AT&T announced on Wednesday that it would bring in the former head of Hulu to lead WarnerMedia, the news and entertainment division that includes HBO, CNN and the Warner Bros. movie studio.

Jason Kilar, the founding chief executive of the streaming platform Hulu, will take over for John Stankey, a veteran AT&T executive who has run WarnerMedia since June 2018, when AT&T assumed control of the WarnerMedia properties as part of its $85.4 billion purchase of the Time Warner media empire. Mr. Kilar will report to Mr. Stankey, who will remain as AT&T’s president and chief operating officer.

“It was always in the back of my mind that if there were ever a way to get him to work at AT&T in the right way, I’d jump at it,” Mr. Stankey said in an interview on Wednesday.

The announcement of the change, which goes into effect May 1, comes a month before the scheduled introduction of HBO Max, the company’s $15-a-month streaming service that will be the exclusive online home of “Game of Thrones,” “Friends” and the Harry Potter films.

Mr. Kilar, 48, was early to streaming. Hulu began as a joint venture among Comcast’s NBCUniversal, the Walt Disney Company and 21st Century Fox in 2007, two years after the start of YouTube and the same year that Netflix unveiled its digital video service.

Adopting a strategy that ran counter to the model favored by Netflix — paid subscriptions, no commercials — Mr. Kilar instituted an ad-supported plan for Hulu. WarnerMedia plans to unveil an ad-supported digital platform next year. The service will be distinct from HBO Max.

The appointment of Mr. Kilar will allow Mr. Stankey to focus on his role as AT&T’s second-in-command while auditioning to succeed Randall L. Stephenson as chief executive. A self-described “Bell-head,” Mr. Stankey was elevated to his current role at AT&T in September.

AT&T started looking for a new WarnerMedia chief executive at the time of Mr. Stankey’s promotion, according to three people with knowledge of the search. Robert Greenblatt, who leads entertainment at WarnerMedia, was a candidate, as was Jeff Zucker, the head of CNN, the people said. In addition to Mr. Kilar, outside candidates included Randy Freer, who departed Hulu as chief executive in February, and Tom Staggs, the former chief operating officer of Disney, the people said.

Mr. Stephenson, who once flirted with the idea of stepping down some time in 2020, has committed to staying on as AT&T’s chief executive through this year, adding that the company’s board has not set a retirement date for him. On the likelihood that Mr. Stankey would succeed him, Mr. Stephenson said that he “obviously has to be one of the primary candidates on the list.”

In his 20 months at the WarnerMedia helm, Mr. Stankey refashioned the division to focus on streaming. He invested heavily in HBO Max and made it his mission to dissolve the borders between WarnerMedia’s separate units.

Tensions between Mr. Stankey and his new charges arose shortly after the merger, at a June 2018 town hall for HBO employees in New York. At the meeting, the new boss sat on a stage with Richard Plepler, a gregarious entertainment executive who had led the cable network to 160 Emmys. Mr. Stankey warned of a “a tough year” ahead that would require significant changes. He also mentioned that HBO did not make enough money. Those were fighting words, given that Mr. Plepler had repeatedly said the best thing for the network home of “The Sopranos” and “Game of Thrones” was to maintain its independence.

People familiar with Mr. Plepler’s thinking said that he found he had less autonomy in his short run as an AT&T employee. In January, nearly a year after his departure, Mr. Plepler signed an exclusive, five-year deal to produce films and shows for the Apple TV Plus streaming platform.

On Mr. Stankey’s watch, WarnerMedia also lost David Levy, who resigned as president of Turner Broadcasting, the division that includes TBS and TNT. In addition, Kevin Tsujihara, the former head of Warner Bros. studio, stepped down after accusations that he had tried to arrange TV and film roles for a woman with whom he had a sexual relationship.

The leadership team installed by Mr. Stankey includes Mr. Greenblatt, the former chairman of NBC entertainment. Mr. Zucker, the CNN head, has assumed responsibility for sports programming.

The executive who will replace Mr. Stankey is perhaps best known in Hollywood for a 2011 blog post. To many readers, Mr. Kilar’s piece came across as a blistering critique of Hulu’s corporate ownership, as well as a manifesto on the future of entertainment.

Since removed from Hulu’s corporate site, the post panned traditional TV for running far too many commercials. Mr. Kilar also blasted cable, predicting that viewers would eventually drop expensive packages.

In many ways, the memo was as a plea to the media industry to take better advantage of the internet. People wanted fewer commercials and more control over when they watched a show, Mr. Kilar wrote, laying out his thoughts years before binge-watching was a common pastime.

“History has shown that incumbents tend to fight trends that challenge established ways and, in the process, lose focus on what matters most: customers,” he wrote.

“I think it holds up well and I believe it deeply,” Mr. Kilar said of the blog post in an interview on Wednesday. He described it as “an exercise in listening to the customer.”

Long-simmering tensions between Mr. Kilar and his Hulu bosses led some observers to suggest he had published it in an effort to get the boot. Now the incendiary memo may well serve as a blueprint for WarnerMedia.

“Oh, I knew about the memo,” Mr. Stankey said. “Having anyone willing to articulate a well thought out and well argued point of view is someone I want in the organization.”

A background player in the WarnerMedia drama has been Elliott Management, a hedge fund with a $3.2 billion stake in AT&T. Upset with AT&T’s stock performance, the hedge fund has criticized the company’s attempts to leave its telecommunications comfort zone and become a major player in the news and entertainment industries.

In September, days after the elevation of Mr. Stankey to AT&T president, Elliott Management went public with a scorching 24-page letter questioning AT&T’s handling of WarnerMedia. The hedge fund, led by the billionaire businessman and Republican donor Paul E. Singer, expressed concern over whether Mr. Stankey had been right to allow the departure of Mr. Plepler.

It also questioned whether he could simultaneously play a leadership role at the overall company while having oversight of CNN, Warner Bros., Turner and — perhaps most important — HBO Max, which must compete in a crowded marketplace against Netflix, Disney Plus, Amazon Prime Video, Hulu and Apple TV Plus, among others.

Mr. Stephenson, the AT&T chief executive, did not push back publicly against Elliott’s criticism. “They had some suggestions that I thought were really good,” he said in the October interview.

Much of AT&T’s future rides on HBO Max, which will offer critically acclaimed HBO originals like “Succession” and “Barry” alongside reruns of big-tent Warner Bros. sitcoms like “The Big Bang Theory.” Its $15-a-month price tag makes it costlier than its rivals.

There has been an increased appetite for streaming in the wake of the stay-at-home orders that have been issued throughout the country to guard against the spread of the coronavirus pandemic, according to Nielsen. But millions of jobs are gone or have been put at risk in the fallout. Whether people will want to add to their monthly streaming bill is an open question.

Source Article