CEO Stankey: ‘Still Have Work to Do’ Building HBO Max Subscriptions

One month after launching on May 27, WarnerMedia’s subscription streaming video platform, HBO Max, had 4.1 million subscribers who’d activated their Max app. By comparison, Disney+ had 10 million app activations after one day.

Disney’s foray into SVOD was greatly assisted by a strong brand and promotional campaign with Verizon, the latter affording the telecom’s 115 million wireless subs free 12-month access to Disney+. HBO Max has no similar jumpstarter.

While AT&T CEO John Stankey makes the usual upbeat comments (“It’s the early days”) and claims the average number of weekly hours spent viewing Max is 70% more than on HBO Now, which launched in 2015, the underlying message remains: Convincing consumers and existing HBO subs to join Max is a work in progress.

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“We still have work to do to educate and motivate the exclusively linear [HBO] subscriber base [about Max], and we’ll continue to work with our wholesale partners to drive these activation rates,” Stankey said.

AT&T ended the fiscal second quarter with 36.3 million combined HBO and HBO Max subscribers compared with 34.6 million at the end of 2019.

The CEO said there’s been “positive pull-through” combining Max with AT&T wireless and fiber plans, and expects that ongoing 5G handset upgrades will be one of the key drivers growing wireless service revenue in the second half of the year.

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Yet, while AT&T has worked overtime making Max available to consumers through nearly every content distributor in the U.S., it has failed to get assistance from Roku and Amazon Fire TV — which represent about 70% of all standalone streaming media devices in the U.S., according to Parks Associates.

Indeed, rival SVOD services Netflix, Amazon Prime Video and Hulu all have distribution on Roku and Fire TV. Negotiations between WarnerMedia, Roku and Amazon have reportedly stalled over control of user data, among other issues.

“We’ve tried repeatedly to make Max available to all customers using Amazon Fire devices, including those customers that have purchased HBO Now via Amazon [Channels],” Stankey said. “Unfortunately, Amazon has taken an approach of treating Max and its customers differently on how they’ve chosen to treat other [SVOD] services.”

AT&T CFO: HBO Now Viewership Up 40% During Pandemic

AT&T’s singular streaming video focus is on the recent subscription video-on-demand launch of HBO Max. Yet, the telecom’s existing SVOD service, HBO Now, which launched in 2015, saw a 40% uptick in viewership during early days of the coronavirus pandemic, CFO John Stephens said June 17 during an investor event.

Speaking remotely at the Credit Suisse Virtual Conference, Stephens said consumer response to Max, which launched less than three weeks ago, remains promising, adding he expects AT&T to announce subscriber data on the earnings call in July.

AT&T CFO John Stephens

AT&T’s WarnerMedia segment, which operates HBO, recently announced that HBO Now would be called HBO going forward. This, despite the fact Now subs who access the platform through HBONow.com, Google or Apple TV automatically have access to Max at no extra charge. Now subs who access via Roku, Amazon Prime Channels or third-party ISP, however, must download the Max app and re-register.

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Separately, HBO Go, which offers HBO pay-TV subs on-demand access to programming, is being phased out with subs given the option to migrate to Max.

“Quite frankly, on the HBO Max side, we’ve been pleased with where we’re at,” Stephens said. “But it’s been three weeks or not quite three weeks. And so from that perspective, we’re — it’s early. We’re — well, I’m very about positive it, but it’s early.”

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The CFO’s measured support for Max underscores corporate’s sometimes confusing messaging surrounding HBO’s streaming assets. Stephens hinted that was one of the reasons AT&T hired former Hulu CEO Jason Kilar to run WarnerMedia, which includes Warner Bros., Hulu and Turner.

“[Kilar’s] very experienced in over-the-top products and launching, and … he’s very helpful to what was a very strong team already,” Stephens said. “We feel very good about that. And we’re optimistic. We just remain optimistic. It’s a multiyear process. But so far, so good.”

Stephens says AT&T is sticking to previous guidance projecting 50 million Max subs by 2025.

“We’re going to give it some more time and make sure we do full measure,” he said. “But yes, we saw increased [Max] engagement. The engagement really improved in HBO Now.”

HBO Downsizes Apps, Increases Confusion

As expected, WarnerMedia is consolidating its HBO Go, HBO Now and HBO Max apps in an attempt to declutter the brand’s over-the-top video offerings to consumers. In the process, however, the corporate umbrella to Warner Bros., HBO and Turner has seemingly complicated matters.

With the high-profile HBO Max spearheading WarnerMedia’s OTT aspirations, the former Time Warner conglomerate June 12 announced it is phasing out HBO Go (on July 31), the OTT on-demand platform for HBO pay-TV subscribers. WarnerMedia will meld Go users into Max at no extra charge.

HBO Now, the 5-year-old standalone SVOD service ($14.99), will simply be called HBO. This, despite the fact Now subs who access the platform through HBONow.com, Google or Apple TV will be automatically switched to Max at no extra charge.

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And HBO Now subs who access via Roku, Amazon Prime Channels or third-party ISP must download the Max app and re-register. Go users who access HBO via Prime Channels are out of luck unless they download the Max app separately.

Max, which has generated upwards of 1.8 million app downloads, is also available via AT&T TV, Hulu, YouTube TV, Comcast, Charter/Spectrum, Altice (Optimum and SuddenLink), Verizon, Cox Communications and NCTC (WOW, Atlantic Broadband, RCN, Grande Communications & Wave and MCTV). Due to negotiation issues, Max is not available via Roku or Amazon Fire TV — while HBO Go is. But Max is available via the Android and iOS app, Samsung TV, Android TV, PlayStation 4, Xbox One and Google Chromecast.

HBO Max Two-Week Download Count: 1.8 Million Apps

WarnerMedia’s high-profile subscription streaming video platform HBO Max is slowly gaining traction commensurate with its hype. The $14.99 service, which launched May 27, generated from 1.6 million to 1.8 million app downloads through June 9, according to separate data from SensorTower and Apptopia, respectively. That compared with 900,000 Now downloads through April. Both apps are free to download.

Max generated 334,000 app downloads in its first 24 hours, leading to some speculation the platform wasn’t resonating. Indeed, as the last major SVOD platform to launch, Max joined a saturated market driven by Netflix, Disney+, Hulu and Amazon Prime Video.

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Max has been installed by approximately 121,000 first-time U.S. users per day. That is 572% more than Now’s daily average of about 18,000 installs in the 14 days leading up to Max’s launch. SensorTower said Max’s app downloads represented a 591% increase from the 246,000 first-time installs the Now app saw in the 14 days leading up to Max’s launch.

While Max may be marketed as HBO on steroids, WarnerMedia also offers identically-priced HBO Now and HBO Go — the latter a VOD platform for HBO pay-TV customers. Both Now subs and Go users get free access to Max. Still the combination can be confusing to first-time consumers.

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“We had to figure out this weird way that HBO was now HBO Max, and then we had to download it and find our way in that,” Ross Clugston, executive creative director at marketing agency Superunion, told AdWeek. “I think that’s the story here: the story of HBO fragmenting this brand.”

Indeed, WarnerMedia is spending heavily to market Max as much more than HBO. The platform is targeting families with children, in addition to fans of nostalgic television shows such as “Friends,” “South Park,” “The Big Bang Theory” and “Game of Thrones,” among others.

A “Friends” reunion special remains on tap once filming can resume in the COVID-19 era.  Max just renewed a second season of original series “Love Life,” starring Anna Kendrick. It also pulled Oscar-winning classic Gone With the Wind from catalog movies due the racial depiction of Southern plantations during and after the Civil War.

“Consumers don’t do well with confusion,” said Dan Rayburn, analyst at Frost & Sullivan and EVP of StreamingMedia.com. “Consumers pick services that are easy to use and they can understand.”

HBO Max Launches — With More Than 10,000 Hours of Content

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.

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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.

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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.

HBO Go Available as Standalone Service in Indonesia

WarnerMedia Entertainment Feb. 12 announced that its HBO Go service is now available in Indonesia as a standalone streaming service. The app is accessible on HBOGoAsia.com and can be downloaded from the App Store or Google Play Store for IDR60,000 ($4) a with a seven-day free trial.

The HBO Go app, which launched in Indonesia in 2019 continues to be an on-demand platform for HBO via pay-TV operators Telkomsel’s Maxstream, First Media and IndiHome. It was a pre-cursor to HBO Now (and pending HBO Max) in the United States.

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“Thanks to our local distribution partners, the app has already got off to a flying start in Indonesia,” said Clement Schwebig, managing director of WarnerMedia Entertainment Networks, Southeast Asia, Pacific and China, which operates HBO in Asia. “Through HBO Go, viewers can watch the latest Hollywood blockbuster movies and series — as well as Asian content — anytime, anywhere.”

A number of HBO Asia Originals have been filmed in Indonesia, with local cast and crews. For example, award-winning Joko Anwar directed both “Halfworlds” and “Folklore”; Reza Rahadian and Arifin Putra star in “Halfworlds”; Adinia Wirasti appears in both “Halfworlds” and “Grisse”; and Alexandra Gottardo has roles in “Grisse” and “Food Lore.”

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HBO Go allows subscribers unlimited access to stream thousands of hours of non-stop and uncut entertainment from the latest first-run Hollywood movies and exclusive original content from HBO, HBO Asia and Cinemax, to Asian movies, series and all-time favorite kids’ programs over multiple connected devices.

Within the app, the live TV function can stream six of WarnerMedia Entertainment Networks’ channels: HBO, HBO Signature, HBO Hits, HBO Family, Cinemax and Red By HBO. Each HBO Go account can be viewed on two concurrent streams across five registered devices and the service has Airplay and Chromecast functionality.

In Asia, HBO Go is also available in Hong Kong, the Philippines, Malaysia, Singapore and Vietnam, and will be launching in more territories with additional partners soon.

 

Analyst: Amazon Fire TV Users Prefer Streaming Netflix

Amazon Fire TV and Roku continue to spearhead the streaming media device market in the United States and select foreign markets. New data from Ampere Analysis contends Roku has a key leadership position in both the U.S. and in Canada — although Amazon is “hot on Roku’s heels” in both countries.

While Fire TV is the leading device in many of Amazon’s retail markets and has a market share of over 40% in both Germany and Japan, it still trails Roku in the U.S. Indeed, among domestic Fire TV users, the slight majority prefer to stream Netflix than Prime Video.

Ownership of Google Chromecast is high in the Nordics and Netherlands, which lack any serious Amazon retail presence. Google has over 50% market share in Netherlands and Denmark.

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Device owners show subtle differences in the streaming services they rely on, reflecting device owner strategies, interfaces and the products they promote.

Although Netflix is still the key service for Fire TV owners in the U.S., Amazon device homes are more likely to subscribe to Prime Video and HBO Now compared to Roku device owners.

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By contrast, Roku device owners show a slight skew towards Hulu and Netflix compared to Fire TV households.

Finally, Sweden tops all countries for household streaming media device penetration at 55%. That compares to Denmark, the U.K. and U.S. at 51% household penetration.

“More than any other sector, the streaming adapter market is a competitive battleground for companies with wildly different strategic imperatives — ranging from Amazon and the support which Fire TV provides for its retail operations, Apple and its high-end device ecosystem, Google and its advertising businesses, and Roku and its mix of monetization mechanisms,” Minal Modha, consumer research lead at Ampere Analysis, said in a statement.

 

AT&T Outlines How It Will Jumpstart HBO Max Subscriptions

In the rush to validate expensive forays into proprietary over-the-top video distribution, media/tech giants such as Disney and Apple have partnered with third-party vendors and/or leaned on subsidiaries to boost subscriber retention.

HBO is no different.

During AT&T’s Jan. 29 fiscal call, WarnerMedia CEO John Stankey, who is also president and COO of the telecom parent, disclosed details how company plans to support the May debut of HBO Max — the SVOD platform company executives contend is better than the competition, including Netflix.

Indeed, AT&T said it bypassed $1.2 billion in fourth-quarter ($2.8 billion in annual) revenue forgoing third-party licensing of Warner Bros. Television properties “Friends” and “The Big Bang Theory,” among other shows, in advance of the Max launch.

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AT&T is going to give Max free to existing HBO subs through DirecTV and AT&T U-verse — or about 10 million consumers. The number is significant, since that’s the tally Disney said it generated in the first 24 hours after launching Disney+, assisted in part by a promotion with Verizon affording the telecom’s data subs with a free year of service.

Apple, which reportedly already has more than 33 million Apple TV+ subs, is giving a free year of service with any new purchase of an iPhone, iPad, Mac or Apple Watch.

Meanwhile, the eight million HBO Now subs (currently paying the identical $14.99 Max fee) will be automatically eligible for a Max upgrade without cost provided they do not access the OTT service through third-party platforms such as Roku, Apple TV, Amazon Channels, Google Chromecast or Hulu, among other devices.

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AT&T will also incentivize its “highest ARPU” wireless subscribers with promotional Max offerings, in addition to foot traffic at any of the telecom’s 5,500 branded retail locations in the U.S.

“It’s a great opportunity to improve our overall churn [subscriber retention], which we’ve seen happen from giving HBO to current unlimited [wireless] customers,” Stankey said.

“With Max, we’ll offer consumers more than twice the amount of programming for the same price as HBO today,” he added.

Stankey said going forward HBO’s 34 million domestic linear subscribers should expect to see more generalized entertainment content, including unscripted reality shows, news and sports.

“It’s an important dance and choreography [with linear TV distributors] that we have to do to get right,” he said. “And we feel we’re positioned very well to make that happen.”

 

Ex-HBO Boss Inks 5-Year Apple TV+ Production Deal

In a move to jumpstart its branded subscription streaming video service, Apple has reportedly signed a five-year production deal with Richard Plepler, former CEO of HBO.

Under the deal ironed out by Zack Van Amburg and Jamie Erlicht, Apple’s joint heads of video, Plepler’s company, Eden Productions, will create original series, movies and documentaries for Apple TV+. The $4.99 service launched Nov. 2, 2019, with fewer than a dozen original programs.

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“I’m excited to work with Zack, Jamie and the standout team at Apple who have been deeply supportive of my vision for Eden from day one,” Plepler said in a statement. “The shows that Zack and Jamie produced, ‘The Crown’ and ‘Breaking Bad,’ are among those I most admired. Apple is one of the most creative companies in the world, and the perfect home for my new production company and next chapter.”

Plepler, who helped launched subscription streaming video platform HBO Now in 2015, ran HBO for 28 years — a career that saw the premium channel produce myriad high-profile shows, including “The Wire,” “The Sopranos,” “True Detective,” “Game of Thrones,” “Silicon Valley,” “Oz,” “Sharp Objects,” “Westworld,” “Boardwalk Empire,” “Big Love,” “The Larry Sanders Show,” “Sex and the City,” “Veep,” “Last Week Tonight With John Oliver,” “Chernobyl,” “Band of Brothers,” “Barry” and “Curb Your Enthusiasm,” among others.

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Plepler stepped down from his position shortly after AT&T closed its acquisition of Time Warner, creating WarnerMedia, headed by John Stankey.

Average U.S. Home Streaming Bundle Sweet Spot: $20-$21

With the field of subscription streaming video services growing, new data shows the average U.S. household would spend $20 to $21 monthly for combined platforms — slightly more than 20% of the average pay-TV bundle ($96.18).

Soda.com, in a survey of 1,000 consumers who stream video in the home conducted Nov. 7-9, 2019, found the majority (32%) of respondents would pay $20 or more monthly for combined streaming services, while 30% would prefer not to bundle services and 14% would not pay more than $10 for a bundle.

Notably, 44% of respondents said they use two or more streaming services per week.

With SVOD services ranging from $4.99 for Apple TV+ to $15 for HBO Max, which launches in May, consumers are faced with the challenge of mixing and matching services or prioritizing services based on the user’s favorite content.

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Netflix is projecting 61.2 million domestic subscribers at the end 2019, with actual figures to be released later this month. That’s more than 80% of the combined tally predicted for Hulu (28.5 million), Apple TV+ (10 million), Disney+ (15 million), CBS All Access (8 million), HBO Now (8 million) and ESPN+ (3.5 million), according to CNBC.

In August 2019, there were about 86.5 million traditional pay-TV households — a number that is projected to drop to 73 million by 2023, according to Statista. Most pay-TV subs continue their subscriptions based on habit, premium channels and sports.

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The survey contends Netflix remains the best overall streaming service followed by YouTube TV. Sports fans favored sports-themed fubo TV or ESPN+, whiles families sought Amazon Prime Video (Prime membership and free shipping) and Disney+.

Movie fans chose HBO Now (soon HBO Max) and Hulu, while budget-minded respondents opted for Sling TV and Hoopla.