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HBO Max Executive Talks Godzilla vs Kong’s Big Win, Piracy, and The Future

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HBO Max is officially one year old, and let’s just say the last 365 days haven’t always been easy.

WarnerMedia’s streaming service has seen highs and lows. Deciding to release new movies on HBO Max the same day they’re in theaters helped bring new subscribers to the streaming platform that was failing to grow as fast as executives may have wanted. At the same time, however, those moves made Hollywood A-listers angry, and WarnerMedia reportedly had to spend $200 million in backend deals to make up for it.

Now, HBO Max is entering a new period of uncertainty. WarnerMedia is being spun off from AT&T and merging with Discovery. There’s room for both concerns and optimism. Mergers and acquisitions don’t always work; in fact, they fail more often than not. But when they work, they can build an even better, more popular product. Weaknesses in one area become strengths, and new teams are formed to create something people can’t live without.

As WarnerMedia executives start to figure out what the next few years look like — and what that means under a new company banner with thousands more television episodes and specials — IGN sat down with Brad Wilson, WarnerMedia’s executive vice president of growth and revenue, to chat about some key points.

IGN: I would like to start it off by lobbing you a bit of an easy one — one year in with HBO Max, what has been the biggest surprise that you have kind of seen, one that you were not expecting at all when you guys first launched?

Brad Wilson: It’s the team and the passion for the mission behind it. I was really surprised at the infrastructure setup for the streaming service. You know, not just the kind of reporting aspects of it, but also how we serve customers around life cycle marketing and all the signals we collected on viewership. And that was quite good. But I underestimated “inside the building.” And just how passionate people were for the stories that we get to tell and the camaraderie in which we rally around … every day to serve our customers.

IGN: Around the idea of customers, [WarnerMedia CEO] Jason Kilar has said time and time again that day-of movies are bringing in a lot of new subscribers. Is the expectation that every new DC movie, or every new Godzilla, will bring in substantially more subscribers? Or do you see an overlap? Once these customers come in for a certain movie, they’re staying, and that’s good too?

Wilson: Specific to the Warner Bros. premieres that come in on the exact same days as theatrical [releases], we’ve been thrilled.

Number one, I mean, as you mentioned, there’s been quite big, new customer acquisition demand generated from those things, but also they’re quite nice retention vehicles. I once heard a quote that said, movies bring them in and series keep them because you know, they’re here for six, eight, 10 episodes. But what we found with the movies is they’re [like a series], so there’s serialized watching for when people come in.

It all started with Wonder Woman 1984, but even in January, with The Little Things and then Tom & Jerry thereafter, we see people connect into the next movie and the next movie thereafter. We’ve enjoyed a great retention benefit as a result of that.

The other dynamic to your point is, as we’ve seen people come in for the titles — I use Wonder Woman 1984 because that was certainly a seminal event — those same people watched The Flight Attendant with great fervor quickly thereafter. The Flight Attendant was in our top 10 assets — every single episode in the month of January. The series ended the year before in November. We’re seeing crossover into series and we’re also seeing serialization into the next movie.

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IGN: You’ve seen pretty a big increase in engagement for HBO Max compared to HBO NOW, which makes a lot of sense when you look at the amount of content that is available. Are there any surprises that you’re seeing there? For example, anecdotally, one of the conversations I always have with friends who have kids is about Disney+ being an obvious purchase, and they’re happy with it. And then they got HBO Max for themselves as HBO fans, and it’s, “Oh, I forgot there’s Cartoon Network and Sesame Street!” So they have that for their kids. Are there any overlapping trends, where people were jumping between different content that you may not have predicted?

Wilson: Mortal Kombat was an interesting title for us, because I will say that while we expected it to do well, we did not expect it to do as well as it did. It’s been one of our top assets on the platform. And those customers are now crossing over into watching all the other great titles that we typically see, but also some of the great library content that we have with Friends, The Big Bang Theory, The Sopranos, etc.

IGN: When you’re looking at how well something like Mortal Kombat performs, how does that impact conversations you might have with the content licensing and acquisitions teams? When you’re looking at these kinds of figures, how does that impact how you’re thinking about future IP and actively developing more of that specifically for Max?

Wilson: We believe that we’re here to share and tell stories and create meaningful, enduring connections. That is a lens by which we start. Do we use that data to inform future programming decisions? The answer is yes. We partner very frequently with Meredith Gertler (manager of content strategy and planning at HBO Max) and her team to talk through what that looks like from all the lanes — kids and family to young adult to scripted and unscripted. These are early days. We’re all sort of figuring out the art and science that we lead against. But we’re also trying not to deviate from a formula that we know it’s been really successful with all original programming in the past.

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IGN: You brought it up, so I have to ask. When I think of HBO Max, I think premium. Now WarnerMedia is joining forces with Discovery. You look at Discovery, and it’s unscripted. It’s complementary to HBO. How do you look at all of it and think about it in terms of HBO Max?

Wilson: I’m supposed to give you the, “It’s too early to tell” comment. But look, I’ll say a couple things really quickly because I do think they are worth noting,

Provided that world comes together, I think you’re exactly right. When you look at all the assets they have from a nonfiction, unscripted perspective, and what we bring to bear from a scripted and higher quality or premium storytelling, that’s really, really exciting. It makes a ton of sense. The other part of this worth mentioning — I know no one likes to talk about it, but AT&T has supported us quite nicely up and through where we’re at today, and still continues to support us and champion us as we go through this period.

I know it’s not the popular thing to talk about, but it matters in this period where we’re competing very heavily in this space. In terms of the specifics going forward, though, I probably can’t get into much more detail at this time.

IGN: How do you think about the competition space, not just with different streaming platforms, but with user generated content platforms like Twitch, YouTube, Instagram, and TikTok that are free, fun, and have powerful recommendation algorithms? When you’re thinking of competition, do those platforms come up?

Wilson: One of the things we take very seriously is we are vying for attention and attention [is] the most valuable currency of time. We also recognize that our price point is $15 a month and we’re excited about the $10 month option we can introduce here shortly, because it’s also hard-earned money. We value people’s time and money.

In that ecosystem, sure, I think all those things that you mentioned certainly would be part of that equation. For us, right now, it’s focused on all the things we do very well, which is the original programming, the Warner Bros. premieres. Who knows where that can go down the line, but I will tell you that what we’re doing right now with the current formula has definitely been working. We respect that time is the currency, and right now we’re seeing improvement on all those metrics.

IGN: Just jumping off what you said, the ad-supported version of HBO Max is coming. This is the cheapest you’re ever going to get HBO for. If you want to get HBO for 10 bucks, you can do it. But it’s actually an expensive ad-supported streaming service when you compare it to Disney+, which is ad-free for $8. Netflix’s lowest price is $10, and that’s ad-free. How do you think about the price point? And how do you look at the reception? Is there a concern that even at $10 it’s priced too high?

Wilson: One of the most beautiful things about our space, and having lived this for 20 something years, is that consumers get to vote and tell us. We’re very proud of the IP that we bring to bear and all the stories that we have. It’s all the Warner media properties: certainly Cartoon Network, Adult Swim, Warner Bros., the DC Universe, Harry Potter, etc. We feel very good about that price point.

But we also know that retail businesses are very agile businesses and consumers get the vote. Ultimately, I think we’ll go to market and see how consumers react. But we’re just excited to offer what we can for a lower price point in exchange for the mild interruption of time with some very elegant and worthy, powerful advertisers.

IGN: Related to the price, there was a big news conference today about HBO Max’s Latin America rollout. The price point is much cheaper, coming in between $3 and $6 a month. How did the team get to that price point? Was it solely to bring in as many customers as possible at a lower price point so you can expand much faster?

Wilson: When you look at those markets, they are obviously highly fragmented, very, very different market by market. When you look at the penetration of HBO in those markets versus say what we already have in the United States, we just knew there’s a massive total addressable market there, and that is under penetrated. The focus price strategy is a good one. When you look at the value that’s inside of that, where you not only have all the great catalogue that you enjoy here today in the United States, but there’s 100 new, original programs being produced for Latin American territories over the next year and a half in 2022, we’re gonna enjoy the benefits — $6, I think, is a heck of a value. We’re just being very aggressive in those markets.

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IGN: One of the questions that’s repeatedly brought up, especially because of recent things happening with Netflix, is piracy via password sharing. On the one hand, it gets people into HBO Max. On the other hand, it’s a $15 customer that you’re losing out on. How are you guys kind of viewing password sharing going into the second year of HBO Max?

Wilson: One of the dynamics we’ve seen so far is we have an account base sub, but there’s a lot of viewership within the family. We’ve been pleasantly surprised by the amount of kids profiles that have been created. Within that password sharing, we have not seem to have reached those levels at the moment. We want to do whatever we can, should we see those behaviors, to understand how we can create more value for that network. In our case, it’s a family today, but perhaps there are other extensions associated with that. We’ll take a look at the data and figure out what the best course of action is going forward.

IGN: I don’t like the term streaming wars, but I think if we’re going to be more realistic about it, it’s two different types of wars: churn (who’s going to be able to keep customers) and the fight for global programming that travels. Netflix is a great example, where they have Money Heist or Elite that are popular in the US and Spain. When you’re looking at international scale developing local content, how are you thinking about ensuring that travels for other viewers, including those in the US?

Wilson: It’s sort of a given. We want to be mindful of a global audience. The reality is, much like some of the competition, but certainly where our focus will be, there are just going to be stories that are going to be relevant for certain countries and nationalities. We’ll have that as part of our formula. Then there are stories that are going to be relevant around the globe. You’ll see a healthy mix.

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IGN: In Latin America with HBO Max, there’s a live sports play. People will be able to watch some live sports. Sports and streaming in general are becoming a bigger question as Disney makes deals for ESPN and ESPN+, NBCUniversal makes deals for Peacock, and ViacomCBS is using Paramount+ as a big sports play. Do you guys see Max as an actual venue for live sports to play out? Is that crucial to keeping up with competition?

Wilson: Streaming wars — I don’t love that term either. It’s all early formation. I think we truly believe in [what’s best for] the mission. It’s all about figuring out what is best and how we can best serve our customers. In terms of live sports, any specifics around that I’m not goning to be able to share today, but I can assure you that whether it’s Jason [Kilar], John Stankey [AT&T CEO], myself, Andy [Forsell, head of HBO Max], or whomever, we’re constantly looking at how to get the entertainment portion right for our customers.

IGN: One last question for you. HBO Max is entering a new first year. There’s just a lot of change that’s about to happen. There’s a lot of uncertainty, but also a lot of opportunity. What are you excited about going into the second year, and third year with Discovery?

Wilson: We’re excited. We know that we’re just getting started. Whether it’s a new universe, or new world, or just continuing down the path of what we’re doing, we strongly believe in what we’re doing. We’re seeing it in the great strides we’ve been making, so I would just tell you that this team is remarkable and it remains unparalleled in the industry.

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