
Get in the KNOW
on LA Startups & Tech
XAT&T's Wild Week: John Stankey Takes Control Ahead of HBO Max Launch
Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake

It's been a busy week for AT&T.
On Tuesday, its WarnerMedia subsidiary revealed HBO Max will launch on May 27th; on Wednesday, it released first-quarter earnings; and on Friday, the Dallas-headquartered conglomerate shuffled its leadership with CEO-Chairman Randall Stephenson handing over power to current President-COO John Stankey. A leadership change has been in the works since 2017, according to a company statement.
Stankey, who will assume the CEO mantle on July 1st, will soon relinquish his current CEO perch atop WarnerMedia, which oversees HBO Max. He takes the reins at AT&T amid a period of corporate transition, which largely centers around the new streaming service that will fall under the direct purview of former Hulu chief Jason Kilar.
AT&T has borne its fair share of recent scorn. Activist investor Elliott Management has publicly criticized the firm, questioning the strategy behind the acquisitions of DirecTV in 2015 for $49 billion ($67.1 billion including debt) and Time Warner in 2018 for $85 billion. According to media analyst Matthew Ball, AT&T now holds more debt than at any time in its history.
The company is pinning a lot of hopes onto HBO Max, which will reportedly launch with over 10,000 hours of content at a subscription price of $14.99 per month. In addition to HBO programming, HBO Max will also include content from the vast WarnerMedia library (Warner Bros., CNN, TNT, DC Entertainment, Cartoon Network, and more), dozens of new original films and series, and a variety of licensed assets.
Making It Fit
Media analyst Bruce Leichtman told dot.LA that HBO Max is a critical piece that AT&T is trying to fit into its large puzzle of corporate business units.
The firm, Leichtman said, has recently eschewed lower-value customers on its pay-TV businesses (DirecTV, AT&T U-Verse and AT&T TV Now), resulting in a quick loss of over 4 million subscribers in 2019 (up from about 750,000 in 2018). AT&T alone accounted for over 80% of total U.S. pay-TV net losses last year. Importantly, Leichtman noted, this did not correspond to a proportional drop in income, since these were primarily lower-margin customers.
Looking forward, HBO Max will be included gratis in "select AT&T wireless, video and internet plans," AT&T has said. The hope is to entice relatively profitable customers to pony up by bundling high-margin services with the content bonanza.
"I think what we're seeing is an attempt to fit all these parts together," summarized Leichtman
Additionally, by moving into over-the-top (OTT) streaming, AT&T will have an opportunity to more aggressively leverage its HBO asset.
"They always thought," Leichtman said, "they had an undervalued asset in HBO. They looked and said, 'Why isn't HBO Netflix?'"
HBO Max will be included gratis in "select AT&T wireless, video and internet plans."live.staticflickr.com
HBO Max presents AT&T at least two valuable opportunities to grow its corporate footprint. First, it may be able to capitalize on a public market that seems bullish on streaming.
"They are astounded, not necessarily by Netflix as a service, but more so by the valuation," Leichtman said. Whether you call it exuberance or foresight, AT&T wants a piece. And the coronavirus lockdown may help them get it.
"If anything in media stands to benefit from people being locked in their homes, OTT and pay-TV services are it," wrote Doug Creutz from Cowen & Company in a report earlier this week.
HBO Max will also give AT&T a chance to capture a younger audience, Leichtman suggested, which the company does not reach as easily through its current channels as it may with a direct-to-consumer streaming service.
The Cowen & Company report forecasted HBO Max's total U.S. paid subscribers in 2024 at 24 million. That projection places it sixth in the so-called streaming wars, behind Amazon Prime (83.4 million), Netflix (72 million), Hulu (43.8 million), Disney+ (37.2 million) and Apple TV+ (31.3 million). Given HBO Max's relatively high price, though, and its potential synergies with the rest of the company, that position may suit AT&T just fine.
Now it's on Stankey, and the newly appointed Kilar, to make it happen.
- John Stankey Takes Control of AT&T Ahead of HBO Max Launch ... ›
- HBO Max Launches, The Newest Streaming Super-Network - dot.LA ›
- WarnerMedia CEO Jason Kilar on Hulu and Disruption - dot.LA ›
- HBO Max Will Offer Cheaper Ad-Supported Streaming - dot.LA ›
Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake
Subscribe to our newsletter to catch every headline.
Genies Wants To Help Creators Build ‘Avatar Ecosystems’
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”
The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.
Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.
Similar programs are common in the startup world and in the creator economy. For example, social media companies can use accelerator programs not only to support rising stars but to lure those creators—and their audiences—to the company’s platforms. Genies believes avatars will be a crucial part of the internet’s future and is similarly using its program to encourage creators to launch brands using Genies’ platform.
“I think us being able to work hands on with this next era—this next generation of designers and entrepreneurs—not only gets us a chance to understand how people want to use our platform and tools, but also allows us to nurture those types of creators that are going to exist and continue to build within our ecosystem,” said Allison Sturges, Genies’ head of strategic partnerships.
DIY Collective’s initial cohort will include roughly 15 people, Sturges said. They will spend three weeks at the Genies headquarters, participating in workshops and hearing from CEOs, fashion designers, tattoo artists and speakers from other industries, she added. Genies will provide creatives with funding to build brands and audiences, though Sturges declined to share how much. By the end of the program, participants will be able to sell digital goods through the company’s NFT marketplace, The Warehouse. There, people can buy, sell and trade avatar creations, such as wearable items.
Genies will accept applications for the debut program until Aug. 1. It will kick off on Aug. 8, and previous experience in digital fashion and 3D art development is not required.
Sturges said that the program will teach people “about the tools and capabilities that they will have” through Genies’ platform, as well as “how to think about building their own avatar ecosystem brands and even their own audience.”
Image courtesy of Genies
Founded in 2017, Genies established itself by making avatars for celebrities from Rihanna to Russell Westbrook, who have used the online lookalikes for social media and sponsorship opportunities. The 150-person company, which has raised at least $250 million to date, has secured partnerships with Universal Music Group and Warner Music Group to make avatars for each music label’s entire roster of artists. Former Disney boss Bob Iger joined the company’s board in March.
The company wants to extend avatars to everyone else. Avatars—digital figures that represent an individual—may be the way people interact with each other in the 3D virtual worlds of the metaverse, the much-hyped iteration of the internet where users may one day work, shop and socialize. A company spokesperson previously told dot.LA that Genies has been beta testing avatar creator tools with invite-only users and gives creators “full ownership and commercialization rights” over their creations collecting a 5% transaction fee each time an avatar NFT is sold.
“It's an opportunity for people to build their most expressive and authentic self within this digital era,” Sturges said of avatars.
The company’s call for creators could be a sign that Genies is close to rolling out the Warehouse and its tools publicly. Asked what these avatar tools might look like, the startup went somewhat quiet again.
Allison Sturges said, “I think that's probably something that I'll hold off on sharing. We will be rolling some of this out soon.”
- Bob Iger, Former Disney CEO, Joins Avatar Startup Genies - dot.LA ›
- Genies Raises $150 Million To Make Avatars For The Metaverse ... ›
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Here's What To Expect At LA Tech Week
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.
The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.
From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.
DoorDash’s Founding Story: Stanley Tang, a cofounder and chief product officer of delivery giant DoorDash, speaks with Pear VC's founding managing partner, Pejman Nozad. They'll discuss how to grow a tech company from seed stage all the way to an initial public offering. Aug. 19 at 10 a.m. to 12 p.m. in Santa Monica.
The Founders Guide to LA: A presentation from dot.LA cofounder and executive chairman Spencer Rascoff, who co-founded Zillow and served as the real estate marketplace firm’s CEO. Aug. 16 from 6 p.m. to 9 p.m. in Brentwood.
Time To Build: Los Angeles: Venture capital firm Andreessen Horowitz (a16z) hosts a discussion on how L.A. can maintain its momentum as one of the fastest-growing tech hubs in the U.S. Featured speakers include a16z general partners Connie Chan and Andrew Chen, as well as Grant Lafontaine, the cofounder and CEO of shopping marketplace Whatnot. Aug. 19 from 2 p.m. to 8 p.m. in Santa Monica.
How to Build Successful Startups in Difficult Industries: Leaders from Southern California’s healthcare and aerospace startups gather for panels and networking opportunities. Hosted by TechStars, the event includes speakers from the U.S. Space Force, NASA Jet Propulsion Lab, Applied VR and University of California Irvine. Aug. 15 from 1 p.m. to 5 p.m. in Culver City.
LA Tech Week Demo Day: Early stage startups from the L.A. area pitch a panel of judges including a16z’s Andrew Chen and Nikita Bier, who co-founded the Facebook-acquired social media app tbh. Inside a room of 100 tech leaders in a Beverly Hills mansion, the pitch contest is run by demo day events platform Stonks and live-in accelerator Launch House. Aug. 17 from 12:30 p.m. to 3 p.m. in Beverly Hills.
Registration information and a full list of LA Tech Week events can be found here.
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Rivian Q2 Earnings Are a Much-Needed Nothing Burger
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
Rivian, the fledgling electric vehicle startup in Irvine, CA, released its Q2 earnings yesterday. I’m happy to report they’re pretty boring! There were no big surprises from RJ Scaringe’s EV hopeful, but here are the report highlights:
- ~$15 billion of cash, cash equivalents, and restricted cash as of June 30 2022.
- 98,000 net R1 preorders
- Amazon has ordered 100,000 electric delivery vans
- Rivian has produced 8k vehicles so far
- The company is still on pace to deliver 25,000 vehicles in 2022
- -Actual revenue was $364 million.
If you’ve been paying close attention to Rivian, none of these numbers are new or surprising. Revenue was a bit higher than anticipated–about 10% more than the $337.5 million expected. But even with the revenue bump, the company remains heavily in the red—as expected. Rivian lost $1.7 billion in Q2.
At its current burn rate, Rivian could run out of cash in about two and a half years. Obviously, the company will need to increase production to avoid this. Part of that effort will involve the company’s third consumer vehicle, the R2, which will be cheaper than the R1T and R1S models currently on offer. R2 production is expected to take place at Rivian’s gigafactory in Georgia, set to come online in 2025. Scaringe has indicated he believes the company has sufficient cash on hand to reach that milestone.
Rivian’s stock price has remained basically flat since the earnings call–a welcome change from the company’s turbulent spring. In the run up to the earnings call, some analysts were forecasting as much as a 12 point swing in either direction.
Boring Q2 numbers may actually be a good sign for the embattled EV maker. An even better sign would be positive cash flow, but the newest numbers indicate that milestone is likely still a few years away at the very least.
- Rivian Delays SUV Delivery - dot.LA ›
- Electric Vehicle Startups Aren't Immune to the Market Plunge - dot.LA ›
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.