The AT&T-owned company picked the week of Apple TV+’s underwhelming launch to unveil details regarding HBO Max, its premium-priced entry into the streaming universe, which — like Disney+ — seeks to draw on and leverage the studio’s assets, especially those with a loyal relationship with consumers.
Again like Disney, WarnerMedia, the parent of CNN, sounded determined to provide a service that would appeal to a wide cross-section of consumers, with a cradle-to-grave range of demographic targets and a decided emphasis on titles that already boast passionate fans — the kind willing to pay to access them.
As a point of differentiation, the company stressed its ability to draw upon its experience with HBO, which has long touted the strategy of attracting diverse constituencies to subscribe with what amounts to an elaborate programming quilt; and AT&T (T), which brings distribution experience to an enterprise that’s about the interface and platform as well as the content.
On the first front, HBO Max — due to launch in May 2020 — unveiled a mix of original titles and acquisitions, with an emphasis on projects that enjoy cultish devotion, such as “Game of Thrones” (with a new prequel series in the works) and a “Green Lantern” series. The latter, much like HBO’s “Watchmen,” will seek to transform an underperforming movie based on a popular comic book into, it’s hoped, another shade of streaming green.
Not surprisingly, Warner Bros. stressed animation and programs like “Sesame Street” as a means of reaching kids — a key component of the streaming business. At the other end of the age spectrum, the service cited an ability to court cinephiles through its ownership of Turner Classic Movies and the Warner Bros. library, among others; and documentary content, some courtesy of CNN.
Another asset, DC Comics, might not enjoy Marvel’s track record, but as Kevin Reilly, HBO Max’s chief content officer and president of TBS, TNT and truTV, noted, with current hits like “Wonder Woman” and “Joker” and a legacy of Batman and Superman films, the company intended to leverage “the associated brand love that DC generates.”
Similarly, HBO Max will pad that portfolio of established fare for young adults via deals to stream “South Park” and “Doctor Who.”
On its face, it’s a shrewd strategy, especially since the service won’t be up and running for another six months, giving the latest competitors time to gain a toehold — or fall on their corporate faces.
AT&T will invest billions in the venture, and doesn’t project generating a profit until 2025, at which point the company expects HBO Max to have reached 50 million domestic subscribers, at a cost of $14.99 a month. That is, notably, at the highest end of the streaming business — three times what Apple’s asking, though admittedly Apple has a significantly smaller product — while leveraging the existing relationship that HBO has with consumers.
Amid the cautionary notes scattered among the sky-high expectations, WarnerMedia CEO and AT&T president John Stankey acknowledged that one of the company’s tasks would be managing the decline of its existing assets while building this new model.
In other words, the cable/satellite TV universe that has been the backbone of the TV industry is going to see the life gradually siphoned out of it as the shift to streaming — and an influx of revenue heading to that — happens. The issue is nobody can know, for sure, precisely where and when those lines will intersect.
Stankey’s boss, AT&T CEO Randall Stephenson, maintained that the service would be unique, not a mirror image of Netflix (NFLX) or Disney. Describing the commitment to the venture near the outset of Tuesday’s presentation, Stankey said, “We’re all in.”
That’s a particularly good way of expressing what is, despite the meticulous planning by all these media companies, a great big gamble.