In some ways, the timing couldn’t have been more fortuitous. No one roots for a pandemic, but WarnerMedia launched HBO Max just as cities and states across the U.S. went under curfews and lockdowns as the COVID-19 pandemic spread.
In many ways, the service seemed well positioned, even in a sector crowded with platforms such as Netflix, Hulu, Amazon Prime Video and Disney+. HBO Max brought decades of critically acclaimed series under its belt, including “The Sopranos,” “The Wire,” and “Game of Thrones,” coupled with pricey acquisitions like the “Friends” and “South Park” back catalogues.
Filling out the offering was a healthy catalogue of 1,300 films and television series from CNN, TNT, TBS, truTV, Cartoon Network and Adult Swim, among others. WarnerMedia, meanwhile, provided access to perennial favorite Looney Tunes shorts and the complete catalogue of DC Comics films and televisions shows. All told, HBO Max promised 10,000 hours of movies and TV at launch.
But if Quibi’s eight-month lifespan is any indication, all the money, star power and executive bonafides can’t buy you a successful streaming service. Over the last few years, many big names had tried and failed at that game — the streaming graveyard is littered with good intentions and big-budget flameouts.
HBO Max’s start wasn’t all smooth either — the service was delayed, there was some executive shuffling prior to launch, and it had issues striking deals with platforms like Roku and Amazon. Ultimately, however, the service was able to right the ship.
By October, the service hit 38 million subscribers, which includes HBO subscribers who have access to the streaming platform as part of their cable deal. This July, Warner announced that HBO and HBO Max had reached a combined 67.5 million subscribers (including 47 million in the U.S.) and aimed to hit between 70 million and 73 million by the end of 2021.
The numbers are, of course, somewhat obfuscated by the nature of the platform’s relationship with HBO. Ultimately, WarnerMedia likely understands that HBO Max’s figures don’t compare favorably to Netflix’s 209 million global subscribers (66 million in the U.S.), but Netflix unquestionably benefits from its 13-year head start and robust international expansion.
Almost exactly a year before launch, the aforementioned executive shuffling moved Otter Media (acquired in 2018) from Warner Bros. to WarnerMedia Entertainment. Otter CEO Tony Goncalves and COO Andy Forssell moved along with the brand to oversee the HBO Max launch.
Forssell, who serves as HBO Max’s head of business operations in addition to his EVP/GM WarnerMedia position, joined us on TechCrunch Disrupt 2021 this week to discuss the fascinating 17.5 months of the service’s life so far.
Forssell concedes that the pandemic provided extremely unique challenges. “The early impacts were all negative, though, I think we, along with everyone in the industry, learned to roll with them,” he said. “Everybody had to work from home. That was tough, though I think we made the transition better than everyone thought. We were at launch mode at that point.”
The pandemic changed how users consumed their media and how studios released it. In 2019, it might have seemed impossible that films would hit streaming platforms on the day of release, but that model became a necessity for the industry as the pandemic wore on and theaters remained closed.
“We have day and date theatrical films. Obviously that’s an exception for this year, but nevertheless in 2022, you’re going to see [release] windows shorter than they ever would have been if we hadn’t had the pandemic. I think it did move experimentation forward, because we all had to experiment. Almost all of that experimentation is good for viewers. It did move us a couple of years ahead in terms of people having to get comfortable with change more quickly,” Forssell said.
It’s clearly been a boon for streaming services. On Christmas Day, “Wonder Woman 1984” was released simultaneously in theaters and on HBO Max. Since then, the service has seen roughly one film a month debut in the same way, including “Godzilla vs. Kong,” “Judas and the Black Messiah,” “Mortal Kombat,” and “Space Jam: A New Legacy.” “Dune” and “The Matrix Resurrections” are set to debut later this year.
Forssell believes the pandemic will play a key role in transforming how studios view releases. “I do think it will begin to co-exist. I’m very hopeful that you can still have the feel of that big film and still have multiple ways to watch it. Viewers get to decide. They play with their clicks and tickets. I think theaters will thrive, but options like SVOD (streaming video on demand) will thrive along with them. And the consumer gets to decide in the next 10 years how that evolves.”
Not everyone is thrilled with the arrangement, however. In July, actor Scarlett Johansson sued Disney over the release of “Black Widow” on streaming platforms. “[I]gnoring the contracts of the artists responsible for the success of its films in furtherance of this short-sighted strategy violates their rights and we look forward to proving as much in court,” her attorney told TechCrunch at the time. “This will surely not be the last case where Hollywood talent stands up to Disney and makes it clear that, whatever the company may pretend, it has a legal obligation to honor its contracts.”
Closer to home, Sopranos creator David Chase told Deadline that he was “extremely angry” with the streaming debut of the long-awaited prequel, “The Many Saints of Newark,” adding, “I don’t think, frankly, that I would’ve taken the job if I knew it was going to be a day-and-date release. I think it’s awful.”
“David has every right to be angry or not angry,” says Forssell. “I think some of that, as I understand it, was when we made our initial round of announcements. Change was happening in the industry and everyone naturally resisted that a bit and understandably worried about what that means [ … ] But I’m not close to that and don’t know. David’s earned every right to have an opinion that he wants to have and we’ll continue to work with him.”
Other issues have cropped up for the still-young streaming service. Earlier this month, the company shut off HBO access through Amazon’s Prime Video Channels, offering a limited time 50% deal to entice users to make the jump to Max. Forssell says the decision was taken due to how much access HBO has to its own viewer metrics.
“We get to see in real time whether we’re serving [customers] well or not and react quickly. That’s the dynamic we have,” the executive explains. “I think It’s good for everybody. For us to participate in a model like Prime Video Channels, we can’t do it, because we lose that visibility. It’s in their app; we don’t see what people are watching. They give us some data, but it’s at a significant delay.”
Another third-party distribution platform has also proven something of a thorn in HBO Max’s side of late: There have been complaints of widespread issues with the glitchy Roku app.
“We bought a company called You.i about a year ago, because we realized we needed some help with expanding our capabilities, especially as we go global,” explains Forssell. “The new Roku app is fantastic. It works wildly better than the old one. It’s the start of using that new technology. PlayStation will roll out today, and probably by the end of January we will have replaced every app on all of our connected TV devices. You’re going to see most of this technology replaced with completely new technology that we’ve been working on for the last year. The new Roku app is fantastic, with very few crashes. It’s on us to get that done and you’ll see us being aggressive.”
