WarnerMedia lifts lid on HBO Max, confirms plans for AVOD version

AT&T has officially lifted the lid on HBO Max, announcing that the streamer will launch in May 2020 at US$14.99 per month and confirming plans for an AVOD option. 

The streamer will launch with 10,000 hours of content and, as previously reported, existing AT&T HBO customers and HBO Now direct-billed subscribers will receive the new service at no additional cost. In addition, AT&T customers who subscribe to the operator’s premium video, mobile and broadband packages will be offered bundles at launch with HBO Max at no additional cost.

The company also said that it plans to expand the service to include an AVOD option within the first year of HBO Max’s launch, with further plans to provide live, interactive and special event programming.

Robert Greenblatt

Regionally, the streamer will initially launch in the US with plans to initially prioritise Latin America and Europe, where it has ownership interest in or operates premium HBO networks and OTT services.

It seems unlikely to launch in any countries where Sky operates, however, following the signing of a five-year output deal with the European pay TV operator. Sky is also set to co-produce on series being created for HBO Max.

Announced at the company’s WarnerMedia day at the Warner Bros. lot in Burbank, California, the eagerly-awaited service will aim to reach 50 million US subscribers and between 25-40 million international subscribers by the end of 2025.

Due to the offered bundles, the company will already be part way towards its domestic target with 10 million subscribers already entitled to the service.

Robert Greenblatt, chairman of WarnerMedia entertainment and direct-to-consumer, said: “With this entire company coming together, we will have one of the most robust collections of premium streaming content that will appeal to all demographics in the household, and be able to achieve incredible scale and reach right out of the gate.”

Tony Concalves, CEO of Otter Media and leader of HBO Max, said: “We’ve positioned HBO Max in a way that makes sense for our company, our distribution partners and our customers. We are creating a company-wide ‘membership-model’ that taps into AT&T’s 170 million direct-to-consumer relationships, 5,500 retail stores and 3.2 billion annual customer touchpoints to achieve scale and reach at launch.”

Content is king

The new platform will exhibit WarnerMedia’s extremely large content library, pulling in shows from the likes of Warner Bros., New Line, DC, CNN, TNT, TBS, truTV, Turner Classic Movies, Cartoon Network, Adult Swim, Crunchyroll, Rooster Teeth and Looney Tunes.

The company also announced a raft of originals for HBO Max. These include the latest project of comedian Mindy Kaling College Girls, DC superhero anthology series Strange Adventures, and the Ridley Scott-directed Raised by Wolves – a co-production with Sky Studios.

HBO also used the conference to announce House of the Dragon, a 10-episode prequel to Game of Thrones, based on George R.R. Martin’s Fire & Blood and set 300 years before the events of the celebrated series. The show, to be broadcast on HBO’s linear channel, will also be made available on HBO Max.

In addition to TV content, HBO Max will launch with 1,800 film titles at launch. These range from iconic classics like The Matrix and The Lord Of The Rings to every DC film from the last decade including Aquaman and Joker.

Different by design

While the breadth of content is certainly a large focus for HBO Max, the platform is looking to differentiate itself from a user experience perspective.

One standout aspect of HBO Max is a new co-viewing feature, that allows subscribers to create shared homepages, which effectively merge multiple user profiles to display content that is tailored to the group’s preferences. This effectively solves an issue that many platforms have inadvertently created with hyper-personalised content feeds that are only catered towards the main viewer.

Another feature is called ‘Recommended By Humans’. The company says this will combine human-powered discover and analytics in novel ways to make it easier for viewers to find content that interests them. In this section, talent and influencers will make recommendations to users about the content via brief videos.

This is a feature that was teased by the company in August, with the launch of a website of the same name that served as a promotional tool for HBO Now – the service now being supplanted by HBO Max.

Other features that are more standard across other streamers include content hubs, personalised profiles, kids profiles and parental PIN usage, and downloads for offline viewing.

AT&T has said that it intends to spend US$1.5-2bn in 2020, with subsequent US$1bn investments over following years.

John Stankey, AT&T chief operating officer and CEO of WarnerMedia said: “To build, launch and grow the best streaming platform available requires a major investment and total support. We’re making that commitment and putting the strength of our entire company behind this.”

Analysts believe that the wide range of content, along with a below-expected monthly price will put the streamer in good stead.

Max Signorelli, research analyst, media and entertainment at IHS Markit, said: “HBO Now’s $14.99 pricing puts it right between Netflix’s top two tiers but more than double the price of standalone Disney+. An impressive library of content and features will certainly draw subscribers in at first and if its new original shows can draw consumer interest similar to Game of Thrones, it will likely be very successful.”

Announced on the eve of Apple TV+’s launch on 1 November and Disney+’s initial roll-out on 12 November, AT&T will hope it has done enough to convince potential customers that HBO Max will be worth subscribing to when it launches in May.

The presentation is an indication that AT&T is putting most of its video focus on streaming, and indicates that the promised evaluation of “multiple options and partnerships” for DirecTV will result in its offloading.

During the company’s most recent earnings call, AT&T CEO Randall Stephenson said that the company has “no sacred cows” and that “no portion of our business is ever exempt from a continuous assessment for fit and performance.”

It is believed that AT&T has been under significant pressure from investment firm Elliott Management, which bought a US$3.2bn stake in the company earlier in 2019.

AT&T is also currently facing a lawsuit that alleges it misled investors in order to hide the failure of DirecTV Now, the streaming service that was recently rebranded as AT&T TV. The suit goes as far as to claim that supervisors at the company encouraged sales reps to create fake DirecTV Now accounts and sign customers up for the service without their knowledge.

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