AT&T’s WarnerMedia became the latest giant to throw its hat into streaming ring on Wednesday following the launch of its billion dollar online video service, HBO Max.
HBO Max becomes the phone company’s first big entertainment venture since it spent $85 billion acquiring Time Warner two years ago.
The company plans to spend more than $4.5 billion on the project across the next few years, with aspirations to have 50 million subscribers by 2025 and generate billions in annual profits to rival the likes of Netflix, Disney Plus, Amazon Prime Video, Hulu and Apple TV, in the increasingly crowded field of online entertainment.
Unlike other HBO apps, Max includes TV shows that initially aired on other networks and aren’t available on competing services, such as the smash-hit sitcom Friends.
A reunion of the show’s cast had originally been planned to be released for the platform’s rollout, but filming was suspended because of the ongoing coronavirus pandemic.
And according to experts, the timing of HBO Max’s launch will either prove to be its making or its breaking.
While the 10,000 hours of movies and TV shows the platform is offering may appeal in theory to the millions stuck at home amid the pandemic, the reality of its hefty subscription fee ($15 per-month) could be enough to turn prospective customers away, at a time where household budgets are being constrained by the economic fallout caused by COVID-19.
AT&T’s WarnerMedia became the latest giant to throw its hat into streaming ring on Wednesday, following the launch of its multi-billion dollar online video service, HBO Max (Pictured from left, Chief Content Officer, HBO MAX and President, TNT,TBS, & truTV Kevin Reilly and Head of Original Content , HBO MAX Sarah Aubrey appear at the HBO Max Executive Sessions panel during the HBO TCA 2020
‘People are going to look at the price point first,’ said Steve Nason, research director at Parks Associates.
While HBO Max costs $15 – the same as the HBO Now streaming service it’s supposed to replace – Netflix’s no-frills plan costs $9 per-month, while Hulu charges just $6. Other new streaming services, such as Disney Plus and Quibi, launched with cheaper prices and bigger discounts.
Even before the COVID-19 outbreak, industry analysts called HBO’s pricing ‘unreasonable.’ A study conducted by the New York Times found that one in five people who subscribed to HBO Now said they planned to cancel their subscription in the coming months because of how expensive it is.
Entertainment companies like AT&T´s WarnerMedia are broadly shifting to streaming video, following in Netflix’s wake, as more people stray from their traditional cable bundles.
Disney launched Disney Plus and the sports-focused ESPN Plus and took control of Hulu from an industry joint venture; Comcast’s NBCUniversal is launching Peacock widely this summer; and ViacomCBS is reinvigorating CBS All Access, filling it with even more programming.
Even Fox Corp. has its Fox Nation app, with tech company Apple also having started a small service of its own. A short-video service targeted to cellphones, Quibi, also hopes to get a slice of the streaming pie, though the reception to its launch has fallen far below expectation.
Unlike other HBO apps, Max includes TV shows that initially aired on other networks and aren’t available on competing services, such as the smash-hit sitcom Friends.
The company plans to spend more than $4.5 billion on the project across the next few years, with aspirations to have 50 million subscribers by 2025
WarnerMedia hope to generate billions in annual profits to rival the likes of Netflix, Disney Plus, Amazon Prime Video, Hulu and Apple TV, in the increasingly crowded field of online entertainment
Unlike other HBO apps, Max includes TV shows that initially aired on other networks and aren’t available on competing services, such as the smash-hit sitcom Friends
A reunion of the show’s cast, which had originally been planned for the platform’s rollout, has been put on hold by the pandemic. Similarly, Director Zack Snyder’s alternate cut of the 2017 superhero movie Justice League, won’t land on HBO Max until next year.
But in the meantime, the service has been stacked with content, including classic HBO series like The Sopranos, The Wire and Sex and the City.
Half a dozen new releases – called Max Originals – are also now making their debut, which include Craftopia, a crafting competition for kids; Legendary, a reality competition for voguing ballroom crews; and flagship offering Love Life, a romantic drama-comedy starring Anna Kendrick.
The Warner Bros. film library stretches back decades to Hollywood’s golden age. There’s even a reboot of beloved cartoon, Looney Tunes, which has been animated in a retro style.
‘Maybe timing is actually good,’ said Wells Fargo analyst Jennifer Fritzsche. ‘There might be a Netflix exhaustion factor.’ Netflix has predicted extremely strong subscriber gains for this quarter.
But people will have to decide if it’s worth paying up for a new video service on top of the ‘foundational’ services many already have: Netflix, the heaps of video that come with an Amazon Prime membership, Hulu and, increasingly, Disney Plus, Nason said.
But in the meantime, the service has been stacked with content, including classic HBO series like The Sopranos, The Wire and Sex and the City
Half a dozen new releases – called Max Originals – are also now making their debut, which include Craftopia, a crafting competition for kids; Legendary, a reality competition for voguing ballroom crews; and flagship offering Love Life, a romantic drama-comedy starring Anna Kendrick (above)
HBO itself is not going away, but Max intends to eventually replace the company’s existing streaming services, HBO Go and HBO Now. The phone giant hopes that HBO’s 35 million subscribers will shift their loyalty to HBO Max, but there are contract issues that could potentially antagonize customers.
‘The confusion point is one we’ve obsessed over for a year,’ said Andy Forssell, the general manager of WarnerMedia´s direct-to-consumer arm.
It’s easy to prompt HBO Now users to switch to Max if they signed up directly through HBO, and many big cable companies have agreed to promote HBO Max to their existing HBO customers.
However, no deal has yet been struck with Roku or Amazon, so any customers who signed up for HBO through either company might not have access to Max on a TV until that issue is resolved.
HBO itself is not going away, but Max intends to eventually replace the company’s existing streaming services, HBO Go and HBO Now. The phone giant hopes that HBO’s 35 million subscribers will shift their loyalty to HBO Max, but there are contract issues that could potentially antagonize customers
Another potential hang-up for WarnerMedia is the effect the coronavirus pandemic has had on halting Hollywood productions, and that’s expected to slow down the rollout of HBO Max´s original productions – such as the highly anticipated Friends reunion special.
That impact, however, will be felt more in 2021 than in this year, Forssell said. Originals are important because they help bring on subscribers and get them to keep paying, month after month.
For AT&T, getting HBO Max right is critical. Its DirecTV satellite service is bleeding customers, and the traditional TV model is under threat from industry-wide cord-cutting and, more recently, a coronavirus-related advertiser retreat.
Max also has the potential to entice wireless customers as AT&T offers it as part of a bundle. But the competition for customers’ attention and dollars is fierce.
‘They’re going shoulder to shoulder with media titans,’ Fritzsche said. ‘They haven´t played in that sandbox before.’
Source: dailymail US
