Why HBO Max Has Already Lost the International Streaming Race

Warner Bros. Discovery says it will merge HBO Max And Discovery+ has been incorporated into a platform that is commercially and technically viable. But the group looks like it will play catch-up in streaming markets outside the US for many years to come.

It’s a terrible mistake for a group that includes iconic pay-TV brand HBO, and has already begun rolling out its own direct-to-consumer service, HBO Max.

The situation is particularly dire in the wider Asia region, which is currently the world’s fastest growing streaming market, but where the new improved WBD-iteration of HBO Max will not be available for the next two years.

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Courtesy of Warner Bros. Discovery

“We plan to launch [HBO Max] The service is rolling out sequentially in the US next summer. Latin America will follow later in the year, European markets [currently] With HBO Max beginning ’24, with additional launches in major Asia Pacific regions and some new European markets coming later in 2024,” JB Perrett, CEO and Global Streaming and Games for Warner Bros. Call Thursday following the publication of the merged WBD’s second quarter financial results.

Admitting that the software on which HBO Max is built is not up to par, it’s disappointing. HBO Max has “performance and customer issues” but offers a richer set of features, Perret explained on the conference call. Discovery+, on the other hand, has more limited features but offers a more robust built-in delivery infrastructure.

Have mercy on consumers in the eight markets in Asia where the stop-gap HBO Go platform is currently available. He was told that HBO Max would represent a technological upgrade over what is currently being sold.

While the group’s technology issues will certainly be addressed, a waste of time and going out of the market can only be costly. There are at least two reasons for that.

First, global growth of SVOD is already slowing – some markets are already approaching saturation, while an impending recession will see more consumers reduce their discretionary spending and cut the number of video subs per home. can do

The rot has begun in Britain, Where the BARB survey published this week found a quarter-on-quarter decline of 2% Number of British households having any SVOD service.

Perette says the new WBD/HBO Max is intended to be good enough that it reduces churn. But by the time WBD Max does roll out in some parts, Apple TV+ and Amazon’s Prime Video will have plenty of time to fill geographic gaps in their existing service metrics, grow their content production studios, and create the “Lord of the Lord”. It’ll be time to get a subscription through blockbuster content like ” Rings: The Rings of Power” or “Ted Lasso” and “Severance.”

In fact, the WBD targets for the new service are very low. It aims to have 130 million global customers by 2025, up from the group’s 92 million currently. But that compares to the 2022 figures of 220 million for Netflix; Disney+ with 138 million (excluding Hulu and ESPN+); And the 65 million that Paramount+ quickly built up.

Equipped with Discovery+ technology, new insights into the balance between AVOD and SVOD, as well as a wealth of content (Discovery, HBO, Warner Bros. and a great bundle of TV brands covering news, kids and entertainment), everyone can think of it. The reason why WBD/HBO Max will come out swinging. One advantage of being late to the party may be that it has a smaller ramp to profitability than its first-mover rivals.

“The launch of new paid and free streaming platforms in 2024 allows the company to monetize immediately through major licensing deals and parts of growth in theatrical and branded pay channels,” says Vivek Kuto, consultancy Media Partners Asia. “This gives the new management time to plan execution and strategy on technology, content and localization as well as pricing and figure out what is their right to play in this area. The focus will be on trying to achieve scale and monetization in key markets such as Australia, Japan, India and parts of Greater Southeast Asia.

Analyst Claire Anders, founder of Anders Analysis, is more pessimistic still. “The streamer bubble has well and truly burst,” Anders says. “The fall in the Netflix share price has been a harbinger of all these events – people on Wall Street don’t believe it anymore.” Anders says there’s no other place in the top tier, which includes Netflix, Disney+, and Amazon Prime Video.

Anders says HBO will continue to do well as a brand thanks to its “Game of Thrones” spinoff, but not HBO Max. “It’s HBO that has a brand identity, not HBO Max,” Anders says. She sees the best prospects of HBO Max in North and Latin America. Europe is different and is a more penetrating pay-TV market, with 50% of viewers over the age of 42.

“They will keep open the possibility of launching in these other European markets. When they see they build a bigger audience on pay TV for ‘House of Dragons,’ for example, and other spinoffs, they’ll see that it has sustained the value,” Anders says.

Still, another cause for concern is that in the interim period before the new service’s rollout, WBD will actually help its competitors by taking off content.

It is already running.

Diversity Understands that large licensing deals in the Asia Pacific region are being split between local platforms and regional players Amazon and Netflix in Australia and Japan. In India, their output is being split between Prime Video and Disney+ Hotstar.

All eight “Harry Potter” movies will drop HBO Max on August 31st and can instead be found in the US already on Peacock. HBO Max quietly removes six Warner Bros. streaming exclusive movies And “Batgirl” movie removed In an effort to cut costs.

In Europe, HBO Max also runs the risk of alienating content suppliers. service in July Several commissions including “The Informer,” “Lust” and “Kamikaze” abruptly dropped the original. At a time when Netflix and Amazon are rolling out local production and fast-growing services like RTL+ have revealed expansion plans, HBO Max announces local first strategy Now it sounds very hollow.

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