HBO Max is finally throwing the “on” switch, culminating a multi-year, $4 billion journey to join the direct-to-consumer streaming wave.
The service’s launch just after midnight ET on Wednesday is the last of five major streaming debuts, an unprecedented multibillion-dollar infusion that has upended traditional organizations and strategies. Apple TV+ and Disney+ arrived last November and NBCUniversal’s Peacock and well-funded mobile startup Quibi hit the market last month. Peacock will reach beyond its initial Comcast footprint via a national expansion in July.
All of these entrants, as well as incumbents led by Netflix, are operating in a marketplace defined by COVID-19, which has boosted overall streaming viewing but also complicated the supply chain. The title initially intended as the flagship attraction for HBO Max, a reunion special with the original cast of Friends, was delayed by the pandemic. Anna Kendrick’s romantic comedy Love Life has stepped in as the service’s marquee show at launch.
AT&T has anticipated this day for nearly four years, enduring twists and turns en route to closing its $81 billion acquisition of Time Warner and making a flurry of strategic moves to position itself to stream directly to consumers. Tony Goncalves, CEO of Otter Media, was appointed GM of HBO Max last fall after an eight-year run at DirecTV, followed by three more years as an AT&T exec. His AT&T years focused on taking DirecTV’s satellite service to the Internet as well as running Otter, a joint digital venture with the Chernin Group that became a fully owned AT&T property in 2018.
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In an interview with Deadline, Goncalves addressed the company’s decision to press on during COVID-19, the task of migrating existing customers to Max, and the criticism that the company is risking dilution of the nearly 50-year-old HBO brand. With input from Goncalves, here are some questions and answers about what to expect from the newest streaming contender.
HOW IS HBO MAX DIFFERENT FROM HBO, HBO GO OR HBO NOW?
HBO Max is essentially an extension of HBO, which first went on the air in 1972 after being conceived as a way to get cable customers to pay extra for select programming. In 2011, HBO Go launched, enabling subscribers to HBO to stream the network’s offerings, and in 2015, HBO Now launched as a stand-alone streaming version of the traditional offering.
Max is launching with about 10,000 hours of programming, an array that includes the current HBO portfolio of new and library shows. In addition to current HBO fare like Westworld and Succession, customers will get Warner Bros films, from classics like The Wizard of Oz and Casablanca to more recent titles like the Matrix trilogy, Hiyao Miyazaki’s animated work and four-plus decades of DC Comics titles. They’ll also get Warner Bros TV staples like The Big Bang Theory and Friends. Also in the mix are dozens of Max Originals, a batch of limited series across the drama, comedy, documentary and animation spectrum.
As to the HBO Max name and the risk of tarnishing the network that ushered in the era of prestige TV, Goncalves said there was never an alternative the company explored that made more sense. “Why start over?” he said, describing the management team’s conclusion. HBO, the consensus held, has long been embedded within pay-TV bundle offering other programming and “has not only flourished but it’s thrived. … HBO’s brand is the closest to the consumer that it’s ever been.”
HOW DOES IT COMPARE WITH OTHER NEW SERVICES?
HBO Max has a deeper library than the Apple or Disney services. The highest tiers of Peacock, once they roll out this summer, are comparable. But the service also has the most ambitious selection of original shows and movies. Apple and Disney have both made aggressive moves lately to mobilize features for streaming during COVID-19. Down the line, HBO Max will roll out Seth Rogen comedy An American Pickle and director Zack Snyder’s new cut of Justice League.
WHERE CAN I GET HBO MAX?
If you are an AT&T pay-TV customer currently paying for HBO, you will get free access to HBO Max. Some AT&T wireless customers will also get free access, at least initially. Distribution deals with Charter, Cox, Verizon, Altice, Apple TV, Hulu, YouTube TV, Android, Sony PlayStation, Microsoft Xbox and others have also been set in recent weeks. That means customers of those companies can either upgrade their existing HBO subscriptions at no cost or sign up for $15 a month. Three notable gaps at launch are Amazon Fire devices, Comcast and Roku, though the last is having conversations with WarnerMedia.
Some skeptics of HBO Max say the number of offerings is confusing, as is the idea of a more robust offering sitting alongside the traditional linear HBO in the company’s product lineup. Goncalves says it is a “blessing and a curse” to be leveraging an existing base of subscribers with a new offering. “We’re not going to walk away from our customers and the way they prefer to engage with our product,” he said, in defense of maintaining multiple flavors of HBO. He described the consumer proposition of opting for Max “a bit of a no-brainer,” but said the company plans to “educate consumers as best we can and to the extent our partnerships allow.”
HOW MUCH DOES IT COST?
For existing HBO subscribers via qualifying partner platforms, most of whom pay $15 a month, there will be no additional cost. For new subscribers, the price is $15 a month, though a promotion makes it $12 a month for the first year.
While there is no incremental cost to switch for the 30 million or so existing HBO subscribers in the U.S., new subscribers will be paying the most of any competing streaming service. Apple and Disney are at the low end, at $5 and $7 a month, with Peacock free for Comcast subscribers and $5 a month for others who don’t opt for the ad-free version. Netflix’s most popular plan costs $13 a month.
WILL IT HAVE ADS?
Not this year, but in 2021 an ad-supported tier of HBO Max is expected to launch. Goncalves did not offer any updated outlook on its shape or timing, saying for the next few months the company’s focus will be on refining the ad-free version. He acknowledged there is no mass-audience precedent for starting out ad-free and then adding in a commercial layer, the opposite path from the one taken by CBS All Access and Hulu. “We’re in a unique position,” Goncalves said. “From a strictly subscription service, it will evolve.”
HOW MANY SUBSCRIBERS DOES THE COMPANY EXPECT TO GET?
At WarnerMedia’s investor day last October, the company projected 75 million-90 million global subscribers by 2025, with 50 million of those in the U.S. Compared with Disney, whose Disney+ offering drew 10 million signups in its first 24 hours and has widened out globally sooner than HBO Max to reach 54.5 million subscribers, the early going for WarnerMedia is expected to elicit fewer fireworks.
“Success is defined differently for us than it is for others,” Goncalves said. “We’re starting from a different place.”
While customers in the recent past had shown an appetite for paying for up to three subscription streaming outlets, Goncalves said WarnerMedia research has shown customers soon will be comfortable with between four and six, at $30 to $40 a month. “We’re investing to be one of those services, but it’s not winner-take all,” he said.
DID THE COMPANY CONSIDER WAITING TO LAUNCH AFTER THE PANDEMIC?
While WarnerMedia “did not take the decision lightly” to try to persevere, Goncalves said delaying was never seriously considered. Getting through a period of ending beta testing in early April, locking the code and then finalizing the app for launch, making sure it works across dozens of platforms, required a massive feat by the team of 600-plus engineers.
One reason for staying the course is that AT&T had already delayed the launch at least once. Initially it had signaled its intent to enter the streaming derby by fall 2019, but wound up needing more time given the lengthy challenge of the Time Warner deal by the federal government, along with other factors. Once the company “figured out what kind of house we wanted to build,” requiring a few months to course-correct is reasonable, Goncalves said. “This is such a seismic shift in the business model, it takes time for a company of our scale. We feel the extra time was well worth it.”
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May 27, 2020 at 11:01AM
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HBO Max Launch: Here’s What You Need To Know - Deadline
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