WarnerMedia CEO Cites "Nominal" Coronavirus Impact

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John Stankey

"There's clearly impacts that are starting to emerge, and it's a fluid dynamic," John Stankey told an investors conference about smartphone and tablet shortages for AT&T telecom customers.

John Stankey, president and COO of AT&T and CEO of Warner Media, on Tuesday talked about the impact on the phone and media giant from the spread of coronavirus, including supply shortages of iPhones and other handset brands after factory shutdowns in China.

"There's clearly impacts that are starting to emerge, and it's a fluid dynamic. I do expect there's going to be some impact that flows through handsets, especially from those vendors that are more oriented to China," Stankey told the Morgan Stanley Technology, Media and Telecom Conference in San Francisco.

Coronavirus has disrupted China's economy, leading to smartphone and other product shortages and supply chain disruptions from key handset manufacturers for AT&T and other telecom giants. Stankey said his company had stockpiled smartphones, tablets and other products to avoid running out, and that shortages "may have some nominal impacts, but it's not significant" to date.

"Maybe if a few more people are going to be staying home, they might find more utility in watching TV for a period of time that might help us in the short term," Stankey said of efforts to reverse a shrinking pay TV customer base.

That includes AT&T's launch Monday of its new internet-delivered TV service, AT&T TV. "One day doesn't make a quarter, but we're really pleased with what we saw," Stankey reported.

The new service has most of the same channels offered on DirecTV but arrives in homes via the internet rather than a satellite dish, and Stankey touted AT&T as an evolution away from hardware toward a software-driving video offering.

"The way you should think about this is, our software products are our lead products, and our video product bundled with broadband is where we are most focused in what is our lead in the market today," he said.

DirecTV's satellite TV offering will continue to be distributed to rural customers or those not looking for the latest in technology. "But in terms of our marketing muscle and our momentum in the market, it will be about software-driven pay TV packages, either over bring-your-own hardware, which is AT&T or AT&T Now, or AT&T TV, which is our own hardware-provided package," Stankey said.

The WarnerMedia boss also talked about the upcoming launch of HBO Max, the studio's streaming service that aims to take on Netflix and other online rivals. "It's going to be great content offer. It will be a content offer that has something for everybody in the household. They'll look at it and say, I see myself there.... It's the strength of the household that we believe will be strength of HBO Max," Stankey said.