AT&T Reportedly Shopping Its Xandr Ad Unit In Strategic Shift

AT&T, which entered the second half of 2020 with $152 billion in net debt, is said to be shopping its Xandr advertising unit.” data-reactid=”28″>AT&T, which entered the second half of 2020 with $152 billion in net debt, is said to be shopping its Xandr advertising unit.

The detachment of Xandr from the company would mark a dramatic reversal of the company’s strategy and undercut a key element related to the $81 billion acquisition of Time Warner in 2018. Reports in recent days have also identified satellite TV operator DirecTV and anime outfit Crunchyroll as other assets marked for potential sale by AT&T.

HBO Max, the general entertainment streaming service launched by AT&T’s WarnerMedia in May. The company plans to introduce an ad-supported tier of the service in 2021, a key part of its effort to hit subscriber targets of 50 million U.S. and 75 million to 90 million globally by 2025. Xandr, which has also been hitched to ad sales efforts at networks like TNT and CNN, has been name-checked often in reference to the expansion of HBO Max, but the role it would play has not been fully articulated.” data-reactid=”31″>Advertising is expected to play an important role in the future of HBO Max, the general entertainment streaming service launched by AT&T’s WarnerMedia in May. The company plans to introduce an ad-supported tier of the service in 2021, a key part of its effort to hit subscriber targets of 50 million U.S. and 75 million to 90 million globally by 2025. Xandr, which has also been hitched to ad sales efforts at networks like TNT and CNN, has been name-checked often in reference to the expansion of HBO Max, but the role it would play has not been fully articulated.

In October 2019, at an investor day held on the Warner Bros lot in Burbank, AT&T CEO John Stankey mentioned Xandr. “As ad dollars follow this shift in viewing, and we manage the downtrend on cable networks, we’ll leverage Xandr to monetize increased digital AVOD inventory,” he said. “Programmatic and targeted advertising associated with high quality content is a winning combination.”

Xandr, a shorthand reference to the company’s ancestral technology pioneer, Alexander Graham Bell, became the name for AT&T’s ad-tech operation in 2018. The rebrand followed the $1.6 acquisition of AppNexus, which operates one of the leading online ad exchanges. Xandr was designated as a separate business unit, under the theory that its data-oriented capabilities would be married to WarnerMedia content and AT&T wireless networks, powering the company’s streaming ambitions.

On a revenue basis, Xandr generated about $2 billion in 2019, a small fraction of AT&T’s $181 billion in total, though it grew 16% from 2018.

folded Xandr into WarnerMedia. Brian Lesser, who had run the division, exited the company. Mike Welch, a longtime AT&T exec, took over as the head of Xandr last month.” data-reactid=”39″>AT&T in April folded Xandr into WarnerMedia. Brian Lesser, who had run the division, exited the company. Mike Welch, a longtime AT&T exec, took over as the head of Xandr last month.

In March, Stankey characterized Lesser’s departure as “unexpected” in a memo to employees. Amplifying sentiments expressed for the prior two years by himself and former CEO Randall Stephenson, Stankey emphasized the importance of advertising to the company’s long-term strategy.

“Advertising is critically important to the future of media, and I believe platforms that evolve to accommodate both subscription and ad-supported formats will be a natural content aggregation point for the industry — not to mention a preferred experience for the customer,” he wrote.

Organizationally, he continued, “There is still much more that needs to be done to integrate and coordinate more closely our go-to-market functions between Xandr and WarnerMedia.”

Lesser on Tuesday was named executive chairman of InfoSum, a UK-based data platform. Xandr is among its strategic investors.

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