HBO Max Is Not A Game Changer

If you don’t have Amazon Fire TV or Roku, maybe your new premium service won't succeed. This would seem to be probable  for mid- and small size premium video streamers.

HBO Max isn’t that. Still, AT&T, which just launched the service, may be held back a bit: Amazon Fire TV and Roku are not carrying the streamer.

Fire TV and Roku each have around 35 million to 40 million monthly active users, which means anywhere from 70 million to 80 million in total U.S. TV streaming households for the two services — not a small piece of the streaming TV puzzle.

This isn’t to say TV homes don’t have other ways to get HBO Max, via whichever other distributors they can access. Still, Vijay Jayant, media analyst of Evercore ISI, says this means a bumpy start.

He points to issues around the HBO Max marketing message -- which could be confusing to consumers. That's especially true when it comes to weighing HBO Max versus the regular way they can get HBO -- on pay TV providers like cable, satellite and telco -- or streaming apps HBO Now and HBO Go.



HBO Max has doubled the content of regular HBO, for example, but both are priced exactly the same: $15.  Huh? So why would consumers stick with the older service? (Maybe they don’t have a broadband service.)

All this has legacy pay TV provider executives complaining about HBO wholesale pricing, which could result in AT&T seeing distributors looking for lower price adjustments.

Jayant says overall: “HBO Max isn’t a game changer for AT&T.”

Other analysts are worried the focus at AT&T, mainly as a wireless, broadband communications and TV distribution (DirecTV, AT&T TV) is not pursuing consumers, much like Disney has with Disney+. That could be a disadvantage.

Disney’s emphasis has always focused on entertainment content -- of all types. AT&T doesn’t necessarily look at future customers this way. It may want them to buy more wireless and broadband service services.

This has always been the problem for TV and communication distributors when adding in content. It’s tricky. To its credit, Comcast Corp. has been able to navigate this well -- no easy task.

For example, you rarely -- if ever -- see Comcast cross-selling its broadband, wireless and video services, while at the same encouraging consumers to watch more episodes of “The Voice” or the summer Olympics. Or vice versa.

Comcast pretty much treats marketing for its content and distribution separately. (That said, business marketing may be handled a bit differently.)

So where are we in the early stages of premium streaming for AT&T, as well as its future content efforts? Enduring growing pains.

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