What does Throne play mean for HBO max.



HBO Max is not so much the future as a lifeline. Several publications have published Nielsen rankings for 2020, and they show that HBO, the de facto premium cable channel, has lost 38% of its total subscribers and 52% of its high-income subscribers 18-49 demographically year-on-year. These losses are due to the end of Game of Thrones. The diversity suggests that HBO programmes are still being watched, but that viewers are opting for the cable channel.

This highlights the tug of war between HBO and its parent company AT&T and the Roku and Amazon platforms, which took a long time to reach an agreement to give their users access to HBO Max. When looking at HBO content on Amazon Prime or the Roku channel, the platforms accounted for a large part of the profits, which meant that AT&T took a hit, even though it still got its product. Maybe even more important: Because subscriptions came in through these applications, companies did not have access to the subscriber data AT&T needed. HBO Max is their answer, with an extensive library to attract new customers. Between that and the drop in ratings they certainly had access to, Roku and Amazon probably smelled blood and used HBO’s desperation to give them more money and streaming rights for their applications.

And that despair must be palpable. In October, one month before HBO Max appeared on Amazon and two months before it arrived on Roku, The Verge reported that HBO third-quarter revenues fell 2.1% year-over-year to $1.8 billion. In the same quarter, total AT&T sales increased from $44.6 billion to $42.3 billion and total sales declined from $3.7 billion to $2.8 billion. This is probably partly due to the interruption of the availability of HBO Max on the two largest broadcasting platforms in the country. AT&T was in trouble, and HBO was largely responsible for this situation; they needed a deal.

What is interesting is the way in which these various agreements have been made. Roku has enabled HBO Max to be a hub for HBO content, which means that AT&T will receive the data it needs in exchange – as expected – for a reduction in advertising revenue that AT&T will receive from the advertising version of HBO Max, which will be launched this year, in addition to certain subscription fees. However, Amazon has made more concessions to AT&T, not only by removing HBO content from third party applications, but also by agreeing to make Warner Bros. movies available for rental or purchase. In return, Amazon received an extension of its contract with Warner Media for Amazon Web Services, Amazon’s cloud computing service. Amazon Web Services makes them clearly more money than their entertainment streaming platform, and they use the smallest part of their empire cleverly to support the strongest.

But AT&T has some catching up to do, and Warner Bros.’s release strategy for new films seems to consist of making lemonade out of a pandemic. As with Wonder Woman 1984, the entire film is released on HBO Max on the same day it is released at the cinema and stays in the cinema for a month at no extra cost to existing clients. This, they hope, will push them further, and if they really have to try to compensate for the loss of income from film, they should now also try to compensate for the loss of cable. In the short term it seems to be working; HBO Max subscriptions skyrocketed after the release of Wonder Woman 1984, beating all other streaming services in terms of subscriptions for three days of the year.

But now we come to the problem that the wired version of HBO encountered after the end of Game of Thrones : Do they keep these records? If you decided to subscribe to HBO Max just to see the new movie Wonder Woman, would you leave it after seeing it? HBO Max is $14.99 a month; where I live, it’s cheaper than a movie ticket. And if you have a family, it’s worth seeing a new movie. I’m sure some people will stick with it; maybe they like the other content available on HBO Max, or maybe they want to see enough of Warner’s performance in 2021 to make a subscription worthwhile. But if you’re only interested in two or three of their movies, why pay $180 when you can get everything you want for $30 or $45?

And then there is the frustration that has to be included in the equation. Most – I’d say the vast majority – were seriously disappointed with the last season of Game of Thrones, and when what was once a great show fell on our side in the finals, it was probably quite a few disappointed fans who became crazy about HBO. Of course it’s a stupid reaction, but it’s real. They now have their big film launch initiative, led by another big failure in Wonder Woman in 1984. Many didn’t like it and like the eighth season of Game of Thrones, it followed a beloved predecessor who left the viewers hoping for more. I see a lot of people drawing angry. And even for those who have their emotions under control, if that’s all they signed up for at HBO Max, the prospect of looking at it over and over again for a month is not exactly tasty. By the end of the year it could be a similar story, because many of these films are not exactly modern classics.

Don’t get me wrong, I don’t mention the time of death on HBO Max or anything ridiculous. It is quite possible that they will succeed (in the short term, I still say that theatres are not going anywhere and that the current release paradigm will disappear as soon as it starts to reduce that profit), and that HBO Max will be a winner for AT&T. It has a lot to offer and now that it is available on a larger scale, the number will increase as originally planned. Remember how people panicked when Friends had to leave Netflix in 2019, and how that led to spending $100 million to keep the Central Perk gang alive for another 12 months? Well, HBO Max has friends, and his popularity and ability to retest is a great motivation for people to sign up. But I also think there are a few bumps in the road, and ironically these are some of the biggest attractions that are a problem.

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