Monday, April 12, 2021

How WarnerMedia Could Fix HBO Max

AT&T recently announced that they expect to reach a total number of global subscribers of 120 million to 150 million subscribers to HBO Max by the end of 2025. Personally, I think they are being far too overly optimistic. Despite the high hopes that AT&T and its subsidiary WarnerMedia Direct had for HBO Max, it really hasn't taken off the way they had hoped it would. While it has had some successes (such as The Flight Attendant), it still has a problem with attracting new subscribers.

In fact, HBO Max lags far behind many of its competitors. Streaming giant Netflix had a total of 73.4 million subscribers in the US as of the end of last year. HBO Max also lags behind Disney+, which announced in February that it had  surpassed 94.9 million subscribers in the United States. In comparison, HBO Max began 2021 with 41.5 million subscribers. That is only up 6.9 millions subscribers from the 34.5 million subscribers HBO Max had begun 2020 with. HBO Max is then lagging well behind Netflix and Disney+ in adding subscribers.

The addition of only 6.9 million subscribers seems especially significant given WarnerMedia Direct's efforts to add subscribers. Earlier this year they moved all video content from former streaming service DC Universe to HBO Max, including such popular series as Doom Patrol and Harley Quinn. Next month the Turner Classic Movies Hub of HBO Max will host exclusive content for the 2021 TCM Classic Film Festival. Even Warner Bros. movies, which would usually be released to theatres first and then later to streaming services, have premiered simultaneously in cinemas and on HBO Max. Despite this, the streaming service still hasn't seen significant gains in subscribers the way some of its competitors have.

Of course, the question is why HBO Max is lagging behind some of its competitors in subscribers. I think the primary reason may be its price. At $14.99 a month, HBO Max costs as much as the basic prices for Netflix and Hulu combined. $14.99 is then rather costly given one would get much more content with both a basic Netflix subscription and a basic Hulu subscription for the same price. Indeed, HBO Max has only a little more content than Peacock, which has a free tier as well as a $4.99 tier and a $9/99 tier.

Now I am not sure why HBO Max costs so much. My suspicion is that it is the presence of content from HBO. I have watched streaming media for over ten years and one thing I have learned is that any content from HBO, whether it is a made-for-TV movie or an episode of one of their shows, costs much more than similar material from other outlets. I remember I considered watching Game of Thrones on Amazon Prime until I saw how much a single episode cost. While I cannot say why HBO movies and TV shows are so expensive to stream, I am guessing it may be because HBO is  a premium channel. Perhaps they are concerned that if they made their content inexpensive to stream, then people wouldn't subscribe to HBO.

If that is the case, I can see two ways that WarnerMedia can improve their chances in the streaming arena. The first is to create at least two tiers with regards to HBO Max, one less expensive than the other. On the less expensive tier one would get access to the DC Hub, the TCM Hub, the Studio Ghibli hub, the Looney Tunes hub, and so on. On the more expensive tier one would not only get access to those hubs, but the HBO Max Originals and HBO content as well. I think this would encourage more people to subscribe, even if it was only to the lower tier. I personally have no interest in HBO content and very little interest in HBO Max original shows, but I am very interested in content from DC, TCM, Warner Bros., and so on (speaking of Warner Bros., when are they going to add classic Warner Bros. shows like Maverick and 77 Sunset Strip to HBO Max?).

The second way that WarnerMedia could improve their chances in the streaming arena is to simply break HBO Max up into two different streaming services. One could simply be an online version of the Warner Archive (not unlike the Warner Archive streaming service of a few years ago), which would feature content from DC, TCM, Warner Bros., and so on. The other streaming service would feature HBO content and original content. I don't think this solution would be as good as simply introducing tiers to HBO Max, but I think it might well be more viable than HBO Max the way it is now.

As it is, right now I worry that WarnerMedia may be putting their eggs all in one basket with regards to HBO Max. While it certainly has content that would draw in subscribers, its cost per month probably keeps many of them away. I already subscribe to a few streaming services, and I am unwilling to give up any of them to subscribe to HBO Max, particularly as I would probably have to give up more than one of them. If WarnerMedia introduced tiers to HBO Max or if they simply broke it ups into two different streaming services, they would be much more likely to get my money. I think that might be true of a lot of potential subscribers.

1 comment:

Evil Woman Blues said...

Just a hunch but maybe it has a lot to do with biology. HBO first came out when bell bottoms and disco were popular. Its core audience is old and therefore, dying. The Sopranos, the trailblazer of internet TV, gets more publicity from the obit page than anywhere else. It may very well go the way of GM and Kodak.