The move appeared to be the latest by WarnerMedia, under AT&T's ownership, to streamline operations by cutting niche-oriented business ventures. Two sources familiar with the decision said the plan to kill FilmStruck was made prior to AT&T's closing the Time Warner deal; in any case, the strategy aligns with the new WarnerMedia blueprint to shift resources to mass-market entertainment services.
The FilmStruck business will cease U.S. and international operations on Nov. 29, 2018, and the service stopped accepting signups on Oct. 26. A Turner rep declined to comment on how many employees will be affected by the closure or provide info on how many employees work on FilmStruck.
In a statement, Turner and WB Digital Networks said, "We're incredibly proud of the creativity and innovations produced by the talented and dedicated teams who worked on FilmStruck over the past two years. While FilmStruck has a very loyal fanbase, it remains largely a niche service. We plan to take key learnings from FilmStruck to help shape future business decisions in the direct-to-consumer space and redirect this investment back into our collective portfolios."
The shutdown of FilmStruck, which debuted in November 2016, comes after two other WarnerMedia digital units have gotten the axe.
Warner Bros. Digital Networks' DramaFever, a subscription VOD service specializing in Korean dramas, was abruptly shut down on Oct. 16. One week ago, Turner announced that it was pulling the plug on edgy digital-content and TV studio Super Deluxe.
AT&T earlier this month signaled that it would move to restructure the WarnerMedia video-streaming portfolio. As part of announcing plans for a broad subscription-streaming entertainment service anchored by HBO that would pull in content from other parts of WarnerMedia, AT&T said it would be "consolidating resources from sub-scale D2C [direct-to-consumer] efforts."
A source familiar with AT&T's strategy said the telco is looking to eliminate peripheral projects that aren't major producers of revenue. "They felt Time Warner overall had too many initiatives," the exec said. "[AT&T] have their hands full. They have no time to think about, 'What do we do with this growth property?'"