AT&T detailed plans to restructure its Warner Media business in a memo to employees today.
The American telecommunications giant is preparing to enter the world of streaming and do battle against Netflix and Disney.
Last week, it defeated the US government’s efforts to undo its $85bn (£65bn) purchase of Warner Media, formerly called Time Warner, on antitrust grounds.
“At a time when we must shift our investment focus to develop more content for specific and demanding audiences on emerging platforms, we can’t sustain a model where we invest one dollar more than necessary in the administrative aspects of running our business,” Warner Media chief executive officer John Stankey said in the memo, according to Reuters.
“Put simply, our priority is to direct resources to product development and innovation”, he added.
It is hoped that this tough approach will save money which can be pumped into programming. AT&T will launch its subscription video streaming service late this year, but is competing against Netflix, who have spent heavily on famous names in TV and film.
AT&T’s takeover of Warner Media means it now controls news channel CNN, Game of Thrones-maker HBO, and Cartoon Network, which will all be available on its streaming service.
It is a time of consolidation and intense competition in the film and TV industries. Disney’s shareholders approved a $71bn deal to buy Twenty-First Century Fox’s film and TV assets in July 2018. It is set to launch Disney+, its own streaming service, this year.
Last week the BBC and ITV confirmed that they will be joining forces to create their own streaming service, called Britbox.