Why WarnerMedia still has so many HBO-branded streaming services: a study of a branding and distribution headache
This Future of TV Briefing covers the latest in streaming and TV for Digiday+ members and is distributed over email every Wednesday at 10 a.m. ET. More from the series →
TV or not, HBO’s efforts to expand from TV into streaming have ensnarled HBO Max’s debut, creating a dense cluster of HBO-branded streaming services that WarnerMedia is trying to untangle so it isn’t competing against itself in the streaming wars.
When WarnerMedia launched HBO Max on May 27, it marked the AT&T-owned media company’s third streaming service in the market to bear the TV network’s branding. There’s HBO Go, the streaming service for people who subscribe to HBO through a pay-TV provider. There’s HBO Now, the streaming service for people who do not subscribe to HBO via a pay-TV provider. And there’s HBO Max, the streaming service for people who do or do not subscribe to HBO through a pay-TV provider.
Soon-to-be AT&T CEO John Stankey can joke that the decision of whether to subscribe to HBO Now or HBO Max is an “IQ test.” But it doesn’t take a Mensa membership to see that WarnerMedia does not need three separate HBO-branded streamers. In fact, WarnerMedia is phasing out HBO Go and will move those subscribers to HBO Max and it will rename HBO Now to HBO. Still, that’s one app too many, considering HBO Max offers more programming for the same price as the other namesakes.
“We often see certain changes like this when one service is being replaced by another and you have to delicately migrate customers from one to the next. So my sense is they’ve always had a plan and a roadmap to sunset HBO Go and introduce HBO Max,” said Jake Hancock, partner at brand consultancy Lippincott.
Problem is, WarnerMedia did not set out on this road with a fresh set of tires. Unlike Disney and NBCUniversal, which have rolled out all-new streaming properties in Disney+ and Peacock, WarnerMedia opted to build its flagship streaming service on top of its existing TV-and-streaming footprint. The move to make HBO Max available to HBO’s TV subscribers and HBO Now subscribers was meant to give HBO Max a head start, but it created a branding headache. Here’s a timeline to help clarify:
- In February 2010, HBO introduces HBO Go to wade into the nascent streaming market while tethered to traditional TV.
- In April 2015, HBO debuts HBO Now, a separate streamer to cater to cord cutters without compromising its pay-TV carriage deals.
- HBO strikes deals with other companies like Apple and Amazon to sell HBO Now subscriptions to quickly accrue more subscribers.
- Following AT&T’s acquisition of Time Warner, the newly formed WarnerMedia announces HBO Max, its foray into the streaming wars that will rely on HBO’s brand recognition to help it compete.
- To compete in the streaming wars, WarnerMedia sets out to get pay-TV providers to make HBO Max available at no extra charge to their existing HBO subscribers, i.e. the people with access to HBO Go.
Looking back, many of these moves still make sense. Seemingly every other major TV network has their version of HBO Go. Any TV network looking to make a direct-to-consumer play has had to create a separate streaming service — AMC Networks’ Shudder, ESPN’s ESPN+ and NBCU’s Peacock. WarnerMedia has even succeeded in getting pay-TV providers, including Comcast, to distribute HBO Max, which appeared to be one of the service’s biggest early roadblocks.
But, before HBO Max can emerge as WarnerMedia’s singular streamer, the media company needs to deal with HBO Now’s tangled distribution strategy. Selling HBO Now subscriptions through third parties like Amazon and Roku may have helped to acquire subscribers, but it appears to hampering the company’s attempt to convert those subscribers into HBO Max users.
Ahead of HBO Max’s launch, WarnerMedia had said only people who subscribe to HBO Now directly through WarnerMedia have access to HBO Max. But it has been expanding the option to indirect subscribers. People who purchased HBO Now subscriptions through Apple have access to HBO Max.
However, those who have purchased through Amazon and Roku do not yet have access to HBO Max. WarnerMedia has yet to sign a deal with either company to distribute HBO Max on their respective connected TV platforms. That appears to be foiling any effort by WarnerMedia to finally consolidate its full array of HBO streaming properties into HBO Max once and for all.
Until WarnerMedia is able to sort out distribution with Amazon and Roku, the branding headache will persist. You can already imagine the confusion even after the culling of HBO Go. So if people get HBO through their pay-TV provider, they should use the HBO Max, not the HBO app? Because the HBO app is for people who don’t get HBO the TV network? Yes, exactly.
“The more diverse parts of companies are the bottom of the rung. We’re the one who create the content and create the product. But the biggest problem is the lack of diversity at the top. They are the ones profiting most directly off of black culture, and a lot of them haven’t done the work to try to educate themselves on racism. That’s the problem.”— Black media employee on industry’s diversity issue
Stay tuned: Production restarts then stops?
TV and movie production in Los Angeles was allowed to resume starting last Friday. However, soon the situation could reverse as the rate of coronavirus cases in L.A. County has remained high and has put the county on California’s watch list.
The potential that a second wave would push governments to reinstitute shelter-at-home orders has already put producers on edge about returning to work. At least some producers have been planning to ease back into projects with five- to 10-person crews at first and then expand from there.
“It would be premature to think everything would go back to normal overnight. This will be a months-long process,” said one producer.
Even if California does force Hollywood to go back on hiatus, producers could take their shows on the road to states like Florida that has been more lax with their restrictions, but has also lately seen an uptick in cases. But doing so could put their crews at risk and contribute to a resurgence of the virus.
“I would never stand up a shoot in Florida. I grew up in Florida. Even if it was completely open for business, it would be irresponsible to do that right now,” said the producer.
Numbers don’t lie
$100 million: How much money YouTube will spend to support Black creators.
35 million: Number of people who have watched Will Smith’s Snapchat show “Will From Home,” according to the platform.
14%: Share of national TV ad dollars spent in 2020 that will go to digital extensions like Hulu and Roku, according to GroupM.
10%: Increase in the money that advertisers will spend on digital video this year, according to Magna.
Quibi watch: Trouble at the top
Another week, another damning story about Quibi.
Quibi founder Jeffrey Katzenberg and CEO Meg Whitman have had a rocky relationship that led Whitman to present Katzenberg with a list of problems in May 2018, according to The Wall Street Journal. Their relationship has repaired enough, though, that Whitman was able to convince Katzenberg not to name the app “Omakase.” But it may be headed for the rocks again with Quibi on pace to fall well short of its first-year subscriber projections.
For those trying to keep track, here is the litany of other issues that have dogged Quibi’s debut:
- Less than two months after launch, Quibi decided not to renew some shows, discussed changing others and canceled series that had yet to be produced, according to Bloomberg.
- Quibi’s brand-centric advertising strategy did not stir up enough interest in its programming, and its head of brand and content marketing Megan Imbres left the company a few weeks after its launch.
- Quibi’s roster of “Daily Essentials” shows have proven to be “not that essential,” in Katzenberg’s words.
- Unimpressed with Quibi’s viewership so far, advertisers have asked to defer their payments to the company, according to The Wall Street Journal.
And yet coronavirus is claimed, by Katzenberg, to be the real reason for the service’s struggles.
What we’ve covered
Splitting TV’s upfront market in two is not so clean-cut:
- The Association of National Advertisers has called for the TV upfront to move to a calendar-year model.
- However, some advertisers are sticking to the traditional broadcast buying period, which may make a mess of the upfront market.
Read more about the TV upfront here.
Snap gives its original shows a boost:
- Snap has unveiled a slate of new and returning shows, including its first series that incorporate its augmented reality technology.
- Snap has also begun backfilling shows with Snap Ads, which has helped to increase show makers’ ad revenue.
Read more about Snap here.
TV networks try to use weak ad market to settle delivery debts:
- With lower advertiser demand and more inventory available, TV networks have an opportunity to make up for ads that failed to reach enough viewers.
- However, getting advertisers to agree to make-goods right now can be a negotiation.
Read more about TV networks here.
How Vox Media developed new programming remotely:
- In the latest episode of Digiday’s The New Normal, Vox Media’s Chad Mumm explained how the company has adapted to remote production.
- He also explained how “Explained” came to be on Netflix.
Read (and see and hear) more about Vox Media here.
What we’re watching: Dave Chappelle’s “8:46” on YouTube
What we’re reading
Black producers call for more diversity in entertainment industry:
The leadership ranks in entertainment, like seemingly every other industry, has failed to adequately represent the diversity of its workforce, not to mention its audience. The Wall Street Journal spoke with Black producers about what needs to change in the entertainment industry, starting with putting more Black people in decision-making positions.
Disney’s internal streaming war:
Disney is having a hard time bringing Hulu’s engineers into its larger tech team, according to The Information. The issue could complicate Disney’s ability to put all of its streaming services — Disney+, ESPN+ and Hulu — onto the same streaming platform, which would make it easier for Disney to manage those properties.
More in Future of TV
Future of TV Briefing: How programmatic became a bigger part of the TV and streaming ad business in 2023
This week’s Future of TV Briefing looks at how this year’s upfront and recent announcements from AMC Networks and Paramount indicate the progression of programmatic in the TV and streaming ad market.
This week’s Future of TV Briefing looks at how major streaming service owners’ subscription business fared in the third quarter of 2023.
This week’s Future of TV Briefing looks at what TV and streaming companies’ latest quarterly earnings reports indicate about the state of the TV advertising market.