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WarnerMedia restructures to focus on HBO Max ahead of Latin American rollout

The company is aiming to beef up the service as it battles with Netflix, Amazon and Disney+ for streaming video customers

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  • The restructuring marks the first major action taken by WarnerMedia CEO Jason Kilar, a former Amazon executive who built Hulu;
  • WarnerMedia also said on Friday it would cut jobs, without disclosing the number of employees affected, as it was hit by a drop in ad sales.

WarnerMedia executives Bob Greenblatt and Kevin Reilly, who oversaw the creation of the HBO Max streaming business, will leave as part of a broad restructuring focused around the streaming service, which will start its international rollout in 2021, beginning in Latin America. The platform debuted in the United States last May.

The restructuring marks the first major action taken by WarnerMedia CEO Jason Kilar, a former Amazon executive who built Hulu. “We’re laser focusing on HBO Max and lifting it up in the organization,” Kilar said.

Parent company AT&T hired Kilar to take charge at WarnerMedia as it battles with Netflix and Walt Disney‘s Disney+ for streaming video customers.

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Bob Greenblatt will leave his post as chairman of WarnerMedia Entertainment, after overseeing the creation of HBO Max. REUTERS/Mike Segar

The wireless carrier, 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 in November last year, had 60.5 million paying customers as of Monday. Netflix, which launched its streaming service in 2007, ended the second quarter with close to 193 million paying customers globally.

A hit from dropping ad sales

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

Media companies have been hard hit by severe drops in ad sales as marketers reel in spending due to the global coronavirus outbreak. The pandemic has also halted production of original material, starving streaming services of new content needed to fuel subscriptions.

READ ALSO: Disney announces Disney+ launch in Latin America for November

Hollywood studios have been forced by the pandemic to find ways to recoup lost sales. Some have released feature films directly to consumer over streaming services.

Comcast‘s Universal Pictures recently negotiated a deal with cinema chain AMC Entertainment to allow the studio to release films directly to consumers after just three weeks in theatres, down from the usual average of three months.

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Kilar said WarnerMedia continued to support theatrical releases for films including director Christopher Nolan‘s spy action film Tenet and Wonder Woman 1984, but saw room for change. “It’s fair to say we all want to lean into the future. If you don’t that’s not a good strategy,” he said. “Where I think that takes us is shorter windows than historically the case.”

AT&T’s revenue from the WarnerMedia segment, including HBO, fell 22.7% to $6.8 billion in the second quarter, with the pandemic having a $1.5 billion impact on sales.