Kantar: HBO Max Took 20% of New SVOD Subs in Q4

Broader app placement and a hit movie certainly have helped WarnerMedia’s HBO Max subscription streaming service, with a new data from Kantar Worldpanel showing the service took 20% of all new SVOD subscribers in the fourth quarter of 2020 ended Dec. 31, 2020.

That’s up from 13.4% in the third quarter. The research firm said last year ended with 233 million SVOD subs in the U.S.

For the full year, Disney+ led all services with 18.3% of new subs, followed by Amazon Prime Video (17%), Hulu (13.2%), Netflix (12.5%), Max (12%) and Apple TV+ (6.2%).

In the crowded SVOD market, HBO Max launched last May and struggled out of the gate due to a variety of issues, including disputes with Roku and Amazon over app placement and a confusing debut while HBO Go and HBO Now were still operational.

Since then, the two other HBO streaming services have been shuttered and Max has become available on Roku and Amazon Fire TV. But perhaps the service’s biggest boost was the same-day streaming access to theatrical release Wonder Woman 1984.

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Dominic Sunnebo, SVP at Kantar, contends that while Netflix subs remain highly engaged, the content slate and current pricing proposition does not appear strong enough to drive continued subscriber growth in the presence of multiple highly competitive service launches.

Of course, Netflix again defied naysayers, besting Q4 subscriber growth estimates and generating a record 37 million in new subs in 2020. The service ended the year with more than 203 million subs worldwide.

HBO Max Names Latin America Management Team

WarnerMedia Jan. 19 announced that Luis Duran will join the company in February as GM for HBO Max Latin America. He will report to Johannes Larcher, head of HBO Max International, and will be responsible for the rollout and management of WarnerMedia’s direct-to-consumer product HBO Max in South America, which is expected to launch later this year.

HBO and HBO Max ended the most-recent fiscal period with 38.6 million combined subscribers.

Duran most recently served as chief commercial officer for the digital unit of MBC Group, the Middle East media company based in Dubai, where he was part of the successful relaunch of the group’s flagship digital product, Shahid, overseeing all revenue streams and leading the Marketing, Distribution and Analytics and Support teams.

Prior to MBC Group, Duran held senior leadership roles at iflix, a VOD service focused on emerging markets, and TIMWE, a global provider of digital and traditional content solutions.

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“We have set ambitious goals to make Max a compelling and accessible streaming option in Latin America, and I am confident Luis and his team are ready to help realize this aspiration,” Larcher said in a statement.

Joining Duran’s leadership team in Latin America are Dionne Bermudez as head of product; Jose Calderoni as head of growth marketing; Dainira Falk as legal lead; Maria Huntsberry as talent lead; Jesus Rodriguez as head of content experience; and Dario Tonelli as head of data, insights and planning.

The Max Latin America team will build on the partnership with Whit Richardson, president of WarnerMedia Latin America, and members of his team — including Jorge Carey, head of distribution; Tomás Yankelevich, CCO of general entertainment; and Pablo Zuccarino, head of kids, Latin America — in a collaboration that’s pivotal to the success of Max in the region.

 

WarnerMedia Extends HBO Max Discount Pricing

WarnerMedia has quietly extended to March special pricing for subscribers willing to prepay for 12-months of HBO Max service. The service, which traditionally costs $14.99 — the most expensive SVOD on the market — is effectively charging $11.66 monthly for subs paying the annual $69.99 charge.

Since launching May 27, 2020, HBO Max has aggressively sought to boost sluggish subscriber growth that tallied just 8.6 million subs through Sept. 30, 2020 (upped to 12.6 million in December). WarnerMedia now combines Max subs with HBO to boast more than 38 million members.

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The growth was hampered from the start when WarnerMedia failed to secure distribution through Roku and Amazon Fire TV — two major consumer gateways to third-party SVOD services. The Max app is now available on both platforms.

“We’re breaking new ground in the months ahead, and we can’t wait to work with our longtime partners at Roku to build on our past successes and bring Max’s entertainment to Roku’s large and highly engaged audience,” Tony Goncalves, chief revenue officer at WarnerMedia, said in a statement last month.

HBO Max Orders Series Based on Life of Julia Child

HBO Max has given an eight-episode first-season order to the Max Original “Julia,” based on the life of world-renowned chef Julia Child.

The series, from Lionsgate Television and 3 Arts Entertainment, stars Sarah Lancashire (“Happy Valley”) and David Hyde Pierce (“Frasier”), and is directed by Charles McDougall (“House of Cards”) and written by Daniel Goldfarb (“The Marvelous Mrs. Maisel”).

The series is inspired by Child’s extraordinary life and her long-running television series, “The French Chef,” which pioneered the now popular genre of cooking shows. Through Julia and her singular can-do spirit, the series explores an evolving time in American history — the emergence of public television as a new social institution, feminism and the women’s movement, the nature of celebrity, and America’s cultural growth. At its heart, the series is a portrait of a loving marriage with an evolving and complicated power dynamic.

In addition to Lancashire and Hyde Pierce, the series also stars Brittany Bradford (Broadway’s Bernhardt/Hamlet), Fran Kranz (“Homecoming”), Fiona Glascott (Fantastic Beasts: The Crimes of Grindelwald), Bebe Neuwirth (“Madam Secretary”), Isabella Rossellini (Silent Retreat) and Jefferson Mays (“I Am the Night”).

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“We are so happy to help bring the incomparable Julia Child back to the small screen, when we need her more than ever,” Sarah Aubrey, head of original content for HBO Max, said in a statement. “This show’s look into her life, marriage and trailblazing career as she transformed the way we talk about food is an absolute delight. Our incredible cast and formidable creative team are a recipe for success, and we couldn’t be more excited.”

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“We’re delighted to expand our relationship with HBO Max by teaming with our production partners at 3 Arts on ‘Julia,’ the complex and compelling story of the celebrated chef, author and TV personality who almost single-handedly invented the world of food television,” Jocelyn Sabo, Lionsgate Television Group SVP, said in a statement. “Combining an extraordinary creative team, powerhouse cast and timely subject matter, the series has all the ingredients to resonate with HBO Max audiences for years to come.”

CES: Warner Chief Ann Sarnoff Says Sending First-Run Movies to HBO Max Driven by Circumstances

Warner Bros.’ move to send first-run movies to the studio’s new streaming service HBO Max concurrently with their theatrical release was dictated by the pandemic, said Ann Sarnoff, CEO, WarnerMedia Studios and Network Group, during the virtual CES Jan. 13.

“We’re pivoting to be able to adjust to the environment we live in,” she said, adding, “I have some amazing movies that I would like the public to be able to see.”

As cinemas shuttered due to COVID-19, the studio made a controversial decision to release its theatrical slate through 2021, including Wonder Woman 1984 released on Christmas Day, in theaters (that were open) and at the same time on HBO Max for 31 days.

“We needed an alternative,” Sarnoff said. “Remember, this is a global theatrical release and HBO Max is only in the U.S.”

It’s very hard to launch a film theatrically in a pandemic, she said, noting that marketing in cities where a film is playing is planned out weeks in advance and, with theaters in danger of closely at any time, that wasn’t feasible.

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She noted that earlier in the pandemic the studio was able to release Christopher Nolan’s Tenet theatrically.

“We knew Tenet would play well overseas” where more theaters were open, she said.

Sarnoff joined the company in the summer of 2019, following the exit of Kevin Tsujihara, who left the position after allegations of sexual misconduct. When she discussed taking the studio job with AT&T CEO John Stankey, “he talked about breaking silos,” she said, and that has become one of her key aims.

“It is something I’m most excited about and most proud of,” Sarnoff said, noting “how siloed Warner Bros. was in and of itself.”

She has instituted weekly meetings on the company’s big franchises to discuss collaboration.

“You don’t want your fans to see your org chart,” she said, adding, for instance, “they can see the movies don’t have anything to do with the TV.”

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Sarnoff’s career prepared her well to become the first woman to head up the venerable Warner Bros. studio, she said. Before joining the studio, she was president of BBC Studios Americas, where she was responsible for driving growth and profit across the United States, Canada and Latin America. She oversaw L.A. Productions, linear and digital program sales and co-productions, home entertainment and licensing. She also led efforts to amplify BBC Studios’ global brands “Doctor Who,” “Top Gear” and the natural history brand “BBC Earth.” As board chair of the streaming service BritBox, Sarnoff guided the development and growth of the direct-to-consumer service, which offers U.S. and Canadian customers British television programming.

“My job at the BBC, I was the only executive that wasn’t sitting around a table in London, so I had to be a collaborator,” she said.

Stints at BBC and Nickelodeon helped her learn to work with “incredible franchises and IP,” she said.

Building out the franchise at Nickelodeon “has served me very well to this day” as she has the responsibility for driving such franchises as “Harry Potter” and the Wizarding World, “Game of Thrones” and the DC Universe, she said.

“We started thinking about what we could do for our DC fans this year,” she said of the superfan event the company launched virtually in September.

Called “DC FanDome: Explore the Multiverse,” the 24-hour event allowed fans to create and control their own viewing experience from more than 100 hours of on-demand content from television, films, comics, games and more — highlighting the work of more than 500 artists, writers and other talent from around the globe.

“We were able to connect virtually and celebrate the amazing movies we have coming out … as well as our TV shows,” she said, noting Venus Williams designed a whole line around Wonder Woman 1984.

Increasing diversity is another aim at the studio, she said.

“It’s a huge issue for me,” she said. “I’ve tried to blaze trails my whole career.”

She recalled having to conform to a male culture in an early job, hiding “female characteristics.”

“In terms of being a woman in this industry, it hasn’t been easy,” she said.

She says it’s a danger to have a “homogenous corporate culture where people are kind of finishing people’s sentences.”

A diverse workplace pays dividends, she said, adding that she learned from female colleagues to “get a seat at that table and make a difference.”

CES: Streaming Execs Discuss Race to Please, Attract Customers

Executives from streaming services gathered at the virtual CES Jan. 12 to discuss how they aim to please consumers in an increasingly competitive marketplace.

“We are all in this battle to make sure our customers can find our content as easy as possible,” said Stefanie Meyers, SVP of distribution at Starz, who manages its digital business.

Sarah Lyons, SVP of product experience at WarnerMedia, said the company’s new HBO Max service uses a blend of curation and data to target programming to consumers.

“About two-thirds of the time consumers know what they are looking for,” she said. “In those instances, get out of their way. Make it as easy as possible.”

As far as content, Lyons said, “you see tremendous engagement when you offer up lots and lots of content.” But that content has to be a mix of originals and catalog, she said.

Meyers agreed, noting that theatrical blockbusters with huge marketing campaigns are a draw, but “if you have a deep library, that can help with retention as well.”

Consumers are in different mindsets when they approach a service, Lyons said. Sometimes they are ready to sit down for a two-hour movie, and sometimes they just want to watch for a quick 30 minutes. She noted a trend of families coming together to watch a story, either virtually or in their homes, as families did in the past gathering around the TV.

“What’s old is new,” she said.

Indeed, streaming is the new TV, noted Andrew McCollum, CEO of virtual MVPD Philo.

“20 years from now people aren’t going to consider streaming TV streaming; they’re just going to consider it TV,” he said.

Thus, the competition is heating up in the virtual MVPD marketplace that replicates traditional TV, with consumers confronted with streamers, such as YouTube TV, that are having to raise prices to cover the cost of content, especially sports and news.

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“A lot of the services came to market with price points that were not sustainable,” he said, citing YouTube TV’s price jump from $25 to $65.

Philo took a different tack, eschewing such costly content that consumers may not need or want.

“It was never our intention to be the lowest cost service, but it was our intention to be the best value service,” he said.

Consumers can now get bundles of streaming services “for less than they were paying for cable,” he said.

Pluto TV, now owned by Viacom, relishes its market leading position in the ad-supported VOD or free streaming marketplace, as well as the content available from its parent, said Pluto TV SVP of programming Scott Reich. Pluto fills a niche in the Viacom streaming strategy, he said.

“It’s about creating a complementary ecosystem,” he said. “Pluto is the priority on the free service side of things. Paramount+ and Showtime are obviously the priority on the paid side.”

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Content from Viacom is filling Pluto’s AVOD pipeline, delighting customers with classic shows.

“This year we added a lot of CBS content,” Reich said, allowing Pluto consumers to revisit “Three’s Company,” “Love Boat” and “Happy Days,” among other classics.

“What’s old is new again,” he said.

 Being a free service is an advantage in the crowded streaming market, he noted, “You just fire it up, and it works.”

CES: Sony Touts Games’ Expanding Movie/Streaming Presence

In the wake of last November’s launch of the next-generation PlayStation 5 video game system, Sony Interactive Entertainment (SIE) used Sony Corp.’s annual (and virtual) CES media presentation to showcase PlayStation’s expanded foray into film and TV with a diversity of stories.

As with much of Hollywood, PlayStation, along with Sony Pictures Entertainment, pushed back most of its new original content releases to 2021 and beyond due to the ongoing coronavirus pandemic.

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In addition to continued development of the “Spider-Man” franchise, two PS properties eyeing both theatrical and episodic TV adaptations in 2021 include Uncharted, featuring Tom Holland (Spider-Man: Homecoming) as a live-action young Nathan Drake and Mark Wahlberg as Victor Sullivan. The film is now set to release on July 16. Separately, Sony Pictures Television and HBO are creating a limited series around the video game The Last of Us for subscription streaming platform HBO Max.

The studio also has a partnership with Hivemind Productions (creator of Netflix’s “The Witcher”) for a live-action adaption of the Final Fantasy XIV series games.

“This is just the beginning of the expansion of our storytelling into new media and even wider audiences,” Jim Ryan, president/CEO of Sony Interactive Entertainment, said in a video clip. “Sony is a creative entertainment company and entertainment has never been more important. Our community are networked like never before and are more diverse than they have ever been. And we celebrate and embrace the differing viewpoints and tastes that make up our community.”

Indeed, Sony Pictures CEO Tony Vinciquerra last month announced that the studio was working on three movies and seven TV shows based on PlayStation games, including the recent actioner Monster Hunter, starring Mila Jovovich and Tony Jaa.

“You’ll be seeing a lot more integration of Sony companies together in the future,” Vinciquerra told CNBC.

Warner Bros. Revamping Movie Compensation in HBO Max Era

Following Warner Bros. Pictures’ decision to release its 2021 theatrical slate concurrently on subscription streaming service HBO Max in consumer homes (for 31 days) due to the ongoing pandemic, some content creators and talent representatives cried foul, claiming they and their clients were being shortchanged by the new policy.

Now the studio has reportedly implemented new guidelines aimed at better compensating talent and production during the pandemic, according to Bloomberg, which cited sources familiar with the situation. Warner will now pay producers and talent from fees generated by Max to offset lower box office revenue and performance-based bonuses.

Hollywood has often compensated producers and talent with upfront compensation and the potential for a lot more on the backend depending on a movie’s box office success. Actor Robert Downey Jr. reportedly earned $75 million from Disney/Marvel Studios’ Avengers: Endgame under such an arrangement.

But with the pandemic severely curtailing the U.S. box office, Warner’s decision to release movies direct to consumers all but ended that traditional compensation channels, angering filmmakers such as Christopher Nolan and Denis Villeneuve, whose movies Tenet and the upcoming sci-fi remake Dune are released through the studio.

“AT&T has hijacked one of the most respectable and important studios in film history,” Villeneuve told Variety. “There is absolutely no love for cinema, nor for the audience here.”

Talent agencies complained the Max/theatrical strategy “unilaterally determined” a financial value for their clients’ work to “benefit the long-term prospects of HBO Max and the finances of AT&T,” according to Richard Lovett, president of the CAA agency.

Michael Pachter, media analyst at Wedbush Securities in Los Angeles, contends the premium VOD distribution strategy hasn’t proven to be as much of a threat to exhibitors as previously thought. Indeed, Disney has yet to release financial data regarding its decision to offer live-action Mulan directly to Disney+ subscribers for an additional $29.99 fee.

“We think the exhibitors will aggressively negotiate for far fewer films to be released day-and-date on HBO Max, based on the timing of vaccine distribution instead of the full calendar year,” Pachter wrote in a Jan. 11 note.

WarnerMedia contends the situation remains fluid with Warner planning to return to the traditional theatrical window in 2022 following vaccine inoculation.

“Our orientation in these situations is always to be generous,” WarnerMedia CEO Jason Kilar said in a recent interview.

HBO Max Working on ‘Sex and the City’ Limited Series Revival

HBO Max Jan. 10 announced it has given a limited series order for “And Just Like That,” a revival of the groundbreaking (1998-2004) HBO series “Sex and the City,” which starred Sarah Jessica Parker, Cynthia Nixon, Kristin Davis and Kim Cattrall.

The new Max Original series is based on the book “Sex and the City” by Candice Bushnell as well as the original TV series, which was created by Darren Star and won seven Emmys and eight Golden Globes. The series spawned two feature-length movies in 2008 and 2010 that generated a combined $709 million at the worldwide box office.

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The new Max series will follow Carrie, Miranda and Charlotte as they navigate the journey from the complicated reality of life and friendship in their 30s to the even more complicated reality of life and friendship in their 50s. The 10-episode, half-hour series is scheduled to begin production in New York late spring.

“I grew up with these characters, and I can’t wait to see how their story has evolved in this new chapter, with the honesty, poignancy, humor and the beloved city that has always defined them,” Sarah Aubrey, head of original content, HBO Max, said in a statement.

Noticeably missing from the reboot: Cattrall, who famously played Samantha Jones on the original series, but has long stated little desire to reprise the role.

AT&T Eyes AVOD on HBO Max to Widen ‘Available’ Customer Base

In addition to streaming Warner Bros. Pictures first-run movies, HBO Max’s major initiative in 2021 revolves around rolling out an ad-supported component to the platform’s SVOD legacy.

Speaking Jan. 5 on the virtual Citi Global TMT Conference, retiring CFO John Stephens (at the end of March) said AVOD enables WarnerMedia to expand its “available customer” footprint in the same way broadband and data plans have helped grow the cellular business.

“That’s what AVOD is going to help us do: expand the opportunity to serve customers in a different way,” he said.

As ad-supported VOD platforms proliferate in response to SVOD market domination by Netflix, Disney+, Hulu and Amazon Prime Video, the distribution channel, which includes The Roku Channel, IMDb TV, Pluto TV, Shout! Factory TV and Tubi, has been dogged by a dearth of higher profile content.

NBCUniversal’s Peacock streaming service, which launched in July as the market’s first hybrid SVOD/AVOD business model, is looking to change that. The ad-supported VOD option is targeting original content, including live sports such as the U.K.’s Premier League soccer to entice viewers.

AT&T CEO John Stankey told an investor even last year that live sports is an appealing component to OTT video in Europe.

“You’ll probably see as we move through AVOD, maybe we do some additional live work that we have coming forward,” he said.

Stephens said he fully expects AVOD to impact Max SVOD sub growth both positively and negatively, while at the same time luring non-SVOD consumers to the pay model.

“I see [AVOD] as an opportunity to serve additional customers, and from a finance perspective, amortize the investment in content over a greater customer base,” he said.