HBO Max, the streaming service from Warner, is set to launch in May. Management recently announced a reunion of the actors from the wildly successful series “Friends,” which debuted long ago in 1994. The series may have been popular, but the fact that HBO Max has to reach back so far for major programming for a service that will go up against industry-leading services from Netflix Inc. (NASDAQ: NFLX), Amazon.com Inc. (NASDAQ: AMZN) and Walt Disney Co. (NYSE: DIS).
HBO Max has to compete with the well over 150 million paid subscriptions that Netflix and Amazon have. Disney believes it can have 60 million to 90 million subscribers by the end of 2024. That makes sense. The service has a lock on Disney, Pixar, Marvel and Star Wars films. It is also priced at $6.99 a month, well below its two larger rivals. Disney has taken effective control over Hulu, which has an estimated 28 million subscribers of its own. Hulu has been in business since 2007. Hulu’s subscription prices are between $5.99 and $7.99 a month, also well below the market leaders.
The newest large entrant to the market is Apple TV+ from Apple Inc. (NYSE: AAPL). After a free trial, Apple offers the service for $4.99 a month. Apple has an unlimited budget to attack the market.
There is another large tier of streaming services, which includes Sling TV and Furbo.
HBO Max does have HBO’s large library. However, it is up against such a large sea of competition that this will not be enough. The average number of streaming services Americans are will to pay for runs from 2.25 to 3.00, according to industry research. Two of those are taken up in many homes by Amazon Prime and Netflix because of their library sizes, years in the market and the billions of dollars they spend on exclusive programs. Disney+ already has amassed such a large base that it is probably in third place or will be soon.
HBO is too late to market and has too small a library to pull people away from the services they already use. A “Friends” reunion will not help that. The new HBO service can’t successfully launch into the industry.
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