HBO Max Has Yet to Entice Key Group: People Who Already Have HBO

(Bloomberg) -- AT&T Inc.’s HBO Max, the new streaming service packed with movies and TV shows, is free if you already subscribe to HBO. And yet, millions of existing customers haven’t bothered to get it.

The company announced Thursday that 4.1 million customers activated the HBO Max service within a month of its May launch. But that compares with at least 25 million HBO subscribers would could access HBO Max though a wholesale or retail channel.

HBO Max was created as a way for AT&T to retain HBO customers who were fleeing traditional pay-TV packages -- and compete with streaming services from Netflix Inc., Amazon.com Inc. and Walt Disney Co. But the subscription numbers show the company has a ways to go in marketing the platform.

It also means the original programming on HBO Max, such as the Anna Kendrick series “Love Life” and a new Looney Tunes series, aren’t finding as big an audience as they could.

“We still have work to do to educate and motivate” people who get traditional HBO through a pay-TV provider to use HBO Max, new AT&T Chief Executive Officer John Stankey said during an earnings call Thursday.

Subscribers who already get the old HBO channel can receive HBO Max at no extra charge and access far more programming, including classic movies and reruns of the sitcom “Friends.” The proposition is so strong, Stankey has called it “an IQ test.”

HBO Max launched May 27 at a price of $14.99 per month, the same price as regular HBO.

Stankey says HBO Max has been challenged by the shutdown in TV and film production caused by the pandemic. The service launched with six original shows and plans to have 21 by next month.

“In the streaming business, your content library is the key to keeping customers, but it’s the new originals that drive subscriber acquisition,” he said.

HBO Max also remains unavailable on the two largest connected-TV platforms, Roku and Amazon Fire TV. On the earnings call, Stankey said AT&T has “tried repeatedly” to make HBO Max available to customers using Fire devices, but Amazon has “taken an approach of treating HBO Max and its customers differently.” He didn’t mention Roku.

In total, HBO and HBO Max have 36.3 million customers, up from 34.6 million at the end of last year. HBO Max’s goal is to reach about 50 million U.S. subscribers in five years.

Stankey said HBO Max subscribers are watching 70% more hours a week on average than users of HBO Now, an older streaming service.

“Customer engagement has exceeded our expectations,” he said of HBO Max, citing its deep library and effort to broaden its appeal to more members of the family.

©2020 Bloomberg L.P.