HBO Max ‘does not change the rules of the game’ for WarnerMedia: analyst

HBO Max 'does not change the rules of the game' for WarnerMedia: analyst

According to an industry insider, HBO Max, the major streaming service launched last week by WarnerMedia, is unlikely to propel the company to the top of the streaming industry.

“HBO Max does not change the rules of the game for AT&T,” Evercore ISI analyst Vijay Jayant said of the service, which launched on May 27.

Featuring original content, as well as movies and shows from HBO, Cartoon Network, and Turner Classic Movies, HBO Max is WarnerMedia’s offering aimed at competing with streaming giants like Netflix, Disney +, Hulu, and Amazon Prime Video.

But the $ 14.99-a-month service launched without any of the content it had promoted earlier this year, including “The Dark Knight,” “13 Going on 30,” “The Matrix” and “The Hobbit: The Desolation of Smaug.” . “, As well as a smaller distribution scope than expected.

While HBO Max is available on digital media like YouTube and Apple TV, as well as resellers like Charter and Verizon, it was launched without having signed an agreement with Comcast, the number one cable distributor in the US. USA

Hours after launch, AT&T struck a deal with Comcast, but to analysts’ dismay, it failed to strike a deal with the Roku and Amazon Fire platforms, which have more than two-thirds of the US broadcast market. USA

Evercore’s Jayant said the “difficulty” in negotiations between HBO Max and distributors came down to price disagreements and the confusing brand.

AT&T currently offers HBO for the same price as HBO Max, which has roughly twice 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 clarity in pricing and branding, he noted, pointing to the successful launch of Disney’s streaming service last November.

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“The HBO Max launch so far has been noticeably less fluid than the Disney + launch, due to a variety of factors, including confusing markings, uncertainty about how to obtain the product, and limitations on how consumers can view the product, particularly on TV, “he said, before moving on to the positive.” With that said, we think HBO Max is a good product, with a strong line of content, a strong (but not particularly distinctive) user interface, and endorsed by a brand of great prestige. “

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Cory Weinberg

About the Author: Cory Weinberg

Cory Weinberg covers the intersection of tech and cities. That means digging into how startups and big tech companies are trying to reshape real estate, transportation, urban planning, and travel. Previously, he reported on Bay Area housing and commercial real estate for the San Francisco Business Times. He received a "best young journalist" award from the National Association of Real Estate Editors.

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