Am I Next? Are major layoffs coming to DirecTV?

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?


Am I Next? Disney, ABC Television Layoffs.

It should come as no surprise that media companies, especially those with a movie and television component are suffering from consumer fatigue. Not only are re-jiggered and socially engineered projects failing, but the costs appear to be remaining steady. 

As per published reports, the Walt Disney Company will undergo another round of restructuring that will lead to the layoffs of approximately 300 people, mostly with in the ABC television group. The target is said to be a reduction of 10% of the units operating costs for an estimated savings of approximately $300 million. On the horizon is a younger audience with no particular affinity for over-the-air broadcast television or cable news programs. With internet streaming, most users are becoming agnostic to the delivery medium and the immediacy of watching a program when it is broadcast. Even with a decrease in advertising revenue, many companies saw their bottom line protected by increased cable, satellite, and streaming programming fees. 

For some companies, America’s divisive politics has produced audience increases, albeit among the older crowd. Some companies, like sport’s network ESPN, also owned by Disney, tried the politically correct route only to discover that sports fans did not like their sports delivered with a side of political correctness. 

It is best to remember the old saying: talent may come and go, bottom-line production may come and go, but “suits” (executives) simply rotate through the system – grabbing everything they can while full well knowing that their longevity is linked to hit programs and the bottom line. 

This is not the first batch of layoffs for Disney who laid off a number of people in their consumer products and interactive media units in 2016 and was widely excoriated for outsourcing some of its IT work to foreign workers – while demanding that existing employees train their replacements in order to obtain their severance package.

However, the greatest competition is not coming from the major companies, but user-created content. With the price of high-quality digital cameras, software-based editing suites, and green-screen technology, the barrier to content creating has fallen significantly and companies such as YouTube are allowing advanced amateurs to monetize their product. Without major fixed overhead and high-priced talent, many smaller content creators are more than willing to settle for less money and to own their branded niche of the market.

Disruption is coming. Are you going to be the one asking, Am I Next?