Now that the AT&T’s $85 billion acquisition of Time Warner has been consummated, it is only natural for the employees of the previous acquisition, the $50 billion DirecTV deal, to wonder about the blood-letting that is guaranteed to occur as the company sorts out lines of business, duplicative functions, and corporate strategies. Randall Stephenson, AT&T chairman and CEO has made it a priority to reduce debt in 2019. The target is a debt load that is no more than 2.5 times earnings by the end of 2019. This is often CEO-code speak for divestitures (possible Hulu sale to Disney), shedding employees, and reorganizing business lines.
There is little or no doubt that consumers are cord-cutting traditional content delivery systems in favor of streaming solutions.
In announcing DirecTV fourth quarter results, management noted that “DIRECTV NOW (stream programming from cable channels without the long term commitment) lost 267,000 subscribers as the company scaled back promotions and the number of customers on entry-level plans declined significantly. The company also lost 403,000 traditional DirecTV satellite TV subscribers. The combined loss of 670,000 subscribers makes this the worse loss in the company’s history. However, the company claims that the addition of 12,000 Internet-TV subscribers at AT&T’s U-Verse mitigates the loss to only 658,000 video subscribers.
The AT&T company line has always been, “We continue to align our workforce with the changing needs of the business.”
Speculation is rampant that it may make financial and marketing sense to kill DIRECTV NOW in favor of WarnerMedia’s new and as yet unnamed streaming service being debuted in 2019.
An example of gross management stupidity and blindness at TimeWarner…
“Incoming WarnerMedia chairman Bob Greenblatt critiqued Netflix earlier this week, saying, "Netflix doesn't have a brand. It's just a place you go to get anything — it's like Encyclopedia Britannica," per an interview with NBC News' Dylan Byers.”
“WarnerMedia chief claims Netflix has no brand — we disagree, its brand is a viewer-first experience. We believe Netflix has managed to generate brand strength — and consumer love and loyalty — thanks to its ability to provide consumers on-demand access to the content they want, in a personalized way. “
“Not only does Netflix have a brand identity, but it's one of the stickiest and most-loved brands in the media space. “ Read the full story, in context, here.
Neither TimeWarner nor AT&T have the type of reputation for good products or customer service that Netflix commands. How stupid do you have to be to criticize a company and then enumerate all of the very characteristics that makes the company great?
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life, or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere ... are you now wondering, Am I Next?