May 27, 2020
WarnerMedia’s much-hyped subscription streaming video service, HBO Max, launches today (May 27) as the most-expensive over-the-top video platform ($14.99) and last to join a crowded SVOD market dominated by Netflix, Amazon Prime Video, Disney-owned Hulu and Disney+.
“Today we are proud to introduce Max — a dream that was created and nurtured by an incredible team of talented executives who dedicated the last year-and-a-half to making it a reality for consumers nationwide,” Bob Greenblatt, chairman of WarnerMedia Entertainment and Direct-to-Consumer, said in a statement.
The service, which will include a less-expensive ad-supported option, bows with more than 10,000 hours of content targeting as wide an audience (kids included) as possible — unlike traditional HBO, HBO Go or HBO Now.
Among the movies featured on the new service: all eight films in the “Harry Potter” franchise.
“There’s got to be more frequent [viewer] engagement,” John Stankey, who will soon succeed Randall Stephenson as AT&T CEO, said during Max’s media unveiling last October.
That means HBO’s “True Detective” and “Game of Thrones” viewership has to expand to include families seeking libraries of Looney Tunes, Merrie Melodies and Hanna-Barbera content, in addition to re-runs of “Friends,” which WarnerMedia paid $425 million to itself (Warner Bros. Television) for exclusive streaming rights. A big-budget reunion special episode was put on hold due to the coronavirus pandemic shuttering production.
Backed by a $4.8 billion war chest over the next several years (relatively small compared with Netflix’s reported $17 billion spend this year alone), with plans to secure 50 million subscribers by 2025, Max is setting itself a high bar for achievement — or failure.
Max is also appealing to DC comics fans with pledges to release every “Batman” movie on the platform, in addtion to Aquaman and Wonder Woman, among others. This strategy puts Max at odds with DC Universe, the $8 monthly streaming service that features a slew of original series. Currently only “Doom Patrol” is migrating over to Max.
“The competition is actually more about content than anything else, and whatever’s on Max is not going to be available to Netflix or Disney+,” said Michael Pachter, media analyst with Wedbush Securities in Los Angeles.
Pachter contends that with the HBO brand already available to about 140 million households, it’s just a matter of time before a percentage of them migrate. Max is now available to existing HBO and HBO Now subs at no extra cost.
Pachter said the only question is how many households will keep pay-TV in a global recession due to the coronavirus pandemic.
“My guess is that conventional HBO loses a lot of subscribers (probably 5 million) over the next year or so, while Max adds two to three times that many, so net, they probably grow from 140 million to 150 million subs,” he said.
Indeed, HBO Now direct-billed subs, as well as those who are billed through Apple, Google Play, Samsung, Optimum and Verizon Fios Internet get access to Max at no extra cost, with the Now app automatically updating to the Max app on supported devices.
Current HBO subs who are direct-billed through AT&T, AT&T TV, DirecTV, AT&T U-verse TV, Cox, Hulu, Optimum, Spectrum, Suddenlink, Verizon Fios TV and select independent cable, broadband, and telco providers through the NCTC like WOW!, Atlantic Broadband, RCN and MCTV, among others, also have access to Max at no extra cost.
All that is required is downloading the Max app and then electing to access the service on supported devices or via desktop and log in using an existing provider’s username and password.
Notably missing from Max’s debut: distribution via Amazon Fire TV (and Amazon Prime Channels) and Roku — the latter with more than 40 million subs. The platforms have traditionally been key for third-party OTT launches — including HBO Now, which generated much of its 8 million sub base through Amazon and Roku.
Amazon and Roku typically take a cut of subscription revenue, in addition to keeping control of user data, among other conditions.
“While we don’t typically comment on specific deal terms or negotiations, the fact is that in this instance while we believe that HBO Max would benefit greatly from distribution on Roku at launch, we do not currently have an agreement in place,” a spokesperson for the streaming media device manufacturer told Lightshed Partners’ Richard Greenfield earlier this month.
“These guys are going to divide up the [pay-TV] world … I expect some to count ‘only’ domestic subscribers [in the beginning], so it’s going to be noisy,” Pachter said.