Now that WarnerMedia has dropped details on its standalone subscription video-on-demand streamer HBO Max, which launches in the spring of 2020, the arsenal on each front of the forthcoming streaming service battle is coming into view.
HBO Max’s promised library points to a solid offense that notably includes exclusive licensing of all 10 seasons of “Friends” (likely the original-run versions, not syndicated) and the CW roster of shows. That initially appears to be a blow to Netflix, the dominant force in the streaming wars.
But a closer look at the details of existing licensing agreements indicate that where things settle is a bit more nuanced.
In addition to the loss of “Friends” to HBO Max at the beginning of 2020, Netflix is also losing “The Office” to NBCUniversal’s upcoming streaming service at the end of 2020. Third-party ratings reports point to both shows being the most popular on the streaming platform, which famously does not like to part with its data.
However, Netflix will still notably be able to wield the power of “Friends” on its service in some international territories outside of the U.S.
Even though “Friends” went off the air 15 years ago, it remains an incredibly popular show both in the U.S. and abroad. If the series is indeed the second most-watched show on the Netflix, as Nielsen indicates, then that marks a win for the streamer, whose international subscriber growth potential is a bright spot amid slowing U.S. gains.
Piper Jaffray analyst Michael Olson, who says Neflix’s third-quarter content slate is strong, projects that its international subscribers could outnumber domestic subs by a nearly two-to-one ratio, an estimated 129 million to 67 million, by next year.
It is not yet clear what WarnerMedia’s international plans are for HBO Max, which is thus far a domestic service. The company is hosting an event in the fall where it will announce more details of the service.
HBO Max Won’t Be Able to Reel in All CW Shows Yet
HBO Max is slated be the exclusive streaming home of the forthcoming Warner Bros.-produced CW shows “Batwoman” and “Katy Keene,” bringing prior seasons of the show to the service 30 days before the linear premiere of the next season on the CW. That means that the first season of “Batwoman,” which debuts this October, will not be available on HBO Max until September 2020.
But Netflix will continue to run new seasons of CW shows that premiered during the 2018-2019 TV season, not to mention house them for several years after their original run, per the joint output deal that ended this year. For example, viewers can expect “Supernatural,” which airs its final season this fall, to remain on Netflix for a handful of years after the series finale is broadcast.
And that means shows that do not yet have a foreseeable endpoint, like “Riverdale,” “Flash” and “Dynasty,” may be on Netflix for many, many years to come.
No word yet on which streamer CBS TV Studios-produced “Nancy Drew” will land after it airs on the CW.
Accio “Harry Potter” Movie Series
Lastly, BTIG analyst Rich Greenfield noted that the Warner Bros. mega film franchise was missing from an HBO Max teaser video, since NBCUniversal licensed “Harry Potter” from the studio through 2025, for use on broadcast and cable.
“Not only did media companies all wait far too long to enter the (direct-to-consumer) business… their long-term licensing decisions have made it challenging to pivot quickly to DTC,” he wrote Wednesday.
But HBO Max Is Just A Dollar or Two More Than HBO
There’s still plenty of upside to HBO Max, of course, which boasts a hefty content slate. The streamer has an expected monthly price tag of $16-$17, according to the Wall Street Journal. That’s significantly higher than Disney Plus’ announced price and Netflix’s current price, even after the most recent subscription price hike.
But compared to the $15 price tag of HBO alone, it starts to sound like a pretty good deal — and Greenfield expects at least half of HBO customers to upgrade.
“When we hear people say HBO Max is a crazy strategy at $16-$17/month vs. Disney at $6.99/month or Netflix at $12.99, it is critical to remember that HBO has grown its domestic sub base from 30 million to 38 million domestically over the past four years at $15/month,” said Greenfield in his research note. “We believe at least 50% of their subscriber base will likely upgrade to HBO Max for an incremental $1-$2/month, implying nearly 19 million subscribers – let’s round it to 20 million subs.”
His concern, however, is that the resulting $240 million in expected revenue will do little to offset the likely enormous investment WarnerMedia is putting into the streamer.
With Disney Plus landing in November, Quibi’s April 2020 launch, and NBCUniversal’s service on the horizon in 2021, there will be ample competition for HBO Max ahead.