1. HBO Max Finally Gets A Deal With Amazon

Among the many things holding HBO Max back was the fact that they were not able to strike a distribution deal (carriage deal?) with either Amazon or Roku. The issue was that while both device manufacturers had helped to sell subscriptions to HBO Now via their channel stores, HBO didn’t want to know them anymore once it became Max, and wanted to have full control over the user experience.

Why It Matters

“Full control over the user experience” is a polite way of saying “we want access to all the data” that Amazon will be collecting. There are two reasons for that: (a) it helps HBO make better programming choices and allows them to steer viewers to other HBO Max shows and (b) when they launch the ad-supported version of HBO Max, they’ll be able to do a better job tracking the ads, especially who is watching them and what they do after seeing them.

While details of the deal have yet to be released, it’s likely that some compromise on data has been reached.

AT&T was not in a great negotiating position (to put it mildly): thus far, only 8.6 million people have activated HBO Max. If I am reading Variety’s stats correctly, 58% of them (5 million out of around 45 million) were already HBO subscribers who signed up for the new service--which didn’t cost them any extra money--and 42% (3.6 million) are brand new subs,

That’s an embarrassingly small number, especially when you consider that Peacock has signed up 22 million subscribers (though to be fair, those 22 million have only had to give up their email addresses, not $15/month. But still….)

HBO, as I’ve noted previously, is in a tricky situation with Max. 

Anyone who likes HBO programming is likely already subscribing to HBO and those who don’t currently subscribe have had thirty years to make up their minds and are unlikely to be swayed by the presence of Friends reruns. Add in too, the fact that at $15/month, Max is twice as expensive as Disney+, three times as expensive as AppleTV+ and a few dollars more expensive than Netflix. Meaning it’s unlikely to fall into the “why not add another Flix, it’s just a few more dollars” pile. Max is always going to be a subscriber’s #1 or #2 service. Not #3 or #4.

What they need is a slate of new originals that manages to appeal to both people who never liked traditional HBO programming and those who do. (And by that I mean more of a mix--it would be quite a feat to find a show that managed to appeal to both.) But with production slowed down, that’s not going to happen for a while.

Unless, of course, they take Rich Greenfield’s wise words of advice and merge with NBCU, where they’d get a whole slate of programming that appeals to “people who don’t really like HBO” along with the people who know how to create it.

Unlikely to happen, but it could solve their problems.

What You Need To Do About It

If you’re HBO, strike that deal with Roku and then run some advertising to let people know that you are finally available on both platforms.

And when you launch ad-supported Max, I’d go for a $5 or $6 price point. That way you’ll get all those people for whom it’ll be their third or fourth service.

If you’re Amazon and Roku, remember that the newest Google Chromecast is out there, and while it’s got a long way to go to catch up to you, the fact that it has HBO Max and Peacock may make it more attractive to holiday shoppers.

Bear in mind too that smart TV OEMs like VIZIO and Samsung are making user experience a real focus now and so smart TV owners may decide they don’t need your dongle-like devices after all. Especially if their smart TV’s OS gives them a broader array of programming choices along with voice controls and a single remote.

2.  HBO Bets Big On Wonder Woman 1984

In other HBO-related news, the service has been getting much press this week for its decision to release its upcoming expected blockbuster “Wonder Woman 1984” on the service the same day it is released in theaters and (the key part) not to upcharge viewers for the privilege of watching it. 

The fact that the release day is also Christmas Day would seem to add to the event nature of the film.

Why It Matters

Putting the film out like that is a great way to get buzz for HBO Max and to drive subscriptions. Given that Amazon was charging $20 for Pete Davidson’s indie filmesque “The King Of Staten Island”, getting a free month of HBO Max along with the ability to watch “Wonder Woman 1984” at no extra charge, is going to seem like something of a no-brainer and many people are sure to sign up, especially if HBO does a good job marketing it.

So that’s the good news.

The next part is a lot trickier: can HBO Max convince all those new subscribers to stay there beyond that first month?

On the plus side, there’s all the HBO programming along with lots of library content ranging from US reruns like “Friends” and “Big Bang Theory” to foreign series like “Valley of Tears”, an Israeli series about the Yom Kippur War.

On the down side, someone who’s not that interested in legacy HBO programming is mostly looking at a lot of library programming, and $15/month is a lot just to watch reruns of “Big Bang Theory.”

There’s also the question as to whether someone signing up to watch “Wonder Woman 1984” is the audience for legacy HBO series which tend to be a big edgier.

So that’s the TV piece and it’s something of a gamble.

On the movie front, HBO is getting lots of kudos for not upcharging subscribers to see the movie, though there’s no guarantee that in a year from now they won’t turn around and say “Just kidding! Wonder Woman was a pandemic thing! New movies are now $30... when we do same day releases. Otherwise you still have to wait a few months!”

So there’s that.

What will be interesting is to see how much this impacts box office overall, e.g., how many people sign up for HBO Max just to see the movie, how many see it in theaters (provided any theaters are actually open) and how many stick around HBO once they sign up.

It will also be interesting to see what other Flixes do--will Amazon and the studios it deals with feel pressure not to charge extra for theatrical movies? My guess is no, because Amazon has a thriving TVOD (transactional video on demand) business and viewers are used to paying to watch movies on Amazon and the fact that Netflix doesn’t upcharge viewers for movies like “Roma” and “The Irishman” hasn’t seemed to bother Amazon as yet.

But you never know.

What You Need To Do About It

If you are HBO Max, tweak that algorithm so that people who’ve signed up to watch “Wonder Woman 1984” get to see a programming slate that appeals to them. Maybe even offer a guided tour of Max to first time subscribers. This is something I strongly believe all new services should do, Flixes in particular, an optional “here’s what we’ve got and here’s where to find it.” Because people are inherently lazy and won’t spend much time exploring a site unless you show them what to look for and that could be the difference between a renewal and churn.

If you are one of the movie studios affiliated with a Flix, Warner is showing you an excellent model.

If you are one of the movie studios releasing on Amazon, $20 is a lot more palatable than $30.

If you are a consumer, remember, post-pandemic, that there’s still something special about seeing a movie in a theater on a giant screen.

And if you’re a theater chain, remember that post-pandemic, no one is going to want to pay for dirty crowded theaters with chatty patrons. No matter how long you’ve been closed for.