WarnerMedia is restructuring to deal with HBO Max

© Reuters. FILE PHOTO: Bob Greenblatt, chairman of WarnerMedia Entertainment, poses upon arrival at the WarnerMedia Upfront event in New York

By Kenneth Li

(Reuters) – WarnerMedia executives Bob Greenblatt and Kevin Reilly, who oversaw the creation of the HBO Max streaming business, will leave the company as part of a major restructuring focused on streaming service, said the company Company on Friday.

The reorganization also includes the consolidation of film and television studios under Warner Bros. Managing Director Ann Sarnoff.

The reorganization is the first major move by WarnerMedia CEO Jason Kilar, a former managing director of (O 🙂 who built Hulu.

"We're focusing on HBO Max and keeping it in the organization," Kilar said in an interview on Friday.

Andy Forssell, general manager of HBO Max, will now lead a newly created operational business unit for HBO Max, added Kilar.

Parent company AT & T Inc (N 🙂 hired Kilar to take over WarnerMedia in the fight against Netflix (O 🙂 and Walt Disney & # 39; s (N 🙂 Disney + for streaming video customers.

The wireless operator, which has invested heavily to transform itself into a media and telecommunications conglomerate, reported 36 million subscribers for both its premium TV channel HBO and HBO Max in the second quarter.

Disney +, which launched last November, had 60.5 million paying customers as of Monday. Netflix, which launched its streaming service in 2007, ended the second quarter with nearly 193 million paying customers worldwide.

Media companies have been hit hard by sharp declines in ad sales as marketers spend soaring amid the global coronavirus outbreak. The pandemic has also halted the production of original material and starved streaming services with new content needed to encourage subscriptions.

Hollywood studios have been forced by the pandemic to find ways to make up for lost sales. Some have released feature films directly to consumers through streaming services.

Comcast Corp & # 39; s (O 🙂 Universal Pictures recently negotiated a deal with cinema chain AMC Entertainment Holdings Inc (N 🙂 to allow the studio to release movies directly to consumers after just three weeks in theaters compared to the usual Average of three months.

Kilar said WarnerMedia continues to support theatrical releases for films like director Christopher Nolan's spy action film "Tenet" and "Wonder Woman 1984" but sees room for change.

"It's fair to say we all want to lean into the future. If you don't do that, it's not a good strategy," he said. "Where I think that leads us, the windows are shorter than historically."

AT & T's revenue in WarnerMedia's segment, including HBO, decreased 22.7% to $ 6.8 billion in the second quarter, with the pandemic impacting revenue of $ 1.5 billion.

WarnerMedia also said Friday it would cut jobs without disclosing the number of employees affected.

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