



1. WarnerFlix Dumps The Three-Tier Plan,

I cringed when I heard about AT&T’s plan to implement a “three tier” plan for their new WarnerFlix product. It was as if they’d just announced to the world “Yes! We’re a big phone company! And we don’t know a thing about TV, so we’re going to make our TV plan resemble a cell phone plan, but you all will still want to watch HBO, so FU!”

Fortunately saner heads have prevailed and there will no longer be a three-tiered plan. There will instead be a one-tier, ad-free plan at either $16 or $17 a month (do I hear $16.49?) that includes HBO, Cinemax and “its vast Warner Bros. TV and movie library” (make of that last bit what you will) with a likelihood that a less expensive ad-supported version will be rolled out in months to come. (The launch of the yet-unnamed single tier WarnerFlix has now been pushed back to March 2020, but don’t hold your breath.)

Why It Matters

We’ve long postulated that AT&T figured out why its Warner purchase would make sense from a business standpoint (Xandr! 5G! All that data!) but hadn’t really given much thought to what the end result would look like or why consumers might actually want to, you know, subscribe to it. They just kind of figured that if they had some combination of HBO, CNN, TNT, TBS and Warner Brothers that people would need to subscribe.

Or something like that. It was a very “We’re AT&T, and if you don’t like us, your only other options are Verizon and T-Mobile and their reception near your house sucks” POV.

Fortunately AT&T has hired Bob Greenblatt, who by all accounts is a smart guy and who (more important) has spent years working in the actual television industry, to figure this out.

That right there is a huge win for John Stankey, as it shows that he’s been able to do something so few CEOs are able to do—know what you don’t know and hire someone who does know—and as a result, WarnerFlix now has a much better chance of success.

One thing they still need to figure out though: if HBO via Comcast, Charter et al costs $15/month and WarnerFlix costs $16 or even $17/month and gives me HBO, Cinemax and several players-to-be-named-later, why would I bother keeping my Comcast HBO subscription and doesn’t that then make those viewers far more susceptible to churn?

What You Need To Do About It

If you’re Greenblatt and Stankey, answering the question above about how MVPD HBO compares with WarnerFlix and how (or even if) you plan to transition customers from one to the other, and do all those millions of HBO Now customers automatically become WarnerFlix customers would be a good place to start.

If you’re one of the other Flixes, oh well. Looks like that three-tier plan that was going to give you one less competitor to worry about is not going to happen after all, factor WarnerFlix back into the mix.

If you’re a consumer, just be glad you won’t have to deal with tiers and that HBO-on-Steroids is only going to cost you a dollar or two more a month than it does now. (Small victories.)

If you’re curious, read this piece that started out as “10 Questions for AT&T” but then grew to 50!

2. Quibi Dumps TV

A few months ago I was talking with an executive from a streaming device company and when I mentioned that I’d read that Quibi was planning to launch an app on said executive’s streaming TV device, they seemed surprised and said it was news to them.

For good reason, it now seems: Quibi recently let loose the news that they are going to be bypassing the TV set altogether, focusing strictly on mobile.

Why It Matters

Remember when Verizon CEO Lowell MacAdam announced that he was buying AOL and Yahoo? And your first reaction was that it was probably the dumbest idea you’d heard in a long time. But then you wondered if maybe he wasn’t some kind of supergenius who had the ability to see why putting those two companies together made so much sense and that’s why he was CEO of Verizon, and you were doing whatever it was you were doing.

Exactly.

Yes, he’s Jeffrey Katzenberg. Yes, she’s Meg Whitman. Yes, they’ve hired all sorts of smart, well-credentialed people who have experience working for some of the biggest, most successful companies in the industry, and yes, they have some of the biggest, brightest names in Hollywood signed up to create programming for them too.

But still … WTF?

Granted Go90 was a clusterfuck from the get go and not a really useful as a comp, but the one example of short-form working well—a service launched by Denmark’s TV2—still got the bulk of its viewing from the “here’s the whole short form series at once, sort of like a movie, only on TV” show it ran once a week, as our esteemed colleague Colin Dixon recently pointed out.

Our biggest question around Quibi remains: what exactly is the actual use case for it?

There’s a study we heard about recently from the UK that shows that a majority of the online video people watch falls into the “instructional” category, e.g., how to tie a bow tie, how to change the air filter on your car, how to apply eye shadow for a job interview, etc.

In other words, something you watch because you have to. Not because you want to.

That’s a huge difference.

The rest of mobile video seems to be watched as a way to kill time: a two minute video on Facebook with a cute dog. A clip of a particularly skillful touchdown from last night’s NFL game. A piece of a late night talk show host’s monologue.

But a series that requires you to give it your full attention?

I don’t know about that.

A large part of TV’s appeal is that it’s a group activity: people watch TV together, the exception being angsty 14 year-olds whose parents are really annoying and so they just want to watch on their own with headphones on in their room where no one can bother them.

And then those angsty 14 year-olds turn 19 and they’re back on the couch with everyone else.

So again, why would we want to watch the sort of shows we’d want to share with friends and family in the isolation tank of our smart phones?

There’s the maybe it’s a supergenius thing I’m just not wise enough to see, but well, to repeat the comment above, I don’t know about that.

#Doubtful.

What You Need To Do About It

Not much to do other than sit and wait to see how it all plays out.

And remember that saying “I told you so” is not what mature people do.

No matter how good it might make them feel.