HBO Max Is Hollywood’s Newest Streaming Upstart. Can It Become a Star? – The Wall Street Journal


One of HBO Max’s new offerings is ‘The Not-Too-Late Show,’ starring Elmo of ‘Sesame Street.’



Photo:

HBO

By

Joe Flint

The launch of HBO’s streaming service was just three weeks away when HBO Max boss Kevin Reilly laid out the situation for his fellow executives on a video call.

The good news, he told them, was the service had more than 100 shows in various states of production. The not-so-good news? Many were in limbo due to the coronavirus pandemic.

Some of the biggest shows—including a much-anticipated “Friends” cast reunion—won’t be ready when WarnerMedia’s HBO Max debuts Wednesday, the latest entertainment giant to join the streaming wars. That puts additional pressure on HBO Max executives to make sure the platform—which at $15 a month is also much pricier than rivals like

Netflix Inc.’s

$12.99 standard fee and Disney+’s $6.99—won’t be starved for new shows in coming months.

The stakes are high for WarnerMedia Entertainment and its parent

AT&T Inc.

HBO Max is WarnerMedia’s hedge against consumers cutting the cord to traditional cable and satellite services. It wants to establish its own direct relationship with its audience much the way Netflix and Disney+ have. AT&T, in turn, will use its base of phone, broadband and pay-TV customers to drive subscriptions to the service as well.

As movie theaters sit empty during the coronavirus pandemic, some films are being released direct to streaming services and digital platforms, shaking up a distribution model that’s been in place for decades. WSJ explains.

The pandemic has been a boon to the streaming industry: Netflix recently reported its largest subscriber surge in years, while

Walt Disney Co.

’s Disney+ topped 50 million users just months after it launched.

But it has been a different story for the services that had yet to launch when the virus hit. Sign-ups for Quibi, which produces short-form videos tailored for people on the go, have been underwhelming.

Comcast Corp.

’s streaming service Peacock, which became available to Comcast customers last month but won’t be seen by the broader public until July, is uncertain when some of its highly-anticipated new shows like a “Battlestar Galactica” reboot will be ready.

HBO Max boss Kevin Reilly brushed off concerns that the streaming service would harm the high-end brand of HBO. ‘We’re going to have Tiffany aisles within a larger store.’



Photo:

Willy Sanjuan/Associated Press

In mid-March, when the virus started forcing most Americans to stay home, top HBO Max executives briefly considered delaying the streaming service’s launch, according to Robert Greenblatt, chairman of HBO Max parent WarnerMedia Entertainment.

“I think we wrestled with it over a couple of days,” Mr. Greenblatt said in an interview. “It quickly dawned on us that people were watching more television and we thought…‘let’s get this thing to the customers.’”

For a while, it wasn’t clear the tech platform on which the service would run could be completed by people working remotely. That was further complicated when a power outage in Seattle affected a building where HBO Max was being tested.

“We had to go out and buy new equipment and let people put it in their apartments and homes to carry on with the testing and examine the results,” incoming AT&T Chief Executive John Stankey said.

The pandemic is the most formidable challenge to stand in the way of HBO Max, but certainly isn’t the first. The service’s inception was delayed by a nearly two-year long antitrust dispute between then-acquirer AT&T and the Justice Department, which meant AT&T only gained control of HBO parent Time Warner at a time when most rivals had already laid out plans for their own streaming services.

“It would have been great to have been in the market a year ago,” Mr. Greenblatt said.

Another difficult endeavor was turning HBO into the anchor of a broader, more prolific platform.

Decades ago HBO championed the edgy and high-production TV content that is now widespread on streaming services including Netflix,

Amazon.com Inc.’s

Prime Video and Disney-controlled Hulu. AT&T CEO

There have been concerns among HBO purists that the network’s image would be hurt by HBO Max. The first marketing effort from the new streaming service showcased its various offerings with pictures from “The Sopranos,” “Friends” and “The Big Bang Theory” and a tagline: “From Bada to Bing to Bang.” It caused some eyerolls among HBO employees.

Mr. Reilly brushed off those concerns. “We’re going to have Tiffany aisles within a larger store,” he said.

HBO Max head of original programming Sarah Aubrey said HBO Max’s originals will complement HBO, not duplicate it. The shows ready for launch will include a talk show from the “Sesame Street” character Elmo, new Looney Tunes cartoons and “Love Life,” a romantic comedy starring Anna Kendrick, part of what Ms. Aubrey called an effort to focus on children, Generation Z and millennial viewers. Programs for children has been in high demand during the coronavirus lockdowns across the country.

Anna Kendrick is starring in a new romantic comedy on HBO Max called ‘Love Life.’



Photo:

SARAH SHATZ/HBO

HBO’s subscriber numbers have been relatively flat for the past several years at around 33 million, and WarnerMedia is betting that the broader mix of programming available on HBO Max will appeal to people who steered clear of HBO because of its often dark and risqué content.

HBO has been churning out more new shows and movies since the AT&T takeover as well in the wake of increased competition from Netflix, Amazon and others. It is launching a new version of “Perry Mason” starring Mathew Rhys and the drama “Lovecraft Country” produced by Jordan Peele and J.J. Abrams.

The streaming service will have 10,000 hours of content including 1,300 feature films at launch, part of a big library of movies and TV shows including “South Park” and the “Harry Potter” franchise. HBO Max is expected to release 11 more original series between mid-June and August including new episodes of the cult favorite “Search Party,” a series about a group of friends who become entangled in a hunt for a missing friend, and the DC Universe show “Doom Patrol, a drama about superheroes who received their powers under tragic circumstances. In August, HBO Max will premiere “An American Pickle,” a comedy starring Seth Rogen about an immigrant who falls into a vat of pickles and has a Rip Van Winkle experience.

HBO Max also scored a coup, cutting a deal with sister movie studio Warner Bros. and director Zack Snyder to release his cut of the film “Justice League,” which hard-core fans of the DC Comics property have been clamoring for since 2017.

At a price of $15 a month, the service is more expensive than all its streaming rivals, which could make it a harder sell at a time when the worsening economy may prompt consumers to cut back on nonessential expenses.

WarnerMedia had no wiggle room on HBO Max’s pricing because it isn’t allowed to make the service cheaper than HBO or current streaming service HBO Now under existing agreements with cable and satellite operators.

Current subscribers to HBO will have access to HBO Max at no extra charge either through HBO Now or if their pay-TV distributor has cut a deal to offer the new service. If not, subscribers will have to drop HBO from their current service and subscribe directly to the platform.

WarnerMedia is still working to make sure HBO Max is available on all pay-TV and streaming platforms by Wednesday. Holdouts still include Comcast Corp.,

Dish Network Corp.,

Amazon Fire TV and Roku.

Asked how many homes the service would be available in at launch, Mr. Stankey said, “check with me at about 11:58 p.m. on the 26th.”

Mr. Stankey also said the company isn’t planning to disclose HBO Max’s subscriber numbers a day after the launch, something Disney did back in November when it touted 10 million Disney+ sign-ups on its first day.

“We don’t have to worry about one day’s worth of activity to say, ‘are we successful or not?’” he said.

Write to Joe Flint at [email protected]

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