Deeper Dive—Comcast’s feelings, HBO Go’s fate and other questions about HBO Max

HBO Max
There are lots of questions left to be answered before HBO Max launches in May 2020. (AT&T/WarnerMedia)

This week’s WarnerMedia Day revealed many key details about HBO Max’s price, release date and programming but it also left a lot of questions in its wake.

HBO Max will cost $14.99 per month when it launches in May 2020. It’s expected to have 50 million domestic subscribers and 75-90 million premium subscribers by year-end in 2025 across the U.S., Latin America and Europe. HBO Max will be free for about 10 million HBO subscribers on AT&T distribution platforms and HBO Now direct-billed users who subscribe directly through HBONow.com. AT&T customers on premium video, mobile and broadband services will be offered bundles with HBO Max included at no additional charge.

HBO Max will also have 69 originals on the service in the first year (31 HBO Max Original and 38 originals from HBO) along with a library of content from Warner Bros., New Line, DC, CNN, TNT, TBS, truTV, Turner Classic Movies, Cartoon Network, Adult Swim, Crunchyroll, Rooster Teeth and Looney Tunes along with some third-party licensed series and films.

Those are the basics but many details about the service – particularly ones relating to HBO’s legacy distribution – are still up in the air.

What will HBO Max mean for HBO’s distribution partners?

AT&T said it’s in active discussions with its distributor partners and hopes to offer their customers “seamless access” to HBO Max.

But Barclays analyst Kannan Venkateshwar said HBO Max’s identical pricing to HBO could earn some pushback from legacy MVPD distributors like Comcast and Charter.

“This price point implicitly incentivizes legacy subscribers to disconnect HBO and shift to this new service. In theory, this should be neutral for MVPDs if AT&T shares the same economics with legacy distributors on HBO Max as it does on HBO,” wrote Venkateshwar in a research note. “The complicating factor however is that HBO is typically an upsell to the highest end video bundles and by selling a competing product, AT&T effectively forces the most attractive subs at legacy MVPDs to trade down on pay TV in order to get a streaming service.”

It's likely that AT&T is working on an arrangement that will satisfy HBO’s legacy distribution partners. But as it stands now, with the prospect of HBO subscribers shifting over to AT&T platforms to get free access to HBO Max, pay TV providers can’t be happy.

What happens to HBO Go?

Alan Wolk, co-founder and lead analyst at TV[R]EV, astutely pointed out that WarnerMedia made no mention of HBO Go, its TV Everywhere app, during the event on Tuesday. He said it was a curious omission since Go has long been a welcome feature for HBO’s 38 million traditional subscribers.

“Now the logical thing to do would seem to be to update Go so that it had Max content. Or at least a lot of Max content. None of which seems like it would interfere with the relationship between the MVPDs and their HBO-loving customers,” wrote Wolk in a blog post.

Depending on what develops in terms of distribution deals between now and when HBO Max launches, HBO Go could become another sticking point for subscribers and distributors.

What happens to subscribers stuck in the middle?

WarnerMedia’s plan to give HBO Max for free to millions of AT&T customers seems generous, but it still leaves a lot of customers on the bubble. Like me, for instance.

I pay AT&T every month for my smartphone and wireless service, but I’m not currently one of the unlimited data plan subscribers that will qualify for free access to HBO Max. I pay Charter every month for a service package that includes internet, phone and TV (including HBO). So, I’m clearly not one of the premium AT&T pay TV or 1 Gbps broadband subscribers who will also qualify for free access to HBO Max either.

I’m reasonably certain I’m not the only one facing this quandary. Would it be worth it for me to upgrade my wireless plan to get HBO Max? Should I cancel HBO on Charter and sign up for it through HBO Now instead? Should I dump Charter all together and get AT&T TV and broadband? The only thing I know for sure at this point is that I will feel like a chump if I’m still paying $15 per month for HBO when I could be paying the same for HBO Max, a product with more than twice the content.

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