Together, HBO Max and Peacock will shake up the streaming video industry in 2020 by virtue of the massive resources their parent companies (AT&T and Comcast, respectively) have to invest toward their success. Individually, they could have varying impacts on the SVOD and AVOD markets.
The goal posts are moved for HBO Max before it even gets in the game since it’s showing up with HBO’s subscriber head start and a proven entertainment brand. The service will have the unenviable task of taking on entrenched SVOD giants like Amazon Prime Video, Hulu and Netflix (and more recently, Disney+), all of which cost less than HBO Max. For AT&T, the service will be a success if it can reduce churn, attract a wider demographic and bolster the company’s wireless business through service bundling.
Peacock, on the other hand, is jumping into a still-nascent ad-supported streaming market. Magna predicted the U.S. OTT advertising market could total $5 billion in 2020, still just a small fraction of the overall total. So, Peacock doesn’t necessarily have to beat Hulu, CBS All Access, Pluto TV, Roku, Amazon, Tubi and others to be a successful AVOD. There’s plenty of runway for everyone.
“Ad-supported video on demand (AVOD) is a significant opportunity for advertisers in 2020. While we hear a lot about subscription video on demand (SVOD) services, Samsung Ads’ latest research on platform surfing shows more than 60% of streamers watch AVOD. That means cord-shavers, -cutters, and -nevers are more accessible than ever,” said Cathy Oh, global head of marketing and analytics at Samsung Ads, according to a SpotX survey.
Even still, Peacock will likely set itself apart from the pack with new original programming and high-profile live sports like the 2020 Summer Olympics in Tokyo. HBO Max, in the meantime, will need to grow the HBO subscriber base without alienating longtime fans of the network’s premium dramas and comedies.