TBI Weekly: Six lessons from six months of HBO Max

Flight Attendant

Today marks six months to the day since WarnerMedia’s US SVOD service HBO Max launched straight into the middle of a crowded marketplace and a global pandemic.

Its entry on 27 May did not have the instant impact of Disney+’s IP-filled explosion, but the six months since have revealed plenty – from surging international acquisition activity, to job cuts, restructuring and the costs of Covid-induced production hiatuses. Here are six key lessons.

Power couples

HBO Max launched into a fervid US streaming market that included Netflix and Amazon, but also the more recently launched Disney+, Apple TV+, NBCUniversal’s Peacock and ViacomCBS’s All Access. Yet, the inability to come to an agreement prior to launch meant that it entered the fray without being available via two key services: Amazon Prime Video Channels and Roku. It hampered the streamer’s marketing efforts at launch but also hinted at the inherent tensions between US studios’ fresh-out-the-box streamers and third-party aggregators. A deal with Amazon was finally struck earlier in November but the service is still not available via the hugely popular Roku. WarnerMedia and its US studio rivals have entirely overhauled their business models to put their DTC streamers at the centre of their operations, yet six months on from HBO Max’s launch, it’s clear that their vertically aligned business models are still not quite as directly connected to their customers as they might like.

Friends

Faltering flagships

Easy to forget that it was only two years ago that Netflix was forking out $100m for a year-long US license of Friends, one of the crown jewels in the WarnerMedia library. WarnerMedia then took hold of the revived IP for $425m – effectively a deal with itself – and talk of an unscripted reunion show rumoured for months, before finally being confirmed at the start of this year. Then the pandemic hit and what was set to be a centrepiece of the streamer’s initial offer faltered – and it’s still not even been recorded, although star Matthew Perry recently tweeted that the show was now set for March. It neatly encapsulates the ravaging effect of the pandemic on HBO Max’s production plans – Kaley Cuoco’s Flight Attendant, which launched yesterday after lengthy delays, is another example – and perhaps partly explains the streamer’s rather lacklustre start.

Gomorrah

Hey, big spender…

The knock-on effect from these early production delays continues, with HBO Max being forced to embark on an international spending spree to supplement its offering. In just the past few days, the streamer has picked up exclusive US rights to BBC One’s 2019 UK hit The Trial of Christine Keeler, as well as to Fremantle’s Spanish-language psychological thriller La Jauria. Recent weeks have also seen HBO Max acquiring rights to British dark comedy Two Weeks To Live, alongside shows such as Adult Material, Possessions and a raft of live-action kids programming from Blue Ant International. It has not been a year to remember for producers, but distributors with the right shows – such as Gomorrah and Singletown – have undoubtedly found buyers with slots to fill, although it’s unclear whether this will last much longer.

Raised By Wolves

Commissioning continues

And that is because the streamer, along with its fellow US studios, are by no means bereft of their own originals – or averse to commissioning despite the immediate delays caused by Covid. HBO Max recently ordered an adaptation of DC comic series DMZ from Ava DuVernay and Roberto Patino with Warner Bros. Television, while there are also plans to reboot the Freeform/ABC Family drama Pretty Little Liars. The streamer is also set to debut superhero adventure feature Wonder Woman 1984 on Christmas Day, as well as an extended version of its DCEU stablemate Zack Snyder’s Justice League, recut as a four-part mini-series, next year.

One show it did manage to get lined up at launch was Anna Kendrick-fronted hit Love Life, which has also been quickly recommissioned for a second season, along with Ridley Scott’s sci-fi spectacle Raised By Wolves. Clearly, production can only go so fast – especially with budget-raising and time-consuming workarounds required by the pandemic – but it still suggests the streamer’s acquisition spree won’t last for too much longer. Also worth noting that it has not been a one-way trip for programming over the Atlantic this summer: Love Life, from Lionsgate, was picked up by the UK’s BBC for its VOD service iPlayer in September, bolstering WarnerMedia’s sales coffers.

Jason Kilar

‘Painful but critical’ job cuts

Back in May, there was plenty of talk about restructuring and lay-offs but there had been relatively little action. That’s all changed in the intervening six months since the streamer’s launch, with WarnerMedia CEO Jason Kilar recently labelling the overhaul as “painful” but “critical”. Parent company AT&T has reportedly looked to slash around 20% of costs to deal with Covid and focus on streaming, with most cuts to date felt in North America, where big name departures have ranged from Bob Greenblatt to HBO Max’s former creative chief Kevin Reilly. Since then, the process has started to hit sales and international operations, with revamps in Asia, departures in Europe including that of longstanding Warner Bros. UK, Ireland and Iberia boss Josh Berger, and a big impact on distribution. On the latter, sales chief Jeffrey Schlesinger has departed while Warner Bros. Television Group’s chief marketing officer has also gone, underlining the square focus on DTC.

Priya Dogra

Growth, going global & AVOD

Given all of the above, it’s just as well that HBO Max’s lukewarm start to life has begun to heat up. Last month, AT&T revealed the streamer had added 8.6 million subscribers through Q3, more than doubling the 4.1 million it attracted in the second quarter. Investment had reached $600m through that period, taking total spending to $1.3bn since launch in May, while an AVOD service is accelerating and offering more revenue raising potential. International plans are well underway too, with Johannes Larcher, former MD of Middle East streamer Shahid, hired in July to oversee the roll-out, while Priya Dogra has been promoted for EMEA and APAC as part of the new-look global structure. Latin America, however, will be the streamer’s first port of call, but it remains to be seen how HBO Max will expand elsewhere. The SVOD struck a co-production pact last year with Sky, as revealed by TBI, while its approach in Asia is also unclear: it has launched the HBO Go service in Taiwan in the last six months and just today unveiled a deal with a Thai provider, which will become the ‘home of HBO’ in that country. The past six months have taught us plenty, but HBO Max still has plenty of work to do.