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HBO Max, the all-important streaming service launched last week by WarnerMedia, isn’t likely to propel the company to the top of the streaming industry, according to one industry expert. “HBO Max isn’t a game changer for AT&T,” Evercore ISI analyst Vijay Jayant said of the service, which launched on May 27. HBO Max, which includes …
HBO Max, the all-important streaming service launched last week by WarnerMedia, isn’t likely to propel the company to the top of the streaming industry, according to one industry expert.
“HBO Max isn’t a game changer for AT&T,” Evercore ISI analyst Vijay Jayant said of the service, which launched on May 27.
HBO Max, which includes original content as well as films and shows from HBO, Cartoon Network and Turner Classic Movies, is WarnerMedia’s offering meant to compete with streaming giants like Netflix, Disney+, Hulu and Amazon Prime Video.
But the $14.99-a-month service launched without some of the content it had promoted earlier in the year, including “The Dark Knight,” “13 Going on 30,” “The Matrix,” and “The Hobbit: The Desolation of Smaug,” as well as a smaller-than-expected distribution reach.
While HBO Max is available on digital outlets like YouTube and Apple TV, as well as distributors such as Charter and Verizon, it launched without having inked a deal with Comcast, the number one cable distributor in the US.
Hours into launch, AT&T came to an agreement with Comcast, but much to the dismay of analysts, it was unable to reach an agreement with platforms Roku and Amazon Fire, which have more than a two-thirds share of the US streaming market.
Evercore’s Jayant said the “difficulty” in the negotiations between HBO Max and distributors came down to pricing disagreements and confusing branding.
Currently AT&T offers HBO for the same price as HBO Max, which has roughly double the content. Distributors argue that because both services cost the same price, it “devalues” the product they currently sell, namely HBO, the analyst said. He explained that distributors want AT&T to lower the price of HBO or allow customers to upgrade to HBO Max for free. That would create both pricing clarity and branding clarity, he noted, while pointing to the successful launch of Disney’s streaming service last November.
“HBO Max’s launch has thus far been notably less smooth than the launch of Disney+, due to a variety of factors, including confusing branding, uncertainty about how to get the product, and limitations on how consumers can actually watch the product, particularly on television,” he said, before turning to the positive. “With that said, we believe HBO Max is a good product, with a strong content lineup, a solid (but not particularly distinctive) user interface, and the backing of a highly regarded brand.”
