HBO Max Will Be Hammered by Competition

By Douglas A. McIntyre Updated Feb 24, 8:28AM EST · Published Feb 23, 7:28AM EST

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

HBO Max Will Be Hammered by Competition — © Disney Studios

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.

[nativounit]

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.

[recirclink id=647172]
[wallst_email_signup]

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.