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HBO Max reached 4.1M subscribers in first month, despite lack of distribution on Roku and Fire TV

HBO Max, the AT&T-owned streaming service that combines HBO with WarnerMedia content, now has 4.1 million subscribers who have activated their Max accounts, since its launch on May 27. Combined, HBO and HBO Max reached a total of 36.3 million U.S. subscribers by the end of the second quarter, according to statements made by AT&T CEO John Stankey on today’s earnings call. That figure has grown 5% from the 34.6 million subscribers the properties together had at the end of last year.

The 4.1 million figure represents those who have activated their accounts out of the total 26.5 million subscribers who have been given access to HBO Max. Of these 26.5 million, 23.5 million are wholesale (MPVDs), and 3 million are retail (direct to consumer.) However, the 4.1 million doesn’t include the entire 3 million subscriber base. *

WarnerMedia also clarified that there are 1 million wholesale subscribers using HBO Max via one of AT&T’s wireless plans or via AT&T’s broadband and pay TV service where it’s bundled.

Though it’s still early days for HBO Max, these numbers indicate that the vast majority of traditional HBO customers have not yet tried HBO Max, even though it’s free for them to use. Currently, HBO customers can authenticate with HBO Max using their cable or satellite TV provider account information. HBO Now subscribers, meanwhile, are automatically upgraded to Max across Hulu, mobile apps, select ISPs, and the HBO Now site.

The HBO strategy, from a consumer perspective, has been confusing. HBO is known as premium channel with mostly adult content. This chanel had been distributed across mobile devices as HBO GO for traditional pay TV customers and HBO Now for over-the-top users. With the launch of HBO Max, the goal has been to transform HBO into a broader offering for the whole family, similar to Netflix . To do so, HBO, WarnerMedia and other licensed content was combined under one roof.

AT&T said today that HBO Max customers spent, on average, 70% more time viewing the service on a weekly basis, compared with HBO Now. It also stressed the popularity of its original content, noting that all 6 of its new originals found themselves ranked among the top 25 viewed series on the platform. By August, HBO Max will have 21 new original series on the platform.

But WarnerMedia still wants to distribute “standard” HBO to its larger, existing customer base, and has a number of deals in place to do so across a variety of streaming TV services, like Hulu, and platforms, like Apple TV, in addition to numerous pay TV providers. In addition, HBO is sold as an add-on premium subscription across some platforms, like Amazon and Roku.

That makes it difficult for consumers to understand which version of HBO they can get and where it will work.

That significant challenge is made worse by the fact that WarnerMedia has not yet been able to ink deals for HBO Max with the two top streaming media platform providers in the U.S.: Amazon and Roku, which control 70% of the market. That means consumers who have heard of the new service won’t be able to find the app on these devices.

Stankey addressed this problem today when speaking to investors.

“We’ve tried repeatedly to make HBO Max available to all customers using Amazon Fire devices, including those customers that have purchased HBO via Amazon,” he said. “Unfortunately, Amazon has taken an approach of treating HBO Max and its customers differently than how they’ve chosen to treat other services, and their customers.”

The comments, which notably skip over any mention of Roku, come only days before Amazon CEO Jeff Bezos is set to testify before the House Judiciary Antitrust Subcommittee, along with CEOs from Apple, Google and Facebook, as part of the Committee’s ongoing investigation of potential anti-competitive practices in the digital marketplace.

One area of concern for the Committee is the power and control the tech companies have over their digital marketplaces, where they set terms, ban apps and services from distribution, and take commissions from businesses that compete with their own.

AT&T’s issue with Amazon, in this case, has to do with how it wants to distribute HBO Max across the media platforms. With its shift in strategy, AT&T aims to offer consumers a standalone app, similar to Netflix — as it does now on Apple TV and Android TV. But Amazon and Roku want to also sell subscriptions to HBO Max like they currently do for HBO through the Amazon Prime Video Channels platform and Roku’s Premium Subscription platform on The Roku Channel.

With Roku’s investment in The Roku Channel it’s been distancing itself from being the neutral platform it once was, as it’s now motivated to make deals that benefit its own goals around The Roku Channel’s subscription marketplace, the same as other non-neutral players, like Amazon. This is not a problem unique to HBO Max, either. NBCU’s new streaming service Peacock also failed to offer Roku and Fire TV support at launch, for similar reasons. Unfortunately, the consumer is the one who ultimately loses here as tech giants grapple over not only the dollars, but who will own the customer relationship in the long run.

Without distribution, AT&T’s WarnerMedia could be challenged to meet its goals for HBO Max.

The company, however, claims it’s still on track for 50-55 million HBO Max subscribers in the U.S by 2025. As part of this strategy, WarnerMedia also plans to launch HBO Max internationally and offer a lower-cost, as-supported version of the service sometime next year.

* Correction, 7/23/20: Due to the way the subscriber numbers were discussed on earnings, there were some nuance missed in terms of the breakdown. We’ve corrected this to be more accurate.

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Coronavirus could push consumers away from influencers and toward streaming TV

As the nation struggles with a pandemic and economic uncertainty, fundamental shifts in consumer habits are leading marketers to rethink existing strategies and budgets allocated to influencers and streaming TV.

These significant shifts are nothing new; just as the dot-com bubble reduced landline penetration and boosted mobile phone adoption, the last recession pushed traditional ad spend to digital. It was an option before, but the recession accelerated the trend to targeting select audiences on social media platforms, giving rise to influencers.

Today, social media influencers are so ubiquitous, they risk becoming meaningless.

Prior to the onset of coronavirus, we saw the influencer trend diminishing while the streaming TV trend became more prominent. Today, streaming is still trending up and influencers have actually seen increased levels of engagement, but they face credibility issues, which could lead to a reduction in perceived value to brands.

Streaming has similar, if not more, targeting capabilities as social media, but now it has the eyeballs — the captive audience of quarantined Americans — up 20% this March, according to Nielsen. Marketers on a tight budget will be forced to reevaluate their relationships with influencers as they seek to increase ad spend on streaming TV services.

The evolving realms of influencers

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Players Ntwrk launches celebrity gaming channel backed by WME, Daylight and Stratton Sclavos

Emerging from the smoldering wreckage of Echo Fox and Vision Venture Partners, the investor Stratton Sclavos is rising again to launch a new esports-related venture — a gaming-focused digital network also backed by the WME talent agency and Daylight Holdings.

Tapping Daylight and WME’s roster of talent, Sclavos has created Players Ntwrk, a new gaming-focused production company that will look to compete with other upstarts angling to tap into esports and competitive gaming’s newly dominant place in the entertainment firmament.

Players Ntwrk will feature original programming, unscripted series, celebrity gameplay and live events tapping talent from music, traditional pro-sports and the esports gaming world.

Sclavos and the multifaceted talent manager and president of Daylight Holdings, Ben Curtis, dreamed up Players Ntwrk as a way to tie together disparate groups of athletes and entertainers around their shared love of gaming and entertainment. The network will initially leverage relationships with WME and Klutch Sports Group, the agency founded by LeBron James’ longtime manager, Rich Paul, to find talent for programming.

The network will launch on Tuesday at 5:00 pm Pacific for two hours of gameplay featuring the New Orleans Pelicans Guard/Forward Josh Hart and Sacramento Kings point guard De’Aaron Fox on the Players Ntwrk Twitch channel. Additional live streams will be broadcast Friday and Saturday, the company said.

Over the next 12 weeks the network will add live programming featuring all of its “First Squad” talent and experimenting with different gaming and unscripted formats. Ultimately, the network will produce between 12 and 15 hours of original programming per week by the end of the second quarter and will ramp up to 20 to 24 hours of programming per-week by the end of the year.

Initial programming is going to be devoted to charity fundraising, with proceeds going to designated charities based on direct audience donations, the company said.

Players Ntwrk’s First Squad talent roster includes:

  • Professional athletes: De’Aaron Fox (Sacramento Kings), Josh Hart (New Orleans Pelicans), Jarvis Landry (Cleveland Browns) and Alvin Kamara (New Orleans Saints)
  • Music and Entertainment: PARTYNEXTDOOR, Murda Beatz, producer Boi-1da, actor/former athlete Donovan Carter (Ballers)
  • Creators/Streamers: KatGunn, Sodapoppin, Cash, Jesser, Jericho, Octane, Sigils, Sonii and DenkOps

Players Ntwrk joins companies like Venn, which are angling to gain a slice of the roughly 37.5 million monthly viewers that are expected to watch live streams on Twitch by the end of 2020, according to research done by eMarketer.

“The number of viewers and subscribers consuming gaming entertainment across YouTube and Twitch tops other entertainment services such as Netflix, HBO, Spotify and ESPN combined,” said Sclavos, in a statement. “Entertainment spectacle is trumping hardcore gaming competition. That kind of engagement makes it clear; gaming entertainment is the next pop culture phenomena. PLAYERS NTWRK is the only platform embracing and executing this new reality by creating original content with the most influential people who also happen to be fans themselves.”

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Disney blocks John Oliver’s new episode critical of India’s PM Modi

Hotstar, India’s largest on-demand video streaming service with more than 300 million users, has blocked the newest episode of HBO’s “Last Week Tonight with John Oliver” that was critical of Prime Minister Narendra Modi. The move has angered many of its customers ahead of Disney+’s launch in one of the world’s largest entertainment markets next month.

In the episode, aired hours before U.S. President Donald Trump’s visit to India, Oliver talked about some of the questionable policies enforced by the ruling government in India and recent protests against “controversial figure” Modi’s citizenship measures. The 19-minute news recap and commentary sourced its information from credible news outlets.

The episode is available to stream in India through HBO’s official channel on YouTube, where it has garnered more than 4 million views. Hotstar is the exclusive syndicating partner of HBO, Showtime and ABC in India.

Spokespeople of Star India, which operates Hotstar, and Disney, which owns the major Indian broadcasting network, did not respond to multiple requests for comment.

A spokesperson of the Information and Broadcasting Ministry, the governing agency which regulates information, broadcasts, movies and the press in India, said the government was not involved in any censorship discussions.

Numerous people in India began speculating on Monday whether Hotstar, which like Netflix and Amazon Prime Video self-censors some content, would stream the new episode at 6am on Tuesday, when it typically makes new episodes of Oliver’s show available on the platform.

It became quickly apparent on Tuesday that the Disney-owned platform, which has a knack of censoring numerous sensitive subjects, including sketches that make fun of its sponsors, was not going to risk upsetting the ruling party.

Last year, Amazon also removed from its streaming service in India an episode of the CBS show “Madam Secretary” in which references to Hindu nationalism and extremists were made. Netflix also pulled an episode in Saudi Arabia of Hasan Minhaj’s “Patriot Act” that criticized the kingdom’s crown prince.

Source: TechCrunch

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HBO Max investment hits AT&T’s revenue in Q4 to the tune of $1.2B

AT&T’s revenue took a hit in the fourth quarter as the company gears up for the launch of WarnerMedia’s new streaming service, HBO Max, due to arrive this May. The WarnerMedia division, which includes HBO as well as Turner and Warner Bros., saw revenue decline 3.3% to $8.92 billion — a drop that was in part attributed to WarnerMedia’s decision to not license shows and movies to other services in advance of HBO Max’s debut. The HBO Max investment, which includes these “foregone WarnerMedia content licensing revenues,” totaled $1.2 billion.

WarnerMedia also saw a 9.5% decline in fourth-quarter operating income to $2.4 billion, related to the HBO Max investment.

Among the shows which WarnerMedia decided to keep in-house ahead of HBO Max were Friends and Big Bang Theory, which in the past have been sold externally.

These impacts, along with the loss of subscribers to AT&T’s pay-TV business and other streaming services, also helped pull AT&T’s overall revenue down in Q4. The company reported total fourth-quarter revenue of $46.82 billion, down 2.4%, and profit of $2.39 billion (or 33 cents per share), down from $4.86 billion (or 66 cents per share) in the same period a year ago.

The company saw significant losses in streaming and its pay-TV business. It lost 945,000 pay-TV subscribers across DirecTV and U-Verse, as well as 219,000 subscribers for its over-the-top streaming service, AT&T TV Now. AT&T’s streaming service has lost subscribers throughout the year, noted The Hollywood Reporter, with a loss of 83,000 subscribers in Q1, 168,000 in Q2, and 195,000 in Q3. By the end of the year, AT&T TV Now ended up with 926,000 subscribers. That’s less than half the estimated subscriber numbers for Hulu’s live TV streaming service (not its VOD product).

On the pay-TV side, the company ended the year with 19.5 million customers, again following a stream of quarterly losses that peaked in Q3, when the businesses lost a combined 1.2 million subscribers.

On the earnings call, AT&T acknowledged that HBO Max would be “critical” to the company’s success going forward. WarnerMedia CEO and AT&T COO John Stankey said the service would be the “highest-quality premium SVOD [service] in the market with a great experience, better curation, and higher percentage of culturally relevant offerings than competing products.”

Stankey noted the company would have some “pretty aggressive promotions” for HBO Max at launch, including some wireless customers who will get it for free on some unlimited plans. It’s doing deals with potential distribution partners, including both digital platforms and pay-TV companies. And HBO’s over 10 million customers on AT&T’s existing distribution platforms will be offered access to HBO Max immediately at launch, to give it a fast start.

In the meantime, however, the HBO Max investment will continue to impact near-term revenues, AT&T warned.

“In the first part of the year, we expect pressure from heavy HBO Max investment, which you saw begin in the fourth quarter,” said AT&T Chief Financial Officer John Stephens. But the company remains hopeful that HBO Max will do well.

“In the second half of the year, you will see our momentum build…HBO Max will have launched leading to strong subscriber growth. The run rate benefits of our cost reduction plans will be clearly visible. And 5G combined with HBO Max will drive more upgrades and stronger wireless revenue growth later in the year,” Stephens added.

Of course, HBO Max’s success is not guaranteed. AT&T may be bundling the service and offering it to existing HBO customers, but it still needs to grow its subscriber base with new sign-ups. And this year, there’s a lot of new competition in streaming, thanks to the recent launches of Disney+ and Apple TV+ as well as the soon-to-arrive new services including NBCU’s Peacock and Quibi.

Source: TechCrunch