Traditional channels + streaming of video content the way
Editor’s note: This article is from the micro-channel public number “poison eye” (ID: DomoreDumou), Author: poison eye newsroom Li Qingli Zhang Friends.
“HBO must be the core of a new mission: to build a true Netflix competitor.”
This is the rhetoric of WarnerMedia CEO Stankey before the launch of HBO Max. In the face of this ambitious goal, his bargaining chips are: the nation’s largest telecommunications company, the most commercially valuable TV pay channel, and rich movie assets. Traditional content production and channel vendors are uniting and are planning a counterattack against streaming media.
In contrast to other streaming media platforms on the market, Netflix, Amazon Prime and Hulu have been engaged in streaming services for many years; Disney is the world’s largest content IP owner, and Apple is a smart hardware manufacturer.
Originally, HBO Max will be launched in the fourth quarter of 2019. However, the actual launch time was half a year later than expected. In May 2020, WarnerMedia’s HBO Max was officially launched and joined the streaming media “war”.
In order to advance this ambitious plan, Warner made a shocking move at the end of 2020: In 2021, all 17 films under its own brand will be launched simultaneously in theaters and HBO Max streaming media.
“Wonder Woman 1984” is the first trial product of this project. Judging from the current data feedback, Warner has gained benefits in both box office and streaming media growth. The mobile terminal growth of the product is making history, and the box office performance is also among the top during the epidemic.
But the longer-term test continues. HBO Max is still relying on traditional channels for blood transfusion, and has not independently moved on the Internet. An independent HBO Max ecosystem should be based on Warner’s self-integration and brand renewal. This will be a process that touches the interests of all parties.
HBO Max is a combination of traditional channel providers + film and television content, and this is what Stankey is looking for. “This will be another advantage of the merger between AT&T and Time Warner. We are committed to launching a compelling and competitive product.”
Has HBO max win?
After the theater network is released simultaneously,”Wonder Woman 1984″ proved the effectiveness of this approach in promoting user growth.
After “Wonder Woman 1984” was released, HBO Max set a single-day download record for APP. According to data from market research company Apptopia, about 554,000 users signed up for HBO Max during the three days of Christmas weekend, of which the number of downloads in a single day on Sunday alone reached a record 244,000.
“Wonder Woman 1984”
Warner did not disclose the performance of too many movies on streaming media, only that “nearly half of HBO Max retail users watched this movie on Christmas Day.” As of October last year, HBO Max’s latest “retail” There are 3.6 million subscribers. As of early December, HBO Max had 12.6 million subscribers, and retail subscribers accounted for only a small percentage of them.
In addition to half of retail subscribers, there may be millions of families who watched the movie on Christmas. According to CNBC’s speculation, there are millions more people watching “Wonder Woman 1984” at home than in movie theaters.
This proves once again that high-quality, time-sensitive long video content can quickly promote the growth of streaming media. Half a year ago, Disney+ relied on the musical “Hamilton” to prove this point. From July 3rd to 5th, the number of Disney+ App downloads worldwide was 513,323 times, and the 3-day download volume increased by 47% compared to the average 3-day weekend download volume in June.
Musical movie “Hamilton”
The simultaneous release of theater network to stimulate the rapid growth of users is the purpose of Warner Bros. It can be seen from the released film list that will be released simultaneously in 2021, from classic IP sequels to family fun movies, the list is very luxurious. Contains “”Dune”, “Godzilla vs. King Kong”, “The Matrix 4”, “Cat and Mouse”, “Call of Souls 3”, “New Suicide Squad”, etc., from which you can feel Warner’s urgency for the development of HBO Max.
Since the acquisition of Warner, AT&T has not only shouldered high debts, but also faced constant losses. This is also what prompted them to make the decision to “synchronize hospitals and networks”. According to CNBC reports, AT&T’s current stock price is close to a 10-year low. At the same time, the stock price of its biggest competitor Verizon is approaching historical highs, and it is clear that Wall Street investors do not like what they are seeing now.
The important reason for the loss is the stagnant streaming media business.
HBO Max was launched from May to October 2020, with only 8.6 million users, of which only about 3.6 million are new registered users, and most of the rest are original HBO users.
In terms of conversion rate alone, HBO Max is not optimistic. There were nearly 30 million users on the HBO platform, and more than 25 million users are eligible for free activation of HBO Max.
For comparison, Disney+ has gained more than 80 million subscribers within one year of its launch. Currently, Disney has also reached a partnership with Hulu, one of the Big Three streaming media. After the acquisition of Fox, Disney’s holding of Hulu reached 60%. With mature streaming services and the amount of content that is not lost, it can almost directly target Netflix.
Marvel’s new drama “Legend” is online Disney+
Traditional player Netflix has added 26 million users in Q1 and Q2 of 2020, and the number of global users is close to 183 million. In Q1 alone, Netflix added 15.77 million new subscribers. The platform achieved revenue of US$5.77 billion, a year-on-year increase of 27.6%.
The current HBO Max used the new blockbuster “Wonder Woman 1984” to create social topics and successfully attracted user expansion. Next, HBO Max has a huge library of popular dramas and movies, which will attract users to settle and retain.
HBO Max includes all of HBO’s expertise in “Game of Thrones” and “Westworld”.There are content, high-priced classic series “Friends”, “The Big Bang Theory” and Studio Ghibli works “Spirited Away” and “My Neighbor Totoro”, as well as various classic films produced by DC Cinema Universe and Warner Bros. The content of HBO is their natural advantage.
“Game of Thrones”
However, Warner doesn’t need to worry about content at all. At Disney’s 2020 Investor Conference, more than 50 movies, dramas, and animation projects were announced, including 10 Marvel-related dramas and 10 Star Wars. Series derivative episodes. Compared to Disney, Warner’s recent performance on the big screen is at a disadvantage. If you really want to regain a city on streaming, you need to rebuild the DC Super British IP and integrate HBO’s drama production capabilities.
Before 2019, there were three major streaming media giants in the United States, followed by Netflix, Amazon Prime and Hulu. After 2019, traditional content production companies and technology companies such as Apple, Disney, Universal Pictures, and HBO have also entered the game, establishing their own new streaming media service platforms, making the already crowded streaming media market more competitive.
Next, if AT&T and Warner can use their advantages, I believe HBO Max will have the opportunity to form an independent ecosystem and gain a place in the streaming war.
Challenge the relationship between hospitals and networks
After the simultaneous release of “Wonder Woman 1984”, the theaters actually gained limited benefits from it.
“Wonder Woman 1984” set a record for national theater releases in the United States and Canada with a box office of $16.7 million. According to the calculation model of The-Numbers, the predicted value of the premiere of “Wonder Woman 1984” is 14.35 million US dollars. This number differs from the actual box office by about 16%, which can be regarded as a higher-than-expected deviation in “Wonder Woman 1984”.
According to the current situation in North America, close to 60% of theaters are still closed. For theaters facing bankruptcy, even if “Wonder Woman 1984” chooses to synchronize with the theater, it still serves itself Provides high-quality content and brings a certain audience.
But from a longer-term perspectiveLook, “Wonder Woman 1984” is a slap in the face of North American cinema and Hollywood.
“Wonder Woman 1984”
As soon as the Warner Institute Network’s synchronization plan was launched, the share price of North American theater giant AMC fell by 17%. Adam Aaron, CEO of AMC Cinemas, said, “WarnerMedia intends to support the construction of its own HBO Max by sacrificing a large part of the profitability of its film department, production partners and filmmakers. For AMC, We will do our best to ensure that Warner will not sacrifice our interests. We will actively strive for favorable terms to guarantee our business.”
Michael Nathan, founder of Moffett Nathanson Media Research, told the New York Times: “Warner has long been known as the home of filmmakers. This is their competitive advantage, but this move clearly alienates these creations. Talent, these directors and stars are not engineers you can replace at will.”
Theater representatives, directors and even actors who felt betrayed expressed dissatisfaction with this. Director Nolan expressed his disappointment with Warner even more angrily. “Before going to bed at night, he thought he was working for the best studio, and the next day he woke up to find that they were working for the worst streaming service.” /p>
This kind of damage is not only emotional, but also real benefits. In the past, Hollywood’s participation model was back-end sharing. Many participants benefited from the box office dividend after the movie was released. After the implementation of the new model, not only the North American box office will inevitably drop, but the global box office will also be affected. Drop or even disappear.
This is not the first time streaming media has challenged the interests of cinema chains. Previously, Netflix has become a public enemy of Hollywood because of continuously shortening the window period for self-made films.
Starting this year, under the streaming media dividend caused by the epidemic, content producers such as Disney have also begun to join the ranks. In September this year, “Mulan”, which invested 200 million US dollars, chose to use the pay-on-demand method. Landing on Disney+, the movie cake is being re-divided.
Disney + movies are charged separately, and the box office may be calculated. But HBO Max’s movies are available to all members and there is no separate payment mechanism. If the amount of broadcasts cannot be converted into the box office, then how to protect the interests of filmmakers is an urgent problem to be solved.
Although, the CEO of Warner said that if the theater business returns to normal, the movie screening method will be adjusted or a different operating mode will be adopted. However, many people believe that this move will permanently change the way movies are shown, and the trend of streaming media is irreversible.
Streaming is popular, and the epidemic has only promoted changes in the relationship between hospitals and networks.
At this year’s Poison Eye (WeChat ID: DomoreDumou) 2020 Cultural and Entertainment Conference, Ye Ning, the founder of Qingsong Films, mentioned that the integration of hospitals and networks must be the future. I hope that the original profit model will definitely not work. We need to establish a new order. What everyone should consider is how to satisfy your users.”
AT&T leader Kilar also mentioned a similar view, “In business, on the Internet, the best way to find success is to start with the customer.” “If we start and end every day with customers Center, we will lead the industry.”
According to the National Economic Survey released by CNBC in 2018, 57% of Americans are using different forms of streaming services. The viewing habits of young Americans are changing. More and more people like binge watch and streaming media services that are not restricted by time and place.
The change in user habits has given each company an opportunity to take a share in the era of big data; the fierce competition in the streaming media market will also prompt each company to continuously optimize their services, which is a good thing for users. .
HBO MAX’s past and present
HBO Max was born in the self-defense counterattack of traditional channels against streaming media. Therefore, it is backed by an alliance of traditional content producers and distributors.
With the explosion of the Internet and streaming media, traditional content distribution channels have begun to decline. According to overseas research reports, traditional TV channel distributors lost approximately 1.5 million subscribers in the fourth quarter of 2019. The main loser was AT&T.The number of TV subscribers lost during this period reached 1.16 million.
Traditional operators want to gain a firm foothold in the new era, so embracing streaming media is an important part.
And before embracing streaming media, what needs to be done is resource integration. In June 2018, AT&T, the nation’s largest fixed-line and mobile phone telecommunications service provider, finally acquired Time Warner after a two-year lawsuit with the US Department of Justice and officially changed its name to WarnerMedia . Once, in the antitrust lawsuit between AT&T and Time Warner, its debating representatives mentioned, “Under the current environment of technology giants, if a media company wants to survive, it can only survive by combining film companies, TV channels, distribution, and data. Is one.”
Warner Media is second only to Comcast Group and The Walt Disney Company, the world’s third largest entertainment company by revenue, and its business involves publishing, film and television and other fields. Owns many influential brands such as CNN, HBO, DC Comics and Warner Bros. It also owns well-known IPs such as “Harry Potter”, “The Matrix”, “Batman” and “Blade Runner”.
“Harry Potter”
AT&T is a giant in the communications field, and WarnerMedia holds a large number of IPs. This combination does seem to have advantages. Judging from the current situation, the accumulation of AT&T and WarnerMedia in the previous era is not only an important bargaining chip when it comes to streaming media, but also a shackle that needs to be overcome.
So Stankey is trying to transfer all of Warner’s resources from cable TV, movies, and HBO to HBO Max.
In an interview with Variety, Warner Media CEO Jason Kilar said that Warner Media’s business was originally divided into three unrelated parts: Warner Bros., HBO, and Turner. The company needs to integrate these three parts to make WarnerMedia truly a whole.
As part of the reorganization, WarnerMedia conducted several rounds of layoffs, including more than 1,000 employees in November last year. These include Bob Greenblatt, who took over as chairman of WarnerMedia Entertainment in March 2019. There are also a group of senior Warner executives who choose to resign voluntarily because of their different concepts of change from the new leaders.
In terms of product architecture, HBOPreviously, HBO Go and HBO Now were launched in 2010 and 2015. HBO Go serves users who subscribe to HBO cable TV products; HBO Now serves users who do not have cable TV but want to subscribe to HBO content.
Neither has brought a good user experience. Because it is not equipped with enough servers and bandwidth, HBO Go has problems such as interruptions and freezes when playing the American TV series “Game of Thrones” and “True Detective”. Due to the confusion of the brand, users have no intention of distinguishing between them, which limits the frequency of consumers’ use. The traditional media HBO service lost more than 2 million subscribers in the first quarter of 2020.
After WarnerMedia realized the problem, in June 2020 it decided to withdraw HBO Go from the market and changed HBO Now to simply “HBO”. After the launch of HBO Max, users who subscribe to HBO paid channels through AT&T channels, as well as existing HBO Now users, can directly upgrade to HBO Max for free.
However, according to CNBC’s report, Warner’s actions were still half a beat slow. Employees responsible for marketing and branding within the company believe that these changes should have been completed before HBO Max was launched.
In terms of promotion, the past distributors did not play a sufficiently active role. HBO’s former partners, pay TV and streaming media distributors, have no incentive to promote HBO Max to millions of users who have already used HBO. Stankey once thought that HBO users would switch to HBO Max over time, but now it seems that this transition is very slow.
In addition, negotiations between set-top box vendors and new distribution channels such as smart TVs are extremely difficult. WarnerMedia spent several months negotiating with Amazon. In the end, the two companies completed the negotiations. As a condition of the agreement, HBO will remove its content from Amazon’s channel interface next year and put HBO Max on Amazon Fire TV.
According to foreign media reports, the difficulty of the negotiation lies in the excessive channel rights granted to Amazon by HBO, which makes it difficult for Warner to take back its exclusive content and keep viewers in the AT&T ecosystem.
Although we are not sure whether the current decisions of ATT and Warner are correct, it seems that HBThe development of O Max is indeed not smooth enough.
The era of streaming media has arrived, the traditional order has been broken, and the new order has not yet been established. The participants who need AT&T and Warner and even the entire streaming media war have many problems to solve.
But what we know is that times are changing, and waiting to die is always a bad idea.