Initially, when WarnerMedia launched the advertising option of HBO Max in June 2021, the service didn’t have immediate rights to air theatrical movies simultaneously with theatrical distribution.
As of Jan. 1, all that changed.
John Stankey, CEO of AT&T, in the company’s fourth-quarter earnings call on Wednesday, said all programming content on all HBO Max options -- the ad-support option and subscription option -- “are identical now.”
Stankey expects “the ad-supported product as a percentage of [overall HBO Max] mix domestically in the U.S. to increase this year,” He says the subscription option will slow down somewhat.
AT&T might make more money via the advertising option. “Frankly, maybe in some cases, it's a bit more accretive if [customers] go the ad-supported route.” That said, he added that “we are indifferent as to what the customer chooses.”
AT&T believes its deal to sell majority control of WarnerMedia to Discovery will close in the second quarter. As yet, Discovery executives haven’t hinted what they will ultimately do with HBO Max -- whether they would merge it with its discovery+ service, or leave it as a standalone business.
One thing is sure: Discovery, largely a TV and media company that factors in huge financial revenue from advertising across all its media businesses, will continue to have a healthy streaming ad-supported businesses. HBO Max will be a big part of it.
Much of this makes sense in the streaming world -- at least in terms of different operators. Consumers who shift in and out of streaming platforms want similar expectations in terms of content, accessibility and choice.
This reality could be divided into two types of streamers -- Netflix and everyone else.
One major difference: Netflix releases a season's worth of TV episodes at the same time. Virtually all other major streamers still offer a linear-TV like schedule -- releasing one episode a week at time.
And, of course, Netflix has no advertising option -- another easy distinction for streaming consumers to understand. At least at the moment.
The same goes for movies. While Netflix provides some movies a limited three-week release prior to airing on the platform, the number of theater locations can be small. Netflix uses theater distribution to qualify for major movie award hardware.
Bottom line: Essentially for consumers, the only real accessible way to consume Netflix content is on its streaming platform. We see the big picture here.