AT&T Entertainment CEO Touts Rising Importance of Content
"We just cannot envision a future where AT&T is relevant if we don't directly participate in some of the water flowing through our pipes," says John Stankey at the Mobile World Congress in Barcelona, Spain.
John Stankey, the CEO of telecom giant AT&T's AT&T Entertainment Group, told the Mobile World Congress in Barcelona, Spain, on Monday that "content that is compelling matters" and that the company wants to fully participate in the programming business and not just treat it as "a hobby."
AT&T last year agreed to acquire Time Warner for $85.4 billion. Time Warner shareholders recently approved the deal, but regulators must still review it.
Stankey discussed how AT&T has rethought its approach to its business. "Our previous course and direction failed to value customers when they really craved appreciation. We offered them prepackaged solutions when they craved customization," he said. "We perfected the model of offering customers more for more [when in reality] they want more for less."
He concluded: "It’s the customer’s world, and we are just living in it." He explained that "it’s a big pivot," and "we need to get comfortable feeling uncomfortable."
With customer relationships earned day by day or even minute by minute, Stankey said his team drew up five guiding principles.
1. "Video will be the dominant payload of future networks" as more than 60 percent of traffic on AT&T's networks today is video, which will soon hit 70 percent," Stankey said. "We just cannot envision a future where AT&T is relevant if we don't directly participate in some of the water flowing through our pipes."
2. Multisided business models will remain important. He said subscription and advertising are both "necessary" and will require some innovation.
3. "Content that is compelling matters," Stankey cited as the third key principle. "We believe that in the content-connectivity equation, the weight is now starting to move to the content side, both premium and native digital."
He added that “curation and aggregation of content” will still be key, and "we strongly prefer to address and participate in the innovation of emerging models from a position of relevance and scale than trying to get there from the ground floor up." Concluded Stankey: "In a company our size, pursuing a structural shift as a hobby just isn’t a winning strategy."
4. Integration matters for value and convenience. Explained the AT&T Entertainment CEO: Fast connectivity is a given, but consumers want control and simplicity. They may not watch a basketball game live, "but they want the highlights, the differentiated delivery with unique camera shots up close and personal right when they want it."
5. The product is software. Stankey in that context also argued that passion and engagement, such as the number of hours spent with content, are set to become increasingly important metrics to gauge the success of a company's offerings.