Inside HBOMax's Streaming Strategy with WarnerMedia CTO Jeremy Legg

the product functioning. Thanks for coming in, Jeremy, Thanks for having me, and it's great to be one of the brightest minds. My staff is an elite, elite group of people. That's awesome. UM So we're sitting here talking in early December. The launch at this point is months away. I don't think you guys have said we're public about that, and so even though we're here in December, I'm just curious in the process of ensuring this thing goes off without

a hitch. Where are you Well, So we're we're basically at our first beta. Um So. We just launched an internal beta recently um and brought in a lot of the content from Turner and HBO and Warner Brothers um and so we've expanded the HBO Now and Go application as consumers might think of it, and rebranded it as HBO Max and made it a multi tenant technology platform that can support not just the HBO brand, but all

of the brands of the broader company. So we're it's internal right now, we haven't released it out to the broader consumer base, but there's an app there and it works and when you press when you press play, the video plays. Got it. And I assume there's you know, plenty of meetings with with the the Green Blacks and Riley's of the world. I'm talking about the gentleman who we are running the content side of this. Do they

leave you to do your own thing? Or is it all everyone's getting in each other's businesses, regardless regardless of whether it's content or distribution. Well, I asked Bob and Kevin to write code for me regularly, but they but

they but they have so far declined that honor. But we work very closely with them, right So they're obviously, you know, building the content, selecting the content, and then we work collectively on how that content is going to be featured in merchandise inside of the application, and also a lot of the product features associated with what we're building.

So it's it's a you know, this is a this is truly a corporate wide effort um involving you know, both the leadership as well as the working teams across many organizations, and so we work very closely with them on all of this. And you're not starting from scratch. It's not as if the HBO or Turner brands are new to streaming. You mentioned, you know, HBO Go and HBO. Now how much of a leg up does that give you or from an infrastructure perspective, is it like a

clean slate? It gives us a pretty significant leg up. I mean, there's some downsides to it, but I'll talk about the positives first. On on the on the positive side of the ledger, you know, we have a scaled platform. That platform delivered Am of Thrones. We did four point six four point seven million concurrent streams on the final episode and millions more before that, and so we know

it can handle large video loads. We know it can handle lots of consumers coming into the application, and uh, you know it's a brand that you know, millions of consumers have access to today and use the application today, So you know, we're starting from a strong foundation, and so we're working now on how do you merchandise more brands inside of that application than just Hbo because obviously this becomes everything from DC Comics to you know, Turner

Properties and other components or other content brands across the broader company on the other side of the fence. And the part that's a little bit more of a challenge is, you know, you've got millions of people using HBO going now, and they're going to start using HBO Max. So how do you get seamless consumer transitions from those legacy applications into um HBO max for example, UM how do you translate all of their personalizations and recommendations into the new app?

How far do you go with that? And so you know, those are things you wouldn't otherwise have to work through if you had a clean slate and you were launching the app for the first time. But I'll take those problems. I'll take the problems of having millions of people using your application and working through that rather than starting at zero. Yeah, it's a nice standing start. Does that mean that brands like HBO Now will continue in the HBO Max era. Yeah, it does. I mean the HBO Now and Go brands

are not going away. HBO as a brand, more importantly is not going away. It's you know, a central brand for the broader company. Um. The challenge for us is how do you maintain HBO as a brand and a product separate apart from HBO Max, but then also take HBO Max and make it a broader brand umbrella for

the other properties of the company. So it's a you know, this is something we talked with with Kevin and Bob about regularly, Andy Forcel and Tony Consalves on the on the product side is how do we build the technology in such a way that the publishing and editorial teams can feature these applications in such a way that they

maintain their brand identities. And so it's it's a you know, when I talk about sort of multi tenant, that's really what I mean is, you know, how do you have HBO live in there, but how do you also have DC Comics live in there? How do you also how do you also have the other brand properties of the company living there. It's it's an interesting challenge for us. You know, CNN is going to be in this application, um, and so you've got a lot of brands that normally

people don't think about sort of coexisting together. And so you have to bring all that into one application and create a way for people to find that content, personalize that content, recommend that content, and navigate around the application in a coherent way. I guess I I never stopped to think of the as you put it, the multi tendency as as an issue because I just assumed you're

grabbing a bunch of content. It all has different labels, network brands, and you dump them into the streaming service. I know I'm making this ridiculously simplistic, but are you somehow SI justesting that even though we're kind of moving away from the traditional linear system in this streaming world,

that these brands maintain some kind of distinct presence. Yes, I mean, uh, you know there will be capabilities to cut across brand so as you you know, as you do search right, as you look at genres or things like that, those aren't brands specific. But some of these brands are very strong. They have um, you know, cult followings and fan followings, and we don't want to diminish that. So we want areas of the application to feature those brands and allow consumers to dive deep inside of those

brands to discover things around Batman or Superman. I mean, these are iconic kinds of things, and so we don't want to simply merchandise things and just sort of throw it all into one funnel and say, go find your content. So they'll be you know, curated components of this. They'll be brand areas associated with this, you know, much of which we showed, for example, during Investor Day. But then they'll also be ways for consumers to navigate to specific

content that they may want. So you know, you can go into the search bar and it is not brand specific, so you can go and find any content that you want in that way. From a product perspective, is there something about HBO max is a streaming service that you think will set it apart from some of the others in this space. Is there some sort of strategic tech that you guys are taking in terms of u X or infrastructure. Well, I think there's I think there's a

couple of things that we're doing. One. I'll start on the product side and then another I'll talk on the tech side. On on the product side, Yes, we want there to be computer driven algorithms associated with personalization and recommendation, and we'll build those things. Those are valuable things, um. But what we also want to do is is add an element of curation to this that we don't really think exists in the spot space at the at the degree to which we have or to degree to which

we're building into the product. So as you think about, you know, the sort of endless scrolls of tiles that exist across most of the spots us is they're largely

just driven by an algorithm. We want sections in there where we can actually curate and publish content specifically by humans and have that capability there so that if we want to merchandise or feature certain things around you know, Batman or Superman or classic movies or whatever, it might be that they're publishing capabilities where you can feature things.

So akin to if you think about the way you know Turner Classic Movies does thirty days of Oscar or thirty days of James Bond, those are human curated kinds of capabilities. We want those capabilities as well as algorithmic capabilities to deliver consumers at different experience. Okay, I'm curious also as we talk about HBO Max and launching into the teeth of the so called streaming wars, do you

look around at the competitors. Are you kind of studying them Disney Plus obviously in the market now, Apple TV Plus in the market now or is it more like, you know, we just keep our head down and create the product we're going to create. Well, I mean, I hate to maybe a non answer answer, but the answers yes. Um, of course, we look at what the competitors are doing, and we look inside of their applications and the features

that are there. The consumers have clearly decided they like, and we have to make value based decisions about, you know, whether we're gonna put that in our app or not put that in our app. Um. But with all that said, at the end of the day, you know, we can't spend all of our time worrying about what Disney does or what you know NBC does, or what Netflix does. We have an app we have to build, and we

have to believe in the product that we're building. And so while we pay attention to it and we look up over the horizon and and certainly note the things that they're doing. Um, you know, we obviously went in and looked at the Disney Plus application when it launched. At the same time, we've got a roadmap that we're trying to deliver against. We've got a value proposition we're trying um to deliver against, which we think is a bit differentiated from our competitors. And we don't have time

to worry about it. We we've got to launch an app and you know, five six months and there's a lot of work to do. Do you have like those next six months, uh six months you know sketched out within an inch of itself? And in other words, is there you just know everything that needs to happen operationally at this point and it's all sort of mapped out more or less. Yeah, I mean they're you know, we've got all of our scrum teams, you know, assigned work

right up until the launch. We know when we're going into QA, we know when we're going into code freezes and all that. You know. With that said, there's always requirements that pop up here and there via discussions with the studio side of the house, the product side of the house, or the distribution side of the house, and so there are new things that pop up, and we we have to make prioritization decisions about squeezing one thing out and moving it to a subsequent release. But for

the most part, the roadmaps pretty baked. I mean, uh, if to launch something of this scale, um, you can't be making it up at this age of the game. You need to kind of have your ducks in a row. I would imagine something like this. You know, in any company, you get a sense of what are priorities, what perhaps

takes the oxygen away from other things. Is this kind of like an all hands, all consuming thing that to some degree presents a challenge in terms of balancing the resources there versus you know, keeping the lights on in other areas of the company. Yes, I mean, uh, certainly.

You know, I think one of the challenges that our company has had, and I think a lot of media companies have had, is that you know, if you look at a Netflix or or you know, a spot service out there, um, and they you know, they do a great job with their product, and you know, consumers have clearly decided that they like it, but they have thousands of people that work on one app UM, and historically most of the major media companies really haven't done that.

You know, we're supporting dozens of applications and broadcast plants and all those kinds of things. I think one of the big things that's really changed in in the roll out of HBO Max, and I would suspect it similar at some of our media appears, is that people are taking this much more seriously than they have in the past. They're throwing significant content resources against it and technology resources

against it. And so does it UM, you know, mean that the sort of capital distribution across the technology organizations is slanting towards HBO Max. The answer is yes, UM. What I would also say with that is it should you know it. We are at a moment in time, I think, in our business model and cycle where we have to start throwing more of the capital against UM, both the innovations that we're doing in the streaming space as well as as well as the product side of

the house. And that doesn't mean no other brands receive capital, but it does mean that that you know, we're we are really putting our shoulder behind doing this. It sounds like a lot of plaque pressure too. It is, but you know, this is actually the fun stuff, you know. I mean, yes, it's pressure, and and if it doesn't work, there may be a new CTU of Warner Media at

some point. But but you know, you're building things, you know, I mean, you're you're you're playing offense, um, and you're gonna release a product, honestly that the company I think will be very proud of. And I think that even though people are working very hard, they're excited about what they're doing because it will not only be a significant event for the company, but we think it will be something that resonates in the marketplace. UM. So that's sort

of the good pressure. There's other things that are bad pressure. But but you know, I don't enjoy doing budgets all the time, and I don't you know, enjoy, you know, doing cost reductions. But you know, you have to do some of those things in order to free up capital to do things you know, where you're playing offense. And as long as as long as you know, look, we're gonna have three swings at the plate on this and

and I feel good about our batting average. Well when Disney Plus stepped up to the plate, as I'm sure you saw tremendous demand, but then some technical problems that came with that. Do moments like that give you pause that you say, oh my god, I hope we don't have to deal with that, or uh, what can you really do even to to take precautions? Yeah, I'd say that there is an unwritten code amongst c C t

O s where you feel for the other person. That's that's going through it because anyone who's you know, run large organizations or or you know how direct to consumer products, you know, you've had stumbles and that's what technology. Uh, that is unfortunately a reality of building scale technology. So you know, I feel for my peers on the other side of the world, and that's certainly not something that they wanted to have to have happened. With that said,

you know, there are learnings associated with with UM. You know all these things, and a lot of them are around scale UM and how much scale you build in the public cloud, not just for streaming, but for authentication

systems and entitlement systems and building systems. And you've got to run through a pretty robust set of use cases, both in terms of human banging on this and testing it, but also automated scripting and automated testing to do load balancing across all of these different areas so that you feel like you're releasing an app that um is pretty battle tested. I don't know exactly what happened on the Disney application, but at the same time, they had enormous

demand for it out of the gates. So if if you had to pick a reason that something failed, too many people trying to get in, it is probably probably problem of a high class problem. And you know, if I I hope we don't have any technology failures, but if we do, I hope it's because the demand so high that that uh that UM, you know, we're we're trying to meet the demand. UM, not for other reasons.

But is the nature of this kind of product, you know, streaming software based the years, is it really no different than say, back in the fifties when the television picture. We'll have all sorts of problems. Is it the kind of thing where these kind of problems you just have to say okay for a technology in its infancy, this kind of comes with the territory. Yeah, I think, UM,

to a degree, that's true. UM, you know the you know, I run the broadcast side, for example, of the company as well, and those you know, deliveries to a television set today and largely historically have been in closed ecosystems. You know, the technology is largely wholly owned by the programmer and the distributor, and so you have a higher degree of confidence that when you deliver a video bit from point A to point B, that it's going to make it there because there aren't as many ways for

it to be interfered with. This is Internet distribution, and you know, you you don't own the end to end way that video is delivered. You don't own the device, you don't own the operating system on the device, you don't own the browser on the device. You own the app on the device, but it's built for that specific operating system. And the way video actually makes its way down through a CDN, or through the web, or through you know, the various other methods that video goes down

to a device, you don't generally own those either. So you're building software that sits on top of all of these other things, and so the number of places where you can have problems that you don't control U are just broader than they are on the broadcast side of the fence. Consumers don't care. Right. The consumer expectation is is that this is going to work as well as it does when I turn on my TV set, exactly right, And so they don't care about all the sausage and

how it's made on the back end. Um, I have to do that. And so you know, we we for the way videos delivered over the Internet, are going to take our lumps around how we deliver this, whether it's on demand video or live video, which is even a completely separate challenge on the Internet. Um, until we get it right. And it's certainly vastly improved than it was ten years ago. Um, but it's not all the way to where it needs to be relative to meeting consumer

expectations about the way traditional television was delivered. And I guess in taking your lumps, you learn, you figure out where the problems the vulnerabilities are and you're better off

for it. Or is that just kind of well you you do and and you know, look there's this and I think it's just this interesting trade off right now is that on traditional television, for the most part, the video works when you turn it on, but the consumer experience around the video isn't great, you know, if it's a traditional set top box, whatever it might be, And consumers have clearly said, I don't really like the way that this video is delivered to me, even though it

comes on right away when I turn on my TV or I changed the channel. On the Internet side, it's feature rich, it's software based, in the set of capabilities and ways you can watch video is vastly better than it is on traditional television. But the video delivery ecosystem that sits behind that, uh, is not wholly owned and

it's not a closed system. So yes, I mean, the short answer to your question is is you do have to learn about all these different mechanisms and figure out methods that you can use in order to smooth things over.

So you know, here here's just a simple example. The reason primarily that live video when it travels over the Internet lags the delivery time associated with television, right, and your notes it's seven or ten seconds behind on you know, in some cases will be up to fifteen seconds behind on live video streaming over over the open Internet is so that you can fix video problems upstream before they ever hit the consumer device, right, and so you can

fix video bit problems along along the video river that's going down to the device. Um, and so lots of that kind of stuff happens, and there's a little checkpoints along the way for the way video is delivered that enable people to fix it before the consumer ever sees it. Over time, that will prove over time you will get to low latency video feeding, low latency video feeds all the way down to the device. Um. But today, uh, it's harder to do that because the tech stacks are heterogeneous.

So the more heterogeneous the end in tech stack is, the harder it is to do those types of things. You've been at Warner Media long time before it was called Warner Media, back at the time Warner days Turner. Um, I'm the last I think A O L refugee that's still. Yeah, there's there's only I know that everyone they wanted only, but there's not many of us left. Yeah, I actually originally started at A O L. So it's uh, there's a few of us hiding out with our A o

L T shirts on. Well, the thing I was wondering about and it's it's actually this question I think becomes more interesting by your A o L background as well. Is is there something about launching this massive streaming software based product within not just a traditional media company, but also now that a T and T is in the picture, you know, a telco, uh, not a traditional tech company like a Google or a Facebook. Is there a cultural challenge that comes with taking this on in that kind

of environment? Um? Yes, in the sense that you know, they've been very focused on traditional telco infrastructure, and so you know, you're working with telco building systems and other types of things that you know aren't things that you

would normally encounter it an Amazon or at Google. But I think that's honestly more than offset by the distribution opportunity that we have through bundling with wireless and bundling with fiber, and a lot of the infrastructure capabilities that a T and T has, you know, I mean they've got now it is a hundred and fifty or some odd million direct to consumer relationships that we can now

leverage to distribute HBO Max. And so while there are technical challenges in doing bundling with the way that you know, wireless accounts are created, did that's a problem were solving? Um? Because it's a unique proposition that we have given that all that sits in the same company, where we can look at how we bundle HBO Max with other owned

properties across the broader A T and T enterprise. But culturally speaking, is there something about product building that is uniquely a function of a true tech native culture or you know what if media or telco's spend enough time and money on it, it's the same thing. Um, I would say culturally there are differences, um, you know, because there are. You know, it's really the difference within you know, say an A T and T between a pure software

culture and then a networking and infrastructure culture. You know, and and it's all tech and it's all important tech, and consumers don't get to watch anything if all that stuff doesn't work together. But obviously most of of A T and T s broader organization, and it's a big one, is focused on wireless, you know, last mile fiber delivery, UM and networking infrastructure. And they're excellent at doing that, and they're better at it than we are. Um. We

are more of a software based culture. And that's not to say there aren't certain parts of A T and T that have that, but you know, they don't release a lot of apps UM, and so we work with with different parts of that organization that have the software based culture. That's that's more consistent with the way that we've worked in the past, but we're also learning how to work with some of the other organizations that exist there.

And it's worth doing because you know, when you when you think about UM, you know, high end video delivery, you want to work with the five G people at A T and T, you know, you know, so those kinds of things, while culturally it's a little bit different. You know, a wireless network engineer is not a software engineer.

That's a that's a marriage that's worth trying to broker between the software person and then the network engineer because ultimately you can deliver video down to the humor at higher quality and lower cost if you get those two people talking the same language. I also wanted to drill a little more into this notion of A T and T s leverage. It's some giant mobile footprint. I feel like that gets to the whole underlying rationale for the A T and T acquisition of Warner Media. This combination

of distribution and content could do great things. So for if I'm the consumer, if I'm an A T and T handset owner, uh am, I going to see things with HBO Max that will be uniquely examples of what it is to combine these two things. Yeah, I mean, certainly they're they're on. There's several answers to that question. Certainly on the marketing side. You're going to see that in the way that we bundle, you know, HBO Max with the different A T and T products, for example.

But the other things that we're able to start you know doing, some of which will be at launch and some of which will be later, are tho way of folks authenticate into the product. So I mean, if we know and already have a directed consumer relationship with you, why do you have to sign in twice? Right? You know? Why why can't you do things like simcard based authentication.

Why can't you do things where you enter a certain set of credentials into an A T and T phone and it automatically authenticates you into HBO Max and do various flavors of single sign on. So things like that. We are very much investigating as to how we we essentially remove the friction between the consumer and the application itself. That's not to say that we wouldn't do that with

other providers. Um, we certainly would, but it's obviously easiest to start with ourselves and build some of those sets of capabilities so that you know, the the experience that a consumer has through an A T and T phone is as optimized as it can be. So I'm guessing these days, HBO Max, it's taking your time or upwards of that. What else does a CTO you at a television company in terms of broadcast operations? What other things are or maybe not as top of mine as HBO Max,

but top of mind. Yeah, I'd sort of divided into several buckets. So you know, we work very closely on on the data and advertising side. So both are you know, are digital across all of our digital properties, whether it's CNN dot Com or or um you know, March Madness

or other properties that we serve. So we still have to you know, serve that video and enable advertising in it and work with Zander and and the other parts of A T and T to leverage the data that they have to create audience segments that help us target advertising and target content to consumers. So we spend a lot of time working on that we've recently actually deployed you know what I think is the largest I P

broadcast facility certainly in the country. UM. And so all of our networks, inclusive of HBO and CNN and our entertainment properties run under an IP broadcast UM model at this point. So I ronically need no JS developers on HBO Max and I need them in our broadcast world because that's formally transitioned. And then obviously we have the election coming up, so I spend a lot of time on on CNN and and you know, whether it's the

primaries or it's the debates or all those things. You know, we provide the technical infrastructure that sits across all of that UM as well as CNN Digital and those other and those other digital properties. So it's, UM, it is a very busy time between HBO Max and the election. I don't know how you're gonna sleep in, but yeah, it's UM. I mean that's the fun part, you know.

I mean it's it's a lot of pressure. UM. But you know, that's kind of the stuff you remember when you you know, if you look back on your career, you remember those moments, UM and and how well you did or you didn't do in those moments, So enjoy that. And I have a great team that that assists this. It is, but it is hardly me that's doing all this, that's for sure. Well, speaking of that team, is it a team that I assume has been beefed up considerably

as all these new challenges come to your on your plate. Yeah, we're we're you know, certainly the HBO Max team has expanded significantly, you know, since we really made that commitment, and then we've done a variety of things in terms of combining technology organizations, primarily between Turner and HBO UM

to really give us more scale and specific areas. And then we recently did this on a global basis, so it's both domestic and international UM and uh, you know, those organizations support all of the aforementioned brands and properties UM and so in some cases we've cut back because those businesses no longer warrant, you know, the levels of attention that they've had historically. But it's essentially a capital redeployment exercise. It's not a let's cut for for cutting sake.

It's you know, these are the places the companies decided to invest, and so whether it's you know CNND Digital, or its sports, or it's you know, data and advertising, HBO, max As or you know, probably the four biggest pillars associated with our growth. And and so we're we are open for business and have a lot of open roles. Uh that so any engineers that are out there paying me on LinkedIn, I mean imagine it's probably quite a race out there between you and other companies in terms

of getting the best engineering talent. You feel that, oh, absolutely, I mean it it. Uh, there's there's a race for tech talent. And you know, I I like our position here. Um, we have a lot of geographic diversity. You know, we have a significant presence here in l A. We have a huge presence in Seattle and New York as well as in Atlanta domestically, and then we have international locations

from London to Amsterdam, duennas areas. So it's, um, there's a lot of opportunities and a lot of different parts of the globe. And you know, we were you know, there's a sort of essentially call it the race to the middle. You know, we've got we've got media companies that have been great at content for a long time that are now trying to get great at tech, and you've got a lot of tech companies that have been great at tech for a long time, and they're trying

to get great at media. And we're all kind of racing to the same place, but on two different paths, and we're all now competing for the same group of tech talent. And so, you know, the way we recruit UM, we're recruiting the same groups of people, but our pitches

are a bit different, you know. UM. You know, one of the best recruiting tools that we have beyond obviously you know, paying competitively and those types of things, is you walk someone around the studios at HBO or CNN or Warner Brothers and say, hey, you know, would you like to come here and work on this stuff? And you know, we usually get those people. So it's there's a compelling value proposition between you know, really being in a scaled content company and then a technology arm of

a content company that's in investment mode. And you know, so we've had a lot of success, you know, pulling folks from some of the traditional technology companies UM and historically they've pulled folks from US and UM. I like the trends well My guess is you're gonna be doing a lot on the hiring front this coming year. Looking forward to seeing HBO Max come out of the gate in t Thanks for coming in to talk to me today. Yeah, it was great. I appreciate it, so thanks for having me.

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