How Does HBO Max’s Launch Compare to Disney+?

AT&T Earnings Investor Relations HBO HBO Max
Can HBO Max compete with the other major streaming services? HBO Max

Due to a significantly varied set of challenges both internal and external, it is unfair and perhaps reductive to compare the launches of two separate streaming powers. Neither service exists in a vacuum and context matters. At the same time, comparison is one of our only tangible benchmarks of success in the notoriously tight-lipped direct-to-consumer market. So, for better and for worse, the launch of HBO Max will be compared to other major streaming services such as Disney+.

On Thursday morning, AT&T announced in its Q2 earnings report that the launch of HBO Max—which went live on May 27—has helped to add 1.7 million new customers to HBO and the fledgling streamer over the first six months of this year. As of June 30, 2020, AT&T’s WarnerMedia reports that 36.3 million total U.S. subscribers are signed up to HBO Max and HBO, a 5% jump from the 36.4 million reported on Dec. 31, 2019. HBO Max had attracted about 3 million retail and 4.1 million overall subscribers after its first month, AT&T CEO John Stankey said Thursday on AT&T’s earnings call. The company is targeting 50 million U.S. subscribers and 80 million global subscribers for HBO Max by 2025.

Launching in the midst of the COVID-19 pandemic, in which every non-Netflix entertainment entity is struggling financially, certainly didn’t help the premium service, which runs $15 per month.

“Our solid execution and focus in a challenging environment delivered significant progress in the quarter, most notably the successful launch of HBO Max, resilient free cash flow and a strengthened balance sheet,” Stankey said.

For comparison, Disney+—which launched Nov. 12, 2019—accrued 33.5 million subscribers by March 28 and 54.5 million by May 5. This is far from an apples-to-apples comparison as Disney+ did not launch in the middle of a pandemic and doesn’t boast nearly the same library size nor the breadth of content as HBO Max. Obviously, the company is also lumping both Max and linear HBO together as well. But, fair or not, the two services are competitors despite what WarnerMedia leadership has said in the past.

HBO Max, which plans to release as many as 30 originals over its first 12 months, costs the same as WarnerMedia’s HBO Now standalone service, which is being phased out. While that $14.99 per month price point brilliantly put pressure on pay-TV providers to include Max in its offerings to customers, it has also been seen as an expensive barrier of access. It also hasn’t helped that everyday consumers remain confused about the difference between HBO Max, which houses 10,000 hours of content, roughly double that of HBO, and the premium cable network.

Prior to launch, WarnerMedia struck a handful of distribution deals with major players such as Apple, Google/YouTube TV, Hulu, Samsung and Comcast while also providing existing AT&T customers with Max access at no extra charge. However, WarnerMedia has still not yet reached agreements with Roku and Amazon, which account for a combined 80 million over-the-top users.

WarnerMedia is planning to invest $4 billion into HBO Max over the next three years. How Does HBO Max’s Launch Compare to Disney+?