• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Technology

Don't Count on HBO Max to See a Reception Like Disney+'s

Though possessing a good content library, HBO Max's pricing and device support work against it, as do a couple other things.
By ERIC JHONSA
May 30, 2020 | 08:00 AM EDT
Stocks quotes in this article: T, CMCSA, VZ, NFLX, DIS, AMZN, ROKU

AT&T's (T) HBO Max service has a pretty solid content library, and should help lower churn rates among existing HBO subs. But for a few different reasons, it probably won't create a massive number of brand-new HBO subs in the near-term.

HBO Max, which launched in the U.S. on Wednesday, costs $14.99 per month and provides all of the content delivered by HBO's two existing streaming services -- HBO Go, which is bundled with HBO pay-TV subscriptions, and the standalone HBO Now service -- plus a host of other content. HBO Now users automatically have access to Max, as do consumers subscribing to HBO via pay-TV providers such as AT&T, Comcast (CMCSA) , Cox and Verizon (VZ) . Some AT&T mobile and Internet subs are also getting the service for no extra charge.

Hit HBO series' such as Game of Thrones and The Sopranos are covered by Max, as are (among other things) the Harry Potter movies, TV shows such as Friends and The Big Bang Theory, DC Comics movies, Cartoon Network shows, many classic films and a handful of HBO Max-only originals.

Though this is a very subjective thing, I think (after signing up for a free trial and browsing its library) HBO Max might have the best movie collection of any U.S. streaming service, with a very good mixture of recent hits and quality classic and indie/niche movies. And while its TV show/original series library can't match Netflix (NFLX) and Disney's (DIS) Hulu in terms of breadth, there's still a lot of quality material, particularly for fans of HBO originals.

The user interface isn't anything special right now -- among other things, it could stand to add trailers -- but is by no means awful. And like Disney's Disney+ service, HBO Max does a decent job of curating content based on both source (HBO, DC, Cartoon Network, etc.) and genre (action, drama, kids content, etc.).

For these reasons, someone who was already a satisfied HBO subscriber (whether via pay-TV or HBO Now) might now be an even more satisfied HBO sub, something that in turn could give HBO additional long-term pricing power. And perhaps some of the HBO subs who were previously on the fence about keeping their subscriptions might become less inclined to cancel following Max's launch.

But among U.S. consumers who weren't previously inclined to subscribe to one of HBO's services, HBO Max might only see moderate traction in the coming months.

First, as many others have pointed out, HBO Max doesn't currently work on Amazon.com's (AMZN) Fire TV platform, which has more than 40 million global active users, or on Roku's (ROKU) platform, which had 39.8 million active accounts at the end of March. The hold-ups appear to be about Roku and Amazon's cuts on sign-ups taking plans on their respective platforms, and about HBO Max's inclusion within Roku and Amazon's channel store apps. Regardless, until deals are inked, a lack of support for the two most popular living room streaming platforms will both affect new sign-ups and how much existing HBO subs engage with Max.

Then there's the matter of pricing. From AT&T/WarnerMedia's perspective, HBO Max's $15-per-month price probably looks aggressive, given that HBO Now has long cost that much. But from the perspective of a consumer who wasn't previously sold on signing up for an HBO service, things might look different.

HBO Max is costlier than Netflix's popular, $12.99-per-month, Standard plan, as well as Amazon Prime, which costs $119 per year and comes with a lot more than just a video streaming service. And it costs more than twice as much as Disney+, which sells for $6.99 per month and $69.99 per year.

At a time when Netflix and Amazon Prime both claim very strong customer loyalty and are believe to have 50%-plus U.S. household penetration rates, convincing Netflix/Prime households to pay a premium to get another streaming service will often be a tough sell. Disney understood this when it chose to give Disney+ a dirt-cheap launch price. And with Disney+ having racked up 54.5 million global subs (many of them in the U.S.) as of May 4, its adoption is another headwind for HBO Max's subscriber growth.

Throw in HBO Max's current lack of international availability and 4K streaming support, and how WarnerMedia's decision to simultaneously run three  HBO-branded streaming services could confuse some consumers, and it's probably best to keep 2020 subscriber growth expectations for the service in check.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
TAGS: Investing | Technology

More from Technology

Bearish Bets: 3 Stocks You Should Consider Shorting This Week

Bob Lang
Jul 3, 2022 10:30 AM EDT

These recently downgraded names are displaying both quantitative and technical deterioration.

The Charts Point to More Selling Ahead for 4 Former Tech Leaders

Ed Ponsi
Jul 1, 2022 10:00 AM EDT

Keep in mind that no matter how much a stock has fallen, it can always go lower, and it appears these four stocks could prove that point.

Want to Save Your Retirement Fund? Tune Out the Talking Heads

Jim Collins
Jun 30, 2022 3:14 PM EDT

The first half of this year has been ugly. But we could have seen what would happen to Netflix, Tesla and Meta...

Is Pinterest's CEO Change Good News? It Depends on How You Look at It

Eric Jhonsa
Jun 30, 2022 2:30 PM EDT

Plus, why a report about an Apple 5G modem setback sounds believable.

Barring a Major Recession, Some Chip Stocks Look Very Cheap Right Now

Eric Jhonsa
Jun 30, 2022 11:45 AM EDT

Many quality chip stocks now seem to be pricing in a massive downturn, rather than just a typical down-cycle.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 07:34 AM EDT PAUL PRICE

    A $525,000 Vote of Confidence on Macerich (MAC)

  • 09:49 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Stop Wishing, Hoping, and Praying and Take Control...
  • 07:59 PM EDT PAUL PRICE

    Very Good Quarterly Numbers From Bassett Furniture (BSET)

    Bassett Furniture blew right through analysts es...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login