Want to watch the next season of "Stranger Things" when it comes out? I know I do, so I pay for Netflix each month. "Jack Ryan"? That's over on Amazon Prime. "The Handmaid's Tale"? Hulu. If you think Picard was the best Star Trek captain, you'll need CBS All Access – but at this point in your budget you may be choosing between that or "The Mandalorian," for which you'll need Disney+. And let's not forget the new content exclusive to HBO Max, Apple TV+, BET+, and NBC Peacock.
Most of us are aware of the recent fragmentation of content across subscription streaming services, and we've either had to make some hard choices about which content we will watch or else we're now paying bills for streaming services that resemble the bundled cable bills we paid before we cut the cord. And it's not just the cost that bothers us. When nearly everything was on one of just a few services, we knew where to find it. Now, keeping track of which services have which content – and whether we currently have that service – seems like a job in itself.
<p>I don't think I need to convince most readers that this scenario isn't ideal for the consumer. So why are we here? </p><p>It's not that producers and distributors of entertainment content don't want to satisfy customers… they certainly do! But over the last decade or so, movie studios and television networks have seen the incredible power of using data analytics to inform decisions about what content to make, how to market it, to whom to market it and more. Subscription streaming services (like Netflix) observe everything that their viewers watch, and in turn use that information to determine what content to suggest to each viewer next. They even use it to inform decisions regarding what content to license or produce themselves and then to market that content most efficiently. They effectively create a series of personalized channels for each of their viewers, helping to connect you with content that you would love but might not be aware of. And in doing so, they can make investments in content in ways that differ from the traditional models and they reduce the inherent risk involved in bringing new shows and films to market. If you don't believe me, just ask the two professors from Carnegie Mellon who <a href="https://mitpress.mit.edu/books/streaming-sharing-stealing" target="_blank">wrote a book about this</a>.</p><p class="pull-quote">In an era where there is more quality content – both old and new – available to us than ever before, it feels increasingly hard to know what to watch and where to watch it.</p><p>The problem that a traditional television network (or movie studio) has is that they do not get this kind of personalized data on each of their over-the-air or box office viewers – nor do they usually get these data from the subscription services that license their shows and films. Even if they had such data, they don't have a platform that serves as a direct connection to the consumer, and so they cannot personalize which shows they market to each viewer and how they market them. That's what subscription streaming services have been able to do. And for a while, networks and studios have felt pretty left out of the new data-driven entertainment revolution. This largely explains why so many major players in the industry want to have a successful streaming service now — to gather individual data about each viewer and have a personalized connection / marketing channel to every one of their customers.</p><p>If you are a major network or studio trying to get into the streaming game and you need to compete with an established service like Netflix – who consumers already know and like – what do you do? You fall back on what you are already great at and make content that everyone wants to watch, and you make it exclusive to your streaming service as a draw to new customers. Or you stop licensing your best catalog content to the established streaming players and make it exclusive to your new service (sorry, "Friends" fans, <a href="https://variety.com/2019/digital/news/warnermedia-hbo-max-friends-exclusive-streaming-1203262335/" target="_blank">you'll need to pay for HBO Max</a>!). Hence, nearly every one of the subscription services out there has at least a few shows that you probably want to watch, and great content feels fragmented across a plethora of services for which you struggle to remember all of the names. </p>
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjg5MDU3My9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyMzU4NzQ4OX0.kYtlXCAgQgJImnpuJu_qrRxRbDcXSlRQg5amTw9uCpA/img.jpg?width=980" id="bbe33" class="rm-shortcode" data-rm-shortcode-id="0ba97dd5d6db1cbf28848b002d24dc76" data-rm-shortcode-name="rebelmouse-image" alt="Watchworthy" />
Watchworthy's app is one of several trying to make it easier for viewers to find the content they're looking for, across services.
<p>But even if the current fragmentation of content across so many services can be explained as a form of business competition, that does not make it ideal for the end consumer. I've already mentioned the obvious result that consumers are back to facing the choice of paying an ever-increasing multitude of subscription fees, missing out on content, or else <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1381827" target="_blank">turning to piracy</a>. But there is another, less obvious consequence for the customer. When most content that was online was centralized on just one or two services, those services observed most of what a customer viewed online, and thus had a strong understanding of each consumer's preferences. Those services also had an incentive to recommend or market to you the content that you would like most.</p><p>Now, however, if you only do 15% of your online viewing on, for example, Hulu, they observe a lot less about your viewing preferences than when you did 50-60% of your television and movie viewing there. They just don't know you as well. Moreover, a service like Netflix or Disney+ only has the incentive to recommend to you the content that is on their service, even if there are shows or films that you would meaningfully prefer on other subscription services. And this leads us to the irony that in an era where there is more quality content – both old and new – available to us than ever before, it feels increasingly hard to know what to watch and where to watch it. By fragmenting content across so many services in an effort to draw in customers and have a more personalized relationship with them, players in the industry have unintentionally left customers struggling to search for and find the content that is best suited for them.</p>
<p>One of the most commonly offered solutions to streaming fragmentation is that we should <a href="https://www.hollywoodreporter.com/news/one-fee-netflix-amazon-hulu-digital-tv-bundling-gains-momentum-1174725" target="_blank">just bundle the services again</a> – some have suggested that you should be able to pick up a bundle of Hulu, Netflix, HBO Max, etc. for perhaps half of what it would cost to buy them each separately. This may partly solve the customer's budget problems, but note that it does not solve the problem outlined above – if our viewing is spread out across a multitude of services, then the underlying viewer data are still fragmented. No one service knows us particularly well, and no service has the incentive to connect us with the content that best matches our preferences.</p><p>Where this eventually leads is a subject for another article – perhaps we will see the failure or consolidation of some of these services, or perhaps a third party can solve the problems I have described even while a number of subscription services retain exclusive content. <br/></p><p>There are examples of companies trying to address this issue such as <a href="https://www.likewise.com/" target="_blank">Likewise</a>, <a href="https://www.justwatch.com/" target="_blank">Justwatch</a>, or <a href="https://watchworthy.app/desktop" target="_blank">WatchWorthy</a>, but it is not clear whether or not they will succeed (disclosure: I myself am involved in a stealth startup working on a solution to this). Either way, I see this problem as one that requires a consumer-friendly solution, and I fully expect that the market will provide this one way or another.</p><p><em><a href="https://www.chapman.edu/our-faculty/brett-danaher" target="_blank">Brett Danaher, Ph.D.</a> is Assistant Professor of Management Science and Economics at Chapman University's Argyros School of Business and Economics.</em></p>From Your Site Articles
- Can Niche Streaming Services Survive in a Netflix World? ›
- Peacock, NBCUniversal's Streaming Service, Takes Flight - dot.LA ›
- HBO Max Is Hoping to Get You to What You Want, Faster - dot.LA ›
- Watchworthy App Aims to Make it Easier to Choose What to Watch ... ›
- Making At-Home Healthcare As Easy as Ordering Pizza - dot.LA ›
- The LA Dodgers Get Into Food Delivery - dot.LA ›
- Streaming Piracy Is Now a Billion-Dollar Industry - dot.LA ›
- Streaming Piracy Is Now a Billion-Dollar Industry - dot.LA ›
Related Articles Around the Web
Read more
Show less
Do niche services have a role to play in the streaming wars, or are they a musket in a battle of machine guns?
Heavyweight streaming services like Netflix, Peacock and Amazon are fighting for supremacy with broad, everything-for-everyone models.
Niche streaming services, by contrast, focus on a specific type of content for a specific audience. They pride themselves on being able to curate viewers' experiences with shows and movies they might not otherwise find. They often highlight their service's authenticity, efficiency and focus as competitive advantages. But as the behemoths spend big and increasingly expand their content libraries, is curation and community enough to survive?
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzUxNjI0NC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzMTYwMzgyMn0.466UWGiuaqkxkrIqNhLRaOap05F9gKbvC04f5KFgk64/image.jpg?width=980" id="9b578" class="rm-shortcode" data-rm-shortcode-id="777ea44c454aa366d823585184fa2028" data-rm-shortcode-name="rebelmouse-image" />
BritBox chief executive Soumya Sriraman
<p>"My board very laudingly says 'you guys have figured out how to get high-quality subscribers'," said Soumya Sriraman, chief executive of <a href="https://www.britbox.com/us/" target="_blank">BritBox</a>, a niche subscription service for British programming that launched in 2017 and recently surpassed 1 million subscribers. Sriraman told dot.LA that BritBox's focus has helped it to provide viewers a sense of community, which builds loyalty. She cites a high conversion rate of free-trial users to paying subscribers, and low cancellations.</p><p>"That's the goal – to bring in the right person and keep them," she said. "I don't want someone with a fleeting interest."</p><p>Sriraman suggested that offering that community feel is harder for the bigger, broad-serving platforms, and that being niche allows her team to better understand the interests of current and prospective customers.</p><p>"We can stay focused on learning more and more about them, and hence we'll be more efficient," she said.</p>
<p>
L.A.-based <a href="https://revry.tv" target="_blank">Revry</a> focuses on queer programming. The service is available for free or via an ad-free subscription tier. Viewers can also increasingly find it on third-party streaming services such as The Roku Channel. This range of distribution has helped Revry to reach over 250 million households and devices worldwide, according to chief executive Damian Pelliccione.
</p><p>
Pelliccione noted that his executive team includes two women of color and a Latino male, which he said underscores Revry's authenticity. He added that on his desk in Glendale sits a framed letter from a Saudi Arabian gay man who wrote to thank Revry for showing him that there are "other people out there like him."
</p><p>
"Consumers can sniff you out," Pelliccione said. "So when we're talking about Revry's impact and mission, it affects revenue."
</p><p>
That mission and community focus, he said, is itself a competitive advantage.
</p><p>
"Netflix has way more market share," he said, "but we call it the Netflix paradox: they're focused on a horizontal, not a vertical. We have the ability to take risks, to push boundaries, and to effectuate that diversity, inclusivity and authenticity."
</p><p>
<a href="https://www.dekkoo.com" target="_blank">Dekkoo</a>, a subscription service founded in 2015 focused exclusively on content for gay men, sees its strength in controlling costs and appealing to a specific viewer.
</p><p>
"We're not really looking to have 100 million subscribers; our goal is to provide a service to a neglected audience," Dekkoo president and co-founder Brian Sokel told dot.LA. "Our size and scale means we have so little overhead that we're able to operate in this special universe and provide an add-on experience for the person who's a real connoisseur of gay cinema."
</p><p>
Sokel added that sticking to a subscription model rather than advertising helps his service remain true to its viewers. "(On advertising-based platforms), the content doesn't become the focus, the advertising does. We can just focus on the content," he said.
</p><p>
"There's not a chance that we'll go out of business," Sokel added, noting that Dekkoo has no debt and average monthly subscriber growth of 5-10% (which has increased of late because of COVID, he said). "We're going to be here."
</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzUxNjI0Ny9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1MTE5NTgwNn0.b6cCplfDD8Hs_1IpHc9F2Onc7IcKxHQ_PVRMbA77i28/image.jpg?width=980" id="584c2" class="rm-shortcode" data-rm-shortcode-id="ad0bb544e7656812278b50e06bd2bace" data-rm-shortcode-name="rebelmouse-image" />
</p><h2>A Question of Costs</h2><p>
Not everyone buys the logic that focus, authenticity and efficiency will enable niche services to survive.
</p><p>
Most niche services have a limited customer base. This puts a ceiling on their potential revenues and ability to pay for content.
</p><p>
Media analyst Matthew Ball <a href="https://twitter.com/ballmatthew/status/1253339237187031040" target="_blank">recently wrote</a> that "It's increasingly clear that (niche is) not going to work."
</p><p>
"The cost of content doesn't change based on whether the buyer is large or small, profitable or unprofitable, niche or broad," Ball told dot.LA. He argues that serving customer demand for a given niche is ultimately "a question of who can spend more on titles."
</p><p>
This math favors the more cash-rich, larger services, which Ball said already "are going after...niches and will service them well." In his thread, he points out that anime is appearing in non-niche libraries more often. For instance, <a href="https://www.crunchyroll.com" target="_blank">Crunchyroll</a>, a niche service for anime, is sharing more of its content with the recently launched HBO Max (Crunchyroll and HBO Max share the same parent company, WarnerMedia.)
</p><p>DC Universe, a streaming service devoted to the DC comics franchise (and also owned by WarnerMedia), has <a href="https://io9.gizmodo.com/one-of-the-best-streaming-services-is-dying-and-im-bumm-1844469228" target="_blank">increasingly been shuttling</a> <a href="https://culturess.com/2020/07/27/harley-quinn-animated-series-will-stream-on-hbo-max-this-august/" target="_blank">its content to HBO Max</a>. The service declined a request for interview. </p><p>
But Alden Budill, Crunchyroll's head of global partnerships and content strategy, told dot.LA that only a small percentage of Crunchyroll's content is available on HBO Max. She likened those titles to "gateway anime" likely to appeal to a broad audience, with the goal to attract new customers to the niche service.
</p><p>
"We see it as an opportunity to create visibility," she said.
</p><p>
That's a perspective shared by other niche services. Sriraman pointed out that BritBox benefits from having breakouts like "The Crown" on Netflix and "Downton Abbey" on Amazon, which serve as a kind of on-ramp for new consumers of British TV.
</p><p>
Ball, however, reached a different conclusion: "As Netflix pioneered + few once believed: (the) model is everything for everyone, always."
</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzUxNjI1Mi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwNzEzODU3MX0.kRercaWncSRHX93nKWVAO62wcML4KOne0jRJvMqhbUI/image.jpg?width=980" id="163e9" class="rm-shortcode" data-rm-shortcode-id="427629e48ecba8da416558f44ca87dbb" data-rm-shortcode-name="rebelmouse-image" />
<small class="image-media media-caption" placeholder="Add Photo Caption...">Dekkoo focuses on content for gay men</small></p><h2>Niche vs the Everything Model</h2><p>
<a href="https://www.chapman.edu/our-faculty/brett-danaher" target="_blank">Brett Danaher</a>, an economics professor at Chapman University who specializes in entertainment analytics, sees a case for both sides.
</p><p>
Generally, he says, the economics favor the everything-for-everyone model. The reason: bundling.
</p><p>
In an industry like entertainment, Danaher said – in which you might pay $5 to watch "The Irishman" but $10 to watch "Selling Sunset," and your friend would do the opposite – bundling those pieces of content together is the optimal business model. The more products in the bundle, and the more diverse those products are, the better, he added.
</p><p>
But there's an exception: <a href="https://dot.la/best-streaming-service-2646824325.html" target="_blank">"streaming fatigue."</a>
</p><p>
Because Netflix, Hulu, Apple TV+ and other streaming titans are battling for content – each claiming some, but not all, of what viewers are looking for – a fan of a given niche may grow exasperated by the difficulty of actually finding it.
</p><p>
"A niche service could be the solution," Danaher said – provided three things are true.
</p><p>
First, he said, there must be enough demand for the content. If it's too niche, it'll be hard to generate enough revenue to cover the costs of acquiring and/or producing titles – which Sriraman said tend to grow over time.
</p><p>
Second, to serve as an antidote to streaming fatigue, consumers have to feel the service provides the "majority of the content within that particular niche," Danaher said. This doesn't mean the niche service must be the exclusive provider of that content, though.
</p><p>
Lastly, Danaher said that for a niche service to succeed, content creators must see value in having their material on the platform. Otherwise, they could decide to sign an exclusive deal with another, larger service, leaving the niche service with an insufficient catalog.
</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzUxNjI1OC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwMTI2ODU4Nn0.xGErxtsfLQBgqlEIrbFurqoiNQUIdQ6ToKyClEoR8M4/image.jpg?width=980" id="5a53a" class="rm-shortcode" data-rm-shortcode-id="712e316888e22c02aded26b03cf3a751" data-rm-shortcode-name="rebelmouse-image" />
</p><h2>The Creator's Leverage</h2><p>
To that point, Budill of Crunchyroll said that anime-makers recognize how her service has attracted a legion of loyal fans, <a href="https://www.crunchyroll.com/anime-news/2020/07/28/crunchyroll-crosses-three-million-subscribers" target="_blank">recently surpassing 3 million subscribers</a>.
</p><p>
"If you are a creator seeking to reach a critical mass of authentic anime fans, we believe that we've demonstrated that we can be trusted," she said.
</p><p>Sokel, too, said Dekkoo is "very valuable to a filmmaker: They can make a video and say, 'How does anyone find my film on Amazon? How much money do I have to spend to get people to find it?' Whereas they know that with Dekkoo, if they've created a film that would be of interest to gay men, there's no better platform for a specific audience that wants to see your film."</p><p>The big platforms' data-rich algorithms are meant to help viewers find content suited to their tastes, but Danaher notes they have shortcomings.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzUxNjI2OS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwMjI5NDQ3NX0.VysIK_dno84a9jC8VZDLM2fyVh62zUsIK6oXvcVxiSU/image.jpg?width=980" id="5cfea" class="rm-shortcode" data-rm-shortcode-id="1e321f61566d35f33f18728df633f695" data-rm-shortcode-name="rebelmouse-image" />
<small class="image-media media-caption" placeholder="Add Photo Caption...">Alden Budill, Crunchyroll's head of global partnerships and content strategy.</small>
</p><p>"Each service only wants to write an algorithm to recommend to you content that is on their service, rather than actually the best piece of content. So the ability of algorithms to help you find the content within a niche is limited by how much content that service actually has within that niche," he said. Conversely, he continued, so long as a niche service meets those three conditions, "they are both able and incentivized to develop an algorithm to point you to the best piece of content within that niche for your preferences. And, you know it's right there for you to watch. This is the best argument I can come up with for niche services to survive."<br/></p><p>
Having support from a bigger corporation makes a difference, too. Sriraman points to BritBox's mutually beneficial relationship with its owners, BBC Studio and ITV, two of the biggest producers of British programming. Likewise, Crunchyroll's backing from WarnerMedia could strengthen its chances.
</p><p>
Another possibility for a niche streaming service is being acquired by a heavyweight hunting for content.
</p><p>
Pelliccione said Revry has already turned down two acquisition offers, information he says he's never shared with a publication.
</p><p>
Sokel said, "I think there's logic behind coming in and buying a company like ours. A major player could look at Dekkoo and say they serve this market, why not just acquire them? (Especially since we're) cash positive and no debt. But we don't chase that."
</p><p>
Given the many factors that will determine the fates of niche services as the streaming wars rage on, there appears to be just one obvious answer for now: we'll have to keep watching.
</p><p>---</p><p><em>Sam Blake primarily covers entertainment and media for dot.LA. Find him on Twitter @hisamblake and email him at samblake@dot.LA </em><br/></p>From Your Site Articles
- Fiction Riot Raises $250,000 to Build Mobile Content Service - dot.LA ›
- Spotify Earnings: The Music Streaming War Is Heating Up ›
- Peacock, NBCUniversal's Streaming Service, Takes Flight - dot.LA ›
Related Articles Around the Web
Read more
Show less
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.
<p>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.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzMyNDE0MC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY2MjkyNzA2NH0.JvNS8VgYwT5JyHQC4bdbarHnBCdLl48LQd6GLRUWoFk/image.png?width=980" id="c45c9" class="rm-shortcode" data-rm-shortcode-id="7a619d150377d30cb6a0d5d5e81fee21" data-rm-shortcode-name="rebelmouse-image" />
<small class="image-media media-caption" placeholder="Add Photo Caption...">HBO Max launches with over 10,000 titles across a range of content brands</small></p><p>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. </p><p>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.<br/></p><p><strong>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?</strong><br/></p><p><strong>Goncalves:</strong> 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.</p>
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzMyNDE0Mi9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY0MzIxMjg3MX0.OL5lH_Nx_6c3VmRnMmzxs1FvKNJU27oVSDclQRWehL8/image.png?width=980" id="c2503" class="rm-shortcode" data-rm-shortcode-id="d543cb28f2246f86f37242d48b8bfe3c" data-rm-shortcode-name="rebelmouse-image" />
HBO Max users will be able to browse by "hub"
<p><strong>Lyons</strong>: 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.</p><p><strong>Goncalves</strong>: 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.</p><p><strong>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?</strong></p><p><strong>Goncalves: </strong>If there were a formula, I'd be happy to walk you through that. But the reality is we had to </p>
<p>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.</p><p><strong>Lyons</strong>: 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. </p><p><strong>How do you approach the role of original versus licensed content?</strong></p><p><strong>Goncalves</strong>: 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.</p><p><strong>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?</strong></p><p><strong>Goncalves</strong>: 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.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzMyNDE0NC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYxNjI0NTkyN30.nmh-z6jHH0zqcfqohs_Hr4JP7WIV2DrZ4K_0nYQTVTc/image.png?width=980" id="79dd9" class="rm-shortcode" data-rm-shortcode-id="5b564938427e16eb6f09a74b2ae78b59" data-rm-shortcode-name="rebelmouse-image" />
<small class="image-media media-caption" placeholder="Add Photo Caption...">Tony Goncalves oversees HBO Max and is also CEO of Otter Media</small></p><p><strong>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?</strong> </p><p><strong>Goncalves</strong>: 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. </p><p><strong>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?</strong></p><p><strong>Goncalves</strong>: 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.</p><p><strong>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?</strong> </p><p><strong>Goncalves</strong>: 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.</p><p><br/></p><p class="shortcode-media shortcode-media-youtube">
<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="e22e632f9124627881c42e73cc3e02ca"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/iS8hHeKS178?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span>
<small class="image-media media-caption" placeholder="Add Photo Caption...">HBO Max vs. HBO Go vs. HBO Now | Explainer Video</small>
<small class="image-media media-photo-credit" placeholder="Add Photo Credit..."><a href="https://www.youtube.com/watch?v=iS8hHeKS178" target="_blank">www.youtube.com</a>
</small>
</p>From Your Site Articles
- hbo-max - dot.LA ›
- The End of Hollywood As We Know It? - dot.LA ›
- John Stankey Takes Control of AT&T Ahead of HBO Max Launch ... ›
- As the Streaming Wars Heat Up, Why Are Consumers Losing Out? - dot.LA ›
Related Articles Around the Web
Read more
Show less