix model — a monthly subscription fee with no advertising — Mr. Kilar insisted on an ad-supported plan for Hulu. | |
| The appointment of Mr. Kilar may allow Mr. Stankey to focus on his role as AT&T’s second-in-command while campaigning to succeed Randall L. Stephenson as chief executive. | |
| A self-professed “Bell-head,” Mr. Stankey was elevated to president and chief operating officer of AT&T in September, a move that put him squarely in line to succeed his boss. | |
| AT&T started looking for a new WarnerMedia chief executive at the time of his promotion, according to three people with knowledge of the search. | |
| Mr. Stephenson has committed to staying through this year. He had previously flirted with the idea of stepping down some time in 2020. In a September interview, Mr. Stephenson said that the AT&T board had not set his retirement date. Of the likelihood that Mr. Stankey could succeed him, Mr. Stephenson said he “obviously has to be one of the primary candidates on the list.” | |
| In his 18 months in charge of WarnerMedia, which AT&T acquired in 2018 as part of its $85.4 billion purchase of the Time Warner media empire, Mr. Stankey refashioned the division to focus on streaming. | |
| He invested heavily in HBO Max, which is slated for a May debut. (The company has yet to specify the date.) He also made it his mission to dissolve the borders between WarnerMedia’s separate units. | |
| Tensions between Mr. Stankey and his new charges arose shortly after the merger, at a June 2018 town hall for HBO employees in New York. At the meeting, the new boss sat on a stage with Richard Plepler, a gregarious entertainment executive who had led the cable network to 160 Emmys. Mr. Stankey warned of a “a tough year” ahead that would require significant changes. He also mentioned that HBO did not make enough money. | |
| Those were fighting words, given that Mr. Plepler had repeatedly said the best thing for the network was to maintain its independence, so that it could come up with shows like “The Sopranos,” “Game of Thrones” and “Big Little Lies.” | |
| People familiar with Mr. Plepler’s thinking said that he found he had less autonomy in his short run as an AT&T employee. In January, nearly a year after his departure, Mr. Plepler signed an exclusive, five-year deal to produce films and shows for Apple TV Plus streaming platform. | |
| During Mr. Stankey’s time as the news and entertainment chief, WarnerMedia also lost David Levy, who resigned as president of Turner Broadcasting, the division that includes TBS and TNT. In addition, Kevin Tsujihara, the former head of Warner Bros. studio, stepped down after accusations that he had tried to arrange TV and film roles for a woman with whom he had a sexual relationship. | |
| The leadership team installed by Mr. Stankey includes Mr. Greenblatt, the former chairman of NBC entertainment, who has run entertainment at WarnerMedia for the last year. And Mr. Zucker, the CNN head, has assumed responsibility for sports programming. | |
| A background player in the WarnerMedia drama has been Elliott Management, a hedge fund with a $3.2 billion stake in AT&T. Upset with AT&T’s lackluster stock performance, the hedge fund has been publicly critical of the company’s attempts to leave its telecommunications comfort zone and become a major player in the news and entertainment industries. | |
| In September, days after the elevation of Mr. Stankey to AT&T president, Elliott Management went public with a scorching 24-page letter questioning AT&T’s handling of WarnerMedia. Led by the billionaire businessman and Republican donor Paul E. Singer, the hedge fund expressed concern over whether Mr. Stankey had been right to allow the departure of Mr. Plepler. | |
| It also questioned whether he could simultaneously play a leadership role at the overall company while having direct oversight of CNN, Warner Bros., Turner and — perhaps most important — HBO Max, which must compete in a crowded marketplace against Netflix, Disney Plus, Amazon Prime Video, Hulu and Apple TV Plus, among others. | |
| The letter from the hedge fund also said the executive changes at WarnerMedia on Mr. Stankey’s watch were part of “a particularly troubling pattern given the very different nature of its businesses compared to those in which AT&T has historically operated.” | |
| Mr. Stephenson did not push back publicly against Elliott’s criticism. “They had some suggestions that I thought were really good,” he said in the September interview. | |
| The two sides eventually agreed on a forward-looking plan that included streamlining operations and potentially selling off some of its units, including DirecTV, the company’s fast-dwindling satellite TV service. | |
| Mr. Stankey’s replacement, Mr. Kilar, is perhaps best known in Hollywood for a blog post he wrote in 2011. To many people, it read as a blistering critique of Hulu’s corporate ownership, as well as a manifesto on the future of entertainment. | |
| Since removed from Hulu’s corporate site, the post panned traditional TV for running far too many commercials. He also blasted cable, predicting that viewers would eventually drop expensive packages. | |
| In many ways, the memo was a plea to his bosses to take advantage of the internet, where consumers were more in charge. They wanted fewer commercials and more control over when they watched a show, he said, laying out his thoughts years before binge-watching was a common pastime. | |
| “History has shown that incumbents tend to fight trends that challenge established ways and, in the process, lose focus on what matters most: customers,” Mr. Kilar wrote. “Hulu is not burdened by that legacy.” | |
| Much of AT&T’s future rides on HBO Max, which will stream critically acclaimed HBO originals like “Succession” and “Barry” alongside reruns of big-tent Warner Bros. sitcoms like “The Big Bang Theory.” At $15 a month, the service will be costlier than its rivals. | |
| There is most certainly an appetite for streaming as stay-at-home orders have been issued throughout the country in the wake of the coronavirus pandemic. Nielsen said that streaming usage had gone up 36 percent in the United States in recent weeks. | |
| There are, however, millions of Americans losing jobs in the fallout. Whether people will want to add to their monthly streaming bill is an open question. | |
| This is a developing story. Check back for updates. | This is a developing story. Check back for updates. |