From Elmo to Tony Soprano: HBO Max's Game Plan as Told By Two of Its Creators

Sam Blake

Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake

From Elmo to Tony Soprano: HBO Max's Game Plan as Told By Two of Its Creators

HBO Max, the new streaming service from AT&T's WarnerMedia, launches Wednesday. Advertised as the place "where HBO meets so much more", HBO Max will debut with over 10,000 hours of content from a range of brands including HBO, Warner Bros., Cartoon Network and Turner, with characters as diverse as Elmo and Tony Soprano. This marks a culminating milestone in AT&T's massive integration that began in 2016 when it agreed to acquire Time Warner for $85.4 billion.


Widely viewed as both a streaming offering for content-hungry viewers, and as a value-add for AT&T's customers, HBO Max will hope to effectively absorb the 30 million or so current HBO customers into its initial subscriber count. Despite the head start, and the track records of a century-old studio and TV's most prestigious channel, industry onlookers have highlighted several challenges facing the new service.

HBO Max launches with over 10,000 titles across a range of content brands

One is its price. At $15 per month, HBO Max will cost more than any of its competitors in the video streaming space. That takes on greater weight given the number of competitors, including Netflix, Disney+, Amazon Prime Video, and NBCU's Peacock – all of which charge less than HBO Max. Then there is the fear of brand dilution. To grow the plateauing HBO subscriber base, HBO Max is staking out a competitive position built upon a broad mix of content ranging from upscale HBO series to more middlebrow fare like Big Bang Theory.

dot.LA caught up with two HBO Max leaders to learn about the key decisions leading to today and to explore the path ahead. Tony Goncalves oversees HBO Max's product, performance marketing, and data & analytics. Reporting to chairman Bob Greenblatt, Goncalves also runs Otter Media, a WarnerMedia subsidiary that houses several digital content companies. Goncalves spearheaded AT&T's acquisition of Time Warner and formerly led DirecTV's expansion into mobile content. Sarah Lyons, senior vice president of HBO Max's product experience, provided additional comment.

dot.LA: To stand out in this competitive space, it obviously helps to have good content, good data, and a good user experience. But what can you do if everyone else has those, too?

Goncalves: I think it's a misnomer that we're all competing to be the one platform that consumers go to. A variety of us are going to offer these platforms and consumers will have more than one. These new "super-networks" are emerging, in the form of an app that aggregates lots of content, and you stand out by what stories you're aggregating, and how you're curating and presenting them. The data tells us that consumers have 2-3 services today and are willing to pay for up to 4-6 — so our goal is to be one of those 4-6.

HBO Max users will be able to browse by "hub"

Lyons: We looked at research into consumer sentiment and saw that consumers value the experience just as much as they do the content. There's a common problem among customers with finding something to watch, because there's a sea of content out there. They're not quite confident that when they start a new show, it will be time well spent. We talked to them about that and learned on average it takes about nine minutes to find something to watch — and that 20% of them abandon it altogether because they get frustrated and give up. When we asked about recommendation engines, they started to kind of recoil; they had a visceral reaction. They'd say, 'How could a robot purport to know who I am or what I want?' They felt boxed in. So we kept all of that in mind as we were creating the product experience, and we felt like we had an opportunity to create a sweet spot with a service that blends the human touch in curation with underlying data for personalization.

Goncalves: We believe the opportunity is to present consumers a clean, clutterless experience and get away from that endless scroll by giving consumers the confidence that when they press on a tile, they'll be taken into a great story — which is not necessarily the case in the marketplace today. That's a real opportunity for differentiation.

In developing your launch slate of content, how did you decide how much original content you needed, how much catalog content you needed, and what kind of each?

Goncalves: If there were a formula, I'd be happy to walk you through that. But the reality is we had to

step back and define what we wanted to be when we grew up. We started with this incredibly valuable anchor of HBO. We were extremely fortunate that the service had garnered over 30 million paying subscribers over the years, but it had essentially peaked. So we started with the demographic we had — higher-income households, a bit more male — then morphed our programming to grow around that.

Lyons: The conundrum was how do you take those existing users and give them a new experience while keeping them comfortable, and at the same time target a new set of subscribers that are millennials, Gen Z, families, females, kids of all ages. How do you add them and keep the experience fresh and add all the content that goes along with it, yet keep it premium while not alienating subscribers? It was all a balance.

How do you approach the role of original versus licensed content?

Goncalves: You tend to see in the data that originals are the titles that drive people to subscribe, whereas the licensed content is what garners the engagement thereafter and keeps consumers on these platforms.

There's some concern that customers may be confused about the various HBO options – HBO, HBO Go, HBO Now, HBO Max — and, on top of that, people may be unclear about what they're entitled to based on their current HBO situation. AT&T is still negotiating with Comcast, as well as Amazon and Roku – which together control nearly 70% of the streaming device market – but as of today there are no agreements to bring HBO Max to those users. To what extent are you hopeful about resolving those negotiations?

Goncalves: I can't get into specifics of the negotiations themselves. But as we go forward, we want to bring everything together. We need to work with our distribution partners in order to do that, and I think you'll see that come to life, where we do come together and align on objectives. You'll see a lot of HBO Now apps turning into HBO Max apps overnight. As far as the folks that we're not aligned with, our hope and expectation is that we'll continue working with them and in the days and weeks to come, we'll come to an agreement. But the consumer has other options.

Tony Goncalves oversees HBO Max and is also CEO of Otter Media

In the sprint to launch, you had teams collaborating remotely across Los Angeles, Seattle, New York and Atlanta. How were they able to work together and meet the launch date target?

Goncalves: I wish you could see the big smile on my face right now. This could've turned out bad. We were uncomfortable two and a half months ago, until we saw these folks rally. We became proficient in Slack and in video calls. The tech teams in particular became proficient at coding at home, doing quality checks of the apps from home and doing quality control left and right — we had to put devices in people's homes and be really flexible. Then you look at the marketing team that had a marketing plan ready to go, anchored on things like March Madness, and all of a sudden those went away. But you saw a team showing up with a sense of purpose and working remotely and getting comfortable with needing to change the way they were operating and I think we're the better for it. I'm really, really proud of what we've done here and I think this pivot is something that I'm most proud of.

Speaking of pivoting, you've been involved in a lot of big, future-oriented business decisions. What have you learned about navigating a business transformation on a scale like this?

Goncalves: Business transformation at scale, in any business, is really, really tough. I think the only way that businesses succeed is if they have a clear definition of a goal – the beacon – and then a path to get there. It became really clear (for AT&T) that as a core connectivity company, being purely a pipe wasn't the path that the company needed to go. The question then became what value-add was needed to put on top of that. Video happens to be the most trafficked content over the network, so I think the clarity of the fact that the network and content needed to come together has really helped this company put a beacon out there as to what it ultimately needs to be. The hardest part is bringing the hundreds and thousands of employees along for the ride and getting them committed, and I think we've done that by articulating this marriage of content and connectivity.

You've been either in L.A. or traveling to L.A. for much of your career. How have you seen it evolve over the years as a business and tech hub?

Goncalves: If you just look at Playa Vista, and what it was and what it is, that alone gives you the answer, when you have a variety of more tech-oriented companies anchoring in and around Playa and Culver. I think it's fascinating, because the primary reason that that happens is talent acquisition. All these companies need talent, so these hubs tend to emerge out of the need for talent and that's what I've seen pop in L.A. A funny anecdote: I was doing a lot of traveling back and forth earlier in my career at DirecTV and I was looking to potentially buy a condo or house. I looked in Playa and I scratched my head as to why anybody would pay $500k for a place there. But today if you can find one apartment even for sale at anything under three-times that, you'd be lucky.

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🏰 Disney's Epic Investment Stands Out Amidst Gaming Industry Layoffs

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

🔦 Spotlight

In the midst of widespread gaming industry layoffs, a glimmer of positive news emerges as Disney announces a significant move: a $1.5 billion investment in Epic Games. 🏰💰🐭

Image Source: Disney

Disney's $1.5 billion investment in Epic Games, disclosed late Wednesday, signals a strategic alignment aimed at expanding the success of "Fortnite." The deal enhances Epic's growth prospects after financial setbacks, including layoffs, and strengthens the partnership between the two companies. With Disney gaining a larger equity stake in Epic, the collaboration will broaden the integration of beloved Disney franchises like Marvel, Star Wars, Pixar, and Avatar into the game, potentially boosting its appeal and longevity. This significant investment underscores Disney's commitment to interactive entertainment and signifies a shift towards games as a primary revenue stream, aligning with the growing trend of digital engagement among younger demographics. Moreover, the potential for crossover sales of physical Disney products within "Fortnite" and the exploration of new content distribution channels are just some of the opportunities arising from this partnership.

For LA tech, the Disney-Epic Games partnership represents a validation of the region's burgeoning tech and gaming ecosystem. The substantial investment in Epic, who maintains a large Los Angeles office with 1,000+ employees (according to LinkedIn), reflects confidence in the LA’s talent pool and innovation potential. Additionally, this partnership between two industry giants fosters an environment for further collaboration, investment, and growth within LA's tech sector. As Disney and Epic Games deepen their ties and explore new avenues for content integration and distribution, it not only elevates the prominence of LA as a tech hub but also stimulates economic growth and job creation in the region. This partnership highlights LA's unique position as a hub where technology and entertainment converge. With its ability to integrate diverse industries, LA is driving innovation and expansion in digital entertainment. 🚀💸🎮

🤝 Venture Deals

LA Companies

  • ProducePay, a financing and marketplace platform for the fresh produce market, raised a $38M Series D led by Syngenta Group Ventures joined by Commonfund, Highgate Private Equity, G2 Venture Partners, Anterra Capital, Astanor Ventures, Endeavor8, Avenue Venture Opportunities, Avenue Sustainable Solutions, and Red Bear Angels. - learn more
  • Blush, an invite-only dating app that drives users to local businesses on dates, raised a $7M Seed Round from individuals like Naval Ravikant. - learn more
  • Mogul, a startup founded last year that provides an overview of an artist's royalty earnings and identifies areas where money is owed but has not yet been collected, raised a $1.9 million seed round from Wonder Ventures, United Talent Agency, AmplifyLA, and Creator Partners. - learn more
  • Avnos, a hybrid direct air capture startup, raised a $36M Series A led by NextEra Energy and joined by Safran Corporate Ventures, Shell Ventures, Envisioning Partners, and Rusheen Capital Management. - learn more
  • AI.fashion, startup whose mission is to help retailers enhance the online shopping experience by providing consumers with virtual try-ons and personalized fashion recommendations, raised a $3.6M Seed Round led by Neo. - learn more
  • Suma Wealth, startup that aims to demystify financial topics and provide culturally relevant content, virtual experiences, and resources to help Latino users navigate financial challenges and opportunities, raised a $2.2M Seed Round . Radicle Impact led, and was joined by Vamos Ventures, OVO fund and the American Heart Association Impact Fund. - learn more
  • 222, a startup that helps users discover their city and meet new people through unique social experiences, raised a $2.5M Seed Round. Investors included 1517 Fund, General Catalyst, Best Nights VC, Scrum Ventures, and Upfront Ventures. - learn more
  • LimaCharlie, a security operations cloud platform, raised a $10.2M Series A led by Sands Capital. - learn more
  • Polycam, an app that uses a smartphone’s sensors to capture 3D scans of objects, raised an $18M Series A co-led by Left Lane Capital and Adjacent, and joined by Adobe Ventures and individuals like Chad Hurley and Shaun Maguire. -learn more.

LA Venture Funds

Actively Raising

  • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
  • CZero, a startup building software to decarbonize logistics for logistics businesses and goods business through a vetted marketplace and optimization software. - learn more
  • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
  • Sweetie, a marketplace to help people plan date nights, is raising a $1.5M Pre Seed Round. - learn more
  • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

Venture Waves, Climate Tech Wins, and Silicon Beach's Ongoing Evolution

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Anduril Seeks $1.5B in VC Funds

Defense company Anduril Industries Inc., based in Costa Mesa and founded by Palmer Luckey, is seeking to raise $1.5 billion in fresh funds to boost its valuation to $12.5 billion or more, according to sources quoted by The Information. This fundraising effort, if successful, would mark one of the largest venture capital rounds of the year.

Image Source: Anduril

Anduril recently secured a contract to develop and test small unmanned fighter jet prototypes under the Air Force’s Collaborative Combat Aircraft (CCA) program, beating out major defense companies like Boeing, Lockheed Martin, and Northrop Grumman. Alongside General Atomics, Anduril will design, manufacture, and test these aircraft, with a final multibillion-dollar production decision expected in fiscal year 2026. This program aims to deliver at least 1,000 combat aircraft to fly in concert with manned platforms and is part of the Air Force’s Next Generation Air Dominance initiative. Central to Anduril’s success in this contract is the Fury autonomous air vehicle, acquired through the purchase of Blue Force Technologies. This victory underscores Anduril's rapid advancement in the defense sector, aligning with Luckey's vision of building faster and more cost-effective defense assets. - learn more

Los Angeles Ranks Number 1 in Emerging Climate Tech Hub

The 2024 Emerging Climate Tech Hubs Report by Revolution highlights Los Angeles as a burgeoning center for climate tech innovation. LA's growth in this sector is driven by its diverse talent pool, strong research institutions, and a culture of environmental consciousness. The city's unique mix of legacy industries, such as entertainment and aerospace, alongside emerging tech companies, positions it as a pivotal player in the climate tech landscape. This shift reflects a broader trend of decentralized climate tech funding across the U.S., reducing the historical dominance of California's traditional hubs. - learn more

Silicon Beach: Looking Back, Moving Forward

Assessing the overall health of the startup market is challenging, especially as venture capital funding has decreased by an average of 61% from 2021 to 2023 across the top VC markets in the US. Markets with robust ecosystems in AI, SaaS, Biotech, Healthtech, and Fintech appear to be weathering the downturn better than those focused on Consumer and Gaming industries, areas where Los Angeles traditionally excels.

Percent Change In VC Funding By Region

CB Insights

LA Times paints a rather bleak outlook on the Los Angeles tech scene noting venture capital funding in Greater Los Angeles plummeted 73% from 2021 to 2022. Silicon Beach, once a vibrant tech corridor, currently faces high vacancy rates and lacks late-stage financiers, especially in the AI sector. However, there are positive signs, including growth in aerospace startups and increased venture capital investment in early 2024, suggesting a potential rebound for LA's tech ecosystem.

While LA may not be exceeding expectations during this period, its tech ecosystem warrants a nuanced evaluation, given the broader market dynamics and its strong performance in specific sectors. Reach out to us with your thoughts.

🚀 SpaceX gears up for another stellar year, active raises, and more

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Happy Friday Los Angeles! You made it through the first week of 2024!

🔦 Spotlight

Elon Musk may be a divisive (albeit entertaining) figure, but the continued success of SpaceX is pivotal for the aerospace industry in Los Angeles and more broadly around the world.

Image Source: SpaceX webcast

What happened with SpaceX in 2023?

  • Elon Musk challenged Facebook founder, Mark Zuckerberg to a cage fight.
  • SpaceX launched 96 successful missions with its Falcon series of rockets, a 57% increase over its previous annual record.
  • SpaceX conducted two test flights of the largest and most powerful rocket ever built, Starship.
  • Roughly two-thirds of SpaceX's launches in 2023 were devoted to building out Starlink, the company's satellite-internet megaconstellation.
  • Isaacson’s Elon Musk biography was published in September including everything from Musk’s tumultuous relationship with his father to his work ethic and “demon mode”.

Moving forward what can we expect from SpaceX and its controversial founder? Continued innovation pushing the aerospace industry to new limits? Yes. More drama? Without a doubt.

Here is some of what is to come in 2024:

🤝 Venture Deals

Just Announced

Check back next week!

LA Exits

  • CG Oncology, an Irvine, CA-based developer of immunotherapies for bladder cancer, filed for a $100M IPO. It plans to list on the Nasdaq (CGON) with Morgan Stanley as left lead underwriter, and has raised around $317m in VC funding. - learn more
  • McNally Capital agreed to sell Advanced Micro Instruments, a Costa Mesa, CA-based maker of gas analyzers and sensing technologies, to Enpro (NYSE: NPO). - learn more

Actively Raising

  • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
  • CZero, a hard-tech startup that is developing a technology for decarbonizing natural gas, is raising a $1.5M Seed Round. - learn more
  • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
  • Sweetie, a marketplace to help people plan date nights, is raising a $250K Angel Round. - learn more
  • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

📅 LA Tech Calendar

Sunday, January 7th

Wednesday, January 10th

  • Startup Cafe: Networking with a Kick - Entrepreneurs, Startups, and Tech Enthusiasts join together to meet and connect with like-minded people, industry professionals and investors, while enjoying a nice cup of coffee in Venice at The KINN. This week’s interactive discussion about AI’s evolution in entertainment will feature Dr. Sam Khoze and Rachel Joy Victor.
  • Venice Tech Happy Hour- Join Startup Coil and FoundrHaus Wednesday evening and enjoy the sunset from the rooftop, grab a bite overlooking Abbot Kinney, and mingle with other tech enthusiasts and entrepreneurs by the bar on the patio.

Have an awesome event coming up? Reach out to be featured on next week’s Newsletter!

📙 What We’re Reading

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