HBO Max reached 4.1M subscribers in first month, despite lack of distribution on Roku and Fire TV #AWS - The Entrepreneurial Way with A.I.

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Thursday, July 23, 2020

HBO Max reached 4.1M subscribers in first month, despite lack of distribution on Roku and Fire TV #AWS

#Amazon

HBO Max, the AT&T-owned streaming service that combines HBO with WarnerMedia content, has grown to 4.1 million subscribers, since its launch on May 27. Combined, HBO and HBO Max reached a total of 36.3 million U.S. subscribers by the end of the second quarter, according to statements made by AT&T CEO John Stankey on today’s earnings call. That figure has grown 5% from the 34.6 million subscribers the properties together had at the end of last year.

The 4.1 million figure breaks down as around 3 million retail subscribers and over 1 million were wholesale subscribers who came to the new service via one of AT&T wireless plans, where the service is bundled.

Though it’s still early days for HBO Max, these numbers indicate that the vast majority of traditional HBO customers have not yet tried HBO Max, even though it’s free for them to use. Currently, HBO customers can authenticate with HBO Max using their cable or satellite TV provider account information. HBO Now subscribers, meanwhile, are automatically upgraded to Max across Hulu, mobile apps, select ISPs, and the HBO Now site.

The HBO strategy, from a consumer perspective, has been confusing. HBO is known as premium channel with mostly adult content. This chanel had been distributed across mobile devices as HBO GO for traditional pay TV customers and HBO Now for over-the-top users. With the launch of HBO Max, the goal has been to transform HBO into a broader offering for the whole family, similar to Netflix. To do so, HBO, WarnerMedia and other licensed content was combined under one roof.

AT&T said today that HBO Max customers spent, on average, 70% more time viewing the service on a weekly basis, compared with HBO Now. It also stressed the popularity of its original content, noting that all 6 of its new originals found themselves ranked among the top 25 viewed series on the platform. By August, HBO Max will have 21 new original series on the platform.

But WarnerMedia still wants to distribute “standard” HBO to its larger, existing customer base, and has a number of deals in place to do so across a variety of streaming TV services, like Hulu, and platforms, like Apple TV, in addition to numerous pay TV providers. In addition, HBO is sold as an add-on premium subscription across some platforms, like Amazon and Roku.

That makes it difficult for consumers to understand which version of HBO they can get and where it will work.

That significant challenge is made worse by the fact that WarnerMedia has not yet been able to ink deals for HBO Max with the two top streaming media platform providers in the U.S.: Amazon and Roku, which control 70% of the market. That means consumers who have heard of the new service won’t be able to find the app on these devices.

Stankey addressed this problem today when speaking to investors.

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

The comments, which notably skip over any mention of Roku, come only days before Amazon CEO Jeff Bezos is set to testify before the House Judiciary Antitrust Subcommittee, along with CEOs from Apple, Google and Facebook, as part of the Committee’s ongoing investigation of potential anti-competitive practices in the digital marketplace.

One area of concern for the Committee is the power and control the tech companies have over their digital marketplaces, where they set terms, ban apps and services from distribution, and take commissions from businesses that compete with their own.

AT&T’s issue with Amazon, in this case, has to do with how it wants to distribute HBO Max across the media platforms. With its shift in strategy, AT&T aims to offer consumers a standalone app, similar to Netflix — as it does now on Apple TV and Android TV. But Amazon and Roku want to also sell subscriptions to HBO Max like they currently do for HBO through the Amazon Prime Video Channels platform and Roku’s Premium Subscription platform on The Roku Channel.

With Roku’s investment in The Roku Channel it’s been distancing itself from being the neutral platform it once was, as it’s now motivated to make deals that benefit its own goals around The Roku Channel’s subscription marketplace, the same as other non-neutral players, like Amazon. This is not a problem unique to HBO Max, either. NBCU’s new streaming service Peacock also failed to offer Roku and Fire TV support at launch, for similar reasons. Unfortunately, the consumer is the one who ultimately loses here as tech giants grapple over not only the dollars, but who will own the customer relationship in the long run.

Without distribution, AT&T’s WarnerMedia could be challenged to meet its goals for HBO Max.

The company, however, claims it’s still on track for 50-55 million HBO Max subscribers in the U.S by 2025. As part of this strategy, WarnerMedia also plans to launch HBO Max internationally and offer a lower-cost, as-supported version of the service sometime next year.

 





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via https://www.aiupnow.com

Sarah Perez, Khareem Sudlow