Well-known industry analyst Alan Wolk is publishing his popular Week In Review columns first on FierceVideo every Friday. This means that FierceVideo readers are the first to get all Wolk's insights as they navigate the fast-moving television business.
1. Ready or not, HBO Max launches next week
HBO Max, the long-awaited Flix from AT&T is due to launch on Wednesday, though there are still numerous open questions about the service that may be answered over the next four days.
Why it matters
While the basic idea behind Max is solid, a pandemic that’s caused massive unemployment is probably not the best time to launch the most expensive Flix to date ($15/month). Especially when many of your competitors are half that price or less, and when most of the original programming you were going to launch with is still in production with “TBD” as a completion date because of Covid-19.
On a more practical level, there’s the fact that the only way the over 35 million people who currently subscribe to HBO via their MVPD will be able to access Max is if their MVPD strikes a deal with AT&T.
And right now, that list does not include Comcast and Dish, two of the largest MVPDs in the U.S.
That same issue affects viewers who signed up via Roku and Amazon—unless a deal is struck, they may be limited to HBO Now content only.
Which means both sets of subs will need to drop their current HBO/HBO Now subscription and then go online, download Max and sign up for it, a convoluted process that is sure to annoy TF out of most of them precisely because it seems so illogical and reminiscent of the not too distant past when consumers were at the bottom of cable companies lists of “things we care about.”
Then there’s the bigger, more meta question: will they even bother? As in will people who subscribe to HBO to see HBO series like “Westworld” and “Curb Your Enthusiasm” care that they can’t (eventually) watch the more mainstream shows that Max is putting out or are they happy with their current HBO service?
Not having access to the new app’s movie catalog might be enough to put them over the edge though—Max will have over 1,300 feature films including the entire Harry Potter franchise
Which leads to the next meta question: will those 1,300 feature films plus 10,000 hours of content (mostly reruns) be enough to convince people who are not currently paying $15/month for HBO to subscribe to Max?
Especially when there are seven other lower-priced services, six of which have similarly capacious programming catalogs. (Apple being the exception.)
It’s going to be a tough sell given that HBO has been around long enough for people to have made up their minds as to whether they thought it was something they wanted and it seems unlikely that access to Harry Potter movies and lots of reruns is going to push them to subscribe now.
There’s a real danger too that the launch of Max may remind many of those current HBO subscribers that they are still paying $15/month for something they no longer watch because there’s no new programming and they’ve caught up on everything they were intending to watch.
So, don’t be surprised to see a wave of cancellations as well.
What you need to do about it
If you’re AT&T you need to sell Max hard and give people a reason to spend $15/month on something that is going to seem like a parity product to services costing half as much.
If you’re writing about the streaming wars, remember that Max is going to launch with a sizable chunk of customers from the MVPDs who have deals in place with AT&T and from all those people who currently subscribe to HBO Now directly.
If you’re a “Friends” fan, remember that your reunion is on hold. It was “Parks and Recreation” that filmed a pandemic-themed reunion episode.
2. Roku scores again
Roku had another great quarter, as both viewership and ad revenue shot up.
Why it matters
As I’ve noted, much of Wall Street does not understand Roku and its ad-based business model.
In a nutshell, Roku has something called The Roku Channel, a FAST (free ad-supported streaming TV service) that has tens of thousands of hours worth of library content (reruns) organized into linear-channel-esque streams. It also gives viewers the ability to subscribe to a range of subscription services, many of which are ad-supported. Roku then sells the ad space for those channels, allowing advertisers to target specific audience segments.
So while ad budgets have been slashed overall, advertisers have been shifting budget to CTV players like Roku because of their ability to geotarget ads and because the numbers for streaming viewing have been going up much more rapidly than linear during the pandemic. (But mostly because of the former, and because the ads still run on high quality TV shows, not random YouTube channels.)
The only caveat here is Amazon: while Roku has been doing everything right and then some, Amazon still has far more data about viewers and their purchase habits than anyone in the known universe. They have been slow to mobilize IMDb TV, their own FAST, or to create any sort of buzz around it with consumers and/or advertisers. That’s allowed Roku to get a sizable head start and to shape the market.
While Amazon seems to have been more focused on its Channels initiative, pushing that rather than IMDb TV, they are still the 800-pound gorilla in the room and should they put some muscle behind IMDb TV, they can cause Roku all types of grief.
What you need to do about it
If you’re Amazon, get your act together. IMDb TV should be the proverbial “low hanging fruit” and you are allowing it to ripen and rot on the vine (to further mangle the metaphor.)
If you’re Roku, you still have an advantage by dint of your head start and your far superior interface. Don’t give that up, especially the interface part. Amazon’s is still something of a mess, but interfaces are easily adjusted.
If you’re an advertiser, remember that CTV is a great way to geotarget ads to audiences when you need to do so thanks to shifting lockdown rules. That, and people still think of it as “TV” so you’re still getting that premium vibe.