1. Max Is Born

WBD’s new Max app, the love child of HBO Max and Discovery+ launched this week.

There were, as is often the case with these things, numerous complications: tech issues around logins, Roku making you manually update your HBO Max app (I will admit to resorting to Google for instructions) at which point you also needed to find and re-enter your password. Plus a temporary though extremely tone deaf glitch wherein writer and director credits were lumped together.

The new app does not appear to be significantly easier to navigate than either its predecessor or its peers.

The top level menu lets me choose between series, movies and HBO, which seems like a less-than-useful distinction, though I am willing to accept that this is my own prejudice and they’ve likely done a lot of research showing that viewers do indeed want to immediately distinguish between movies and TV series on Max and that they consider HBO, which has both movies and TV series, to be a separate animal.

Or not.

They also seem to have missed a big opportunity by not porting over Discovery+’s linear channels (more on that in a minute.)

But all that aside, it’s an impressive app and, unpopular opinion, I think leaving HBO out of the new name was actually a very good move.

Here’s why.

Why It Matters

People have had about 25 years to decide whether they like HBO and the sort of upper middlebrow, second golden age of television series it is known for.

Those viewers who do like it, who likely subscribed to HBO via cable and/or via the HBO Max app are not going to stop watching Succession because the new app doesn’t have HBO in its name.

OTOH, it was going to be a struggle to get the Haters to subscribe to something called “HBO”. So “Max” was an easy shorthand for “not just all those snobby shows whose appeal eludes you.”

Because there are a whole lot of people who don’t get why “Barry” is supposed to be funny.

It also eliminates all the confusion around the plethora of apps with “HBO” in the title— Now, Go and Max.

Turning to the app itself, one of the more impressive things about Max is the sheer amount of programming it has.

Which is why I am surprised they did not double down on the linear channels thing Discovery+ had going on.

Linear channels would be a huge win for Max for many reasons:

• People like linear channels, especially for library content. This is a lesson learned from the FASTs. It’s comfort food, it’s background noise. But mostly it’s about not having to constantly make a choice every time you turn on the TV.

• Shows on HGTV and other Discovery empire networks are fairly evergreen and so easy to turn into linear channels. Many have hundreds, if not thousands of episodes as well, and they’re easy to binge.

• It's an easy way to get former HBO subscribers to sample things other than HBO. Or at least make them aware of the myriad of options available on Max.

• On the ad-supported tier, it increases time spent on platform and thus the number of ad views. Possibly the single most important argument for introducing linear channels, especially as WBD is trying to get the ad-supported version going.

• It is an easy way to surface the massive library Max has. And maybe convince people to stay subscribed once Succession is over.

So there’s all that and then there’s the price tag, which is pretty steep at $16/month for the ad-free version, $10 for the ad-supported, and so proving to consumers that they are, in fact, getting a lot for their money is going to be key.

What You Need To Do About It

If you’re WBD, add in the linear channels on the next iteration. You will not regret it.

I’d also offer the option for much greater customization of the app, along with a “For Dummies” level explanation of how to do so. Maybe 20 percent of users will actually even bother (and that is a very rosy estimate) but those who do will be subscribers forever.

If you are one of the other SVOD apps, this is a behemoth and so long as HBO keeps cranking out buzzy shows, it’s going to be on many people’s “must have apps” list. So plan accordingly.

If you’re watching the industry: Max rolled out a $20/month option with more 4K titles, better audio and some other bells and whistles. It will be interesting to see how many people take them up on this. My impression is that outside of a core group of “videophiles” consumers are underwhelmed by 4K and don’t see much of a difference. That extra $4/month will be a decent enough test of its value proposition and popularity

2. Netflix Starts US Password Crackdown

It’s not like it was a surprise as they’ve been talking about it for months, but the email many of us got from Netflix about “sharing between households” this week definitely hit like a ton of bricks, especially given the $8 price tag they were suggesting for those “outside your household.”

Previous reports seemed to indicate that Netflix would be charging a more reasonable $3 for those extra accounts and there was a hope they’d make a distinction between adult children who had been on the family account since they were in middle school and random folks sharing accounts as a way to game the system.

No dice.

It has also not gone unnoticed that the $8 price tag, which is a full dollar more than the ad-supported plan, seems designed to drive all those People Outside Your Household™ to set up their own ad-supported accounts.

Why It Matters

Around 66% of US households already have Netflix.

Smartphone penetration is at around 80%.

The math on that says there aren’t that many new users for Netflix to grab, unless a lot of folks start downgrading from ad-free.

Hence the push to sign up sharers.

But, as noted above, not all sharers are created equal.

People tend to put adult children in a separate bucket, especially, as noted, if those adult children first started using the family account long before they became adults.

There is precedent for this: adult children get to remain on their parents cell phone accounts, their auto and health insurance and their Amazon Prime accounts. So why not their streaming accounts?

Which means the $64,000 question is whether people are going to see the crackdown as Netflix rightfully calling out scammers or Netflix being unnecessarily punitive?

The answer seems to be “it depends.”

People who split accounts with old roommates or with friends really don’t have much of a leg to stand on and I suspect they know that, which is why they are unlikely to give Netflix much pushback.

Similarly families where the middle aged children maintain accounts for their Boomer parents because it was easier than being their personal IT departments will go ahead and get accounts for mom and dad.

It’s that middle ground—parents of college students and recent graduates who may or may not return to the nest sometime soon—who are the issue and it’s unclear what percentage of password sharing they represent, whether they regard what they are doing as “password sharing”, and, given that, how likely they are to actually add on a new account or just keep at it until Netflix kicks them off.

Which is, of course, the other unanswered question: what is Netflix’s enforcement mechanism?

Will they automatically suspend accounts that regularly log in from different IP addresses? Automatically add $8/month for each new IP address that is unaccounted for? Force an account logging in from a different IP address to send a text-messaged code in? Something else?

That and the potential buzz it generates—positive or negative—is going to be key to how the crackdown is greeted and it will also have a significant impact on the overall perception of Netflix

What You Need To Do About It

If you’re Netflix, just be very smart and very careful about how you handle the crackdown, paying careful attention to social media and the buzz you find there. You do not want to be painted as the TV Police nor do you want to be painted as a bunch of suckers who make all sorts of noise about cracking down on password sharing but ultimately do nothing about it.

It’s a fine line to walk.

If you are one of the other streaming services — watch carefully.

You are going to need to do your own password sharing crackdowns soon enough and you want to take note of what Netflix is doing, how it is being received and how their Comms team is handling it.