1. AT&T and the HBO Max Pricing Dilemma
So this week’s rumor about AT&T chief John Stankey’s pricing plans for HBO Max have the new service launching at a paltry $14.99, the same price as HBO Now.
Why It Matters
While this may more than likely change over the next few months (the launch date is now projected to be April 2020, but don’t hold your breath on that one), the idea seems to be that HBO Now customers will switch over to HBO Max and that the (slightly) lower price point will allow HBO to more easily attract new customers.
This all makes sense when it comes to the 8 million (give or take) people who currently subscribe to HBO Now and more important, it lets Max start off with a decent sized user base.
It does not, however, address the issue of what happens to those 50 some odd million people who currently subscribe to HBO via their MVPDs and have access to HBO Go.
That’s the million dollar question.
Because if Max has all the hot shows, then they are all going to be pissed AF that they’re locked into some ratchet contract with their MVPD and can’t get out of it and their friends who have Max are watching all the good stuff.
OTOH, if HBO upgrades them all to Max, the problem goes away and Max suddenly has almost as many viewers as Netflix.
The problem of course is what to do about the non-HBO part of Max, but we have a feeling that consumers will not be all that worried about the answer to that, as they likely already get TNT, TBS and CNN on their cable package and can live without those library CNN documentaries.
What You Need To Do About it
If you’re John Stankey, you know what you should do: turn both HBO Now and MVPD HBO into HBO Max and put those new Max shows on HBO Go too. Boom! You’ve got almost as many viewers as Netflix, and eight million more people you can show ads to.
If you’re an MVPD, roll with it. The Max thing is going to create stickiness, especially if the Max shows are any good.
(And if you add Netflix to your set top box bundle and program guide on top of Max, then we’d bet that you’ve locked a goodly number of older viewers into place for the next five years.)
If you’re one of the other Flixes and you can strike deals with some of the larger MVPDs, then go for it. It’s an excellent way to grab all those older viewers who don’t want to give up cable yet but are woke enough to know that there’s life after broadcast and enjoy bingeing on high quality dramas and the like.
2. Roku and Amazon FTW
Amazon released their latest Fire TV numbers which place them ahead of Roku with 37 million “active users” worldwide.
Roku is sure to fire back shortly and while everyone’s numbers are self-reported and based on seemingly different metrics, that’s not the key point here.
The point is that in the world of streaming devices and their advertising ecosystems, Amazon and Roku are #WINNING.
Why It Matters
If Amazon and Roku are winning, then Apple and Google are losing.
It’s not hard to understand why either.
Apple has been on a multiyear streak of thinking their products are better than they are, and woefully overpricing them.
(Looking at you, HomePod.)
And while Apple has been clear that it’s not interested in sharing data or running an ad business, that’s not been enough to get consumers to spend $150 on an Apple TV when a $29 Roku will do them just fine. (Not to mention all those Chinese TVs running the Roku OS that don’t even need a separate device.)
Google is even more curious.
We’ve long called them the magpies of the tech world, flitting from one shiny new project to the next. Which is unfortunately what seems to have happened to Chromecast.
The product was well received at first, but then people started to complain that it didn’t have a remote, that the smartphone interface was great until you started using another app on your phone and couldn’t remember which app you’d launched the video from in order to pause or rewind it.
But rather than roll out a new and improved version with a physical remote, Google just sort of let it hang out and die a slow death.
Which leaves Roku and Amazon fighting it out.
Roku has first move advantage, a slightly better interface and all those Chinese smart TVs. (Don’t discount the scrappy underdog thing either.)
But Amazon has billions of dollars (which they could use to entice those Chinese OEMs over to the dark side once their deals with Roku expire) and they can pretty much give away the Fire TV any time they want. (It was just $15 on Prime Day.) And don’t forget the Alexa integration.
So there’s that.
Not to mention the fact that having two strong players is always better for an industry than just one.
What You Need To Do About It
If you are Apple and Google, could be time to get out the white flag. That or go back to the drawing board and come back with something for 2020.
Apple could, to be radical, roll out an actual TV set with their Apple TV OS in it and give it away to anyone who subscribed to their Apple TV+ service for two years.
(If nothing else it would mean that Wall Street guy who spent 10 years predicting an Apple TV was in the works would finally be right.)
If you’re one of the networks, platforms or vMVPDs, you want to make sure your OTT ad plan takes Roku and Amazon into account. (Chances are it already does, but still…)
If you’re one of the upcoming Flixes and you’re planning on creating your own walled garden (cough Xander cough), you might want to consider how many walled gardens the market will bear, especially ones that aren’t device-based. (And that Android set top box doesn’t count.)