Commentary

Streaming First-Run Movies Works For HBO Max

Is WarnerMedia's “mistake” now really working?

AT&T’s HBO/HBO Max added 2.7 million new U.S. subscribers in the first quarter, now totaling 44.2 million subscribers -- all this for the highest-priced premium streaming service out there. HBO Max has a monthly price tag of $15.99 a month.

But pricing hasn’t been the "mistake," according to industry analysts. For many, it was assumed that running theatrical movies on HBO Max and cinemas simultaneously was the issue.

The announcement angered movie theater executives, as well as movie producers and directors. And recently, Jason Kilar, CEO of WarnerMedia, admitted the company could have done some better communication about the move.

Why call it a mistake now? Recent theatrical deals between WarnerMedia and Cineworld, owner of Regal Cinemas, show the studio is going back to the old way of distribution -- giving theater owners an exclusive period to run the movies.

Still, consumers get the picture. A least for this year, there really are top-level movies on HBO Max -- perhaps more so than other places. According to analysts, this is a major reason for its growth.

This doesn’t come from any specific HBO Max marketing plan. We don’t see any marketing for HBO Max that says: “HBO Max: Get theatrical movies at home before they are in theaters.” Theater owners might scream, after all.

Still, movies seem to be the differential in this budding streaming world. And mind you, not just for HBO Max. Disney+ has been kind of doing the same thing -- though not for all its movies for an entire year, unlike HBO Max.

Next year, things might shift for HBO Max -- especially considering that Cineworld deal. Maybe HBO Max will offer more limited movies for simultaneous releases with theaters -- just like what Disney+ is currently doing.

Netflix is still the big player. In the U.S., Netflix now has 74 million subscribers, adding just 450,000 in the current period. Much of its 4 million growth in the period came from overseas. Disney+ has also seen quick growth, primarily from overseas markets.

Right now, HBO Max is seeing the big picture -- in the U.S.

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