It’s a question “Games of Thrones”-like in scope: Will the power of HBO give a boost to WarnerMedia’s new streaming service? Or will WarnerMedia’s new streaming service dilute the power of HBO?
The media conglomerate announced Tuesday that it now has a name and a launch date for its much-anticipated streaming service. The company said it will lean heavily into the HBO brand and name it HBO Max. The service will debut next spring.
HBO Max “will offer an impressive direct-to-consumer experience for everyone ranging from families with young children to adults of all ages,’ the company said in a statement. It noted the service will include all HBO content; a raft of original programming; and a range of material from the libraries of Warner Bros. film and TV studios.
Among those latter properties, the AT&T-owned company said, will be “Friends” and “The Fresh Prince of Bel-Air.” “Friends,” you may recall, was given an 11th-hour reprieve by WarnerMedia when the company agreed to renew a licensing deal with Netflix at the end of 2019. That deal will not be renewed for 2020 as Warner brings the popular streaming hit it in-house.
“The Fresh Prince” is not currently on any subscription service.
Also on tap will be upcoming CW shows “Batwoman” and “Katy Keene,” the recently ended cable teen soap “Pretty Little Liars” and original content produced by Reese Witherspoon and the “Riverdale” executive producer Greg Berlanti,” with whom HBO Max has signed deals. This comes atop previously announced original series such as a “Dune” take and an animated “Gremlin” series.
Not available – at least not for now – are the many shows the Warner Bros. TV entities currently has housed elsewhere. These include upcoming projects like Neil Gaiman’s “Sandman” ongoing series like “Young Sheldon” and past hits like “The Mentalist,” “The Middle,” “Gotham.” Among untold others.
Pricing wasn’t announced but the service is believed to hover in the $15-17 range – in the same ballpark as HBO for many cable subscribers.
The focus for months regarding Warner’s new service has been on whether there’s room for another streaming service in American consumers’ budgets, what with Disney+ launching later this year and Netflix continuing strong.
“‘Make WarnerMedia your seventh streaming service.’” Conan O’Brien joked recently about a fictitious slogan for the service.
But Tuesday’s announcement raises another, fresher question: just how much can HBO, a service consumers already pay for, be used to leverage Warner into streaming dominance?
And, maybe more important, is it a good idea to use it for that purpose?
Some 35 million households now subscribe to HBO either via their cable service or the HBO Now streaming service. They’re used to paying for premium content. HBO is betting that they’ll pay roughly the same amount for a lot more of this other stuff. HBO Max subscribers will get everything a current HBO subscription delivers plus a lot more from TBS, TNT, Cartoon Network and CNN.
That would seem like a pretty good deal – and pretty shrewd for WarnerMedia.
But it also raises the question of whether the company really can keep the price low and still achieve profitability? Original content is expensive — the Berlanti deal alone cost more than $300 million. Can it really charge the same as HBO and give you so much more than HBO?
The company would argue that it can get around that issue because it can keep a lot more of the revenue than an HBO subscription fee, which has to be split with distributors. But whether that’s still enough to stay in the black remains unclear.
Maybe even more pressing is the branding question. Sure, HBO is much better known to typical consumers than WarnerMedia. But that came after years of top-tier, splashy and Emmy-winning programming. “Fresh Prince” and “Pretty Little Liars” are...something else. And it’s very possible crowding them all under the HBO umbrella could water down the HBO brand.
“How HBO’s exclusivity – or lack thereof — evolves will be one of the most interesting plays to watch,” said Stephen Beck, the founder of the consultancy cg42 and an expert on streaming. “In many ways it’s more intriguing than who has a catalog hit like ‘Friends.’”
It’s a paradox. To gain prestige for the service, WarnerMedia needs to rely on HBO. But if they make HBO part of the service, it may not have prestige.
On top of it all, HBO is currently in a post-“Thrones” lull. There’s no show like it on the network now, and it may be a while before there is one again. So this isn’t a great time to use HBO as a lever – in fact, even before all this, there floated the fear that HBO could bleed subscribers without a blockbuster lure.
Given how well positioned Netflix and Disney are in the streaming world, there weren’t a lot of places Warner could go besides HBO. The question is if that destination is a land of streaming goodness -- or an also-ran abyss.