The MAX Streaming Buffet Is Open

What would happen if Walmart found a way to sell Giorgio Armani dresses alongside its mass-market Time & Tru skirts and T shirts?

This mashup of a prestige and mass consumption just happened with the official launch of the new Max streaming service from Warner Bros. Discovery. Starting May 23, Max will combine content from HBO Max and Discovery+ into a single (blandly named) New Hollywood streaming service. 

Oh, and the HBO Max name is going away. HBO Max content such as “Succession” will now be available alongside mass market offerings such as “Dr. Pimple Popper.”

This is happening because Warner Bros. Discovery believes scale is the only way to win the New Hollywood streaming wars. To achieve scale, the company believes it must appeal to the widest possible audience by creating a mishmash of content. Warner Bros. Discovery seeks to reach 130 million subscribers by 2025 (versus about 100 million now, compared to 230 million for Netflix).

But why kill the HBO name, arguably one of the most recognizable and valuable brands in entertainment? It’s all about the kids. In announcing the newly named service, JB Perrette, president and CEO of Warner Bros. Discovery’s global streaming and games, said, “We want [Max] to be welcoming to all and easily recognizable, including to a key customer segment, kids and families. We all love HBO. And it’s a brand that has been built over five decades to be the edgy, groundbreaking trendsetter in entertainment for adults. But it’s not exactly where parents would most eagerly drop off their kids.”

In the words of Mary McNamara of The Los Angeles Times, the decision results in HBO, the crown jewel of any media empire, being tossed “onto the ‘75% off’ table.” 

That said, here’s what I like about Max:

1. Scale. Max delivers what streaming services promise but seldom really offer: a buffet of content. This assumes Warner Bros. Discovery has the budget to sustain that scale. Time will tell.

2. Flexibility. Max offers three tiers, including an ad-supported option. Consumers want choice, as Reed Hastings said when Netflix embraced advertising. 

Max also faces some big challenges out of the gate including:

1 Max is a no-name brand. And Warner Bros. Discovery just killed a brand that would have provided instant cachet. This is especially problematic given how saturated the streaming industry is. 

2 Disney+ already has a head start on Max in the quest to appeal to a wider audience. Disney+ is building content that appeals to kids and grown-ups alike. And Disney+ has a brand. Max does not.

But Warner Bros. Discovery also enjoys a potential advantage: a willingness to exhibit movies in theaters for periods of time before streaming. In 2022, when the Warner Bros. Discovery Inc. merger was announced, Chief Executive David Zaslav said, “We are not trying to win the direct-to-consumer spending war.” The company resisted the popular trend of taking movies directly to streaming amid a pandemic-era decline in moviegoing. Instead, he actually increased the number of theatrical releases for the company’s movies. 

He reasoned that movies in theaters would create buzz for their eventual streaming release while making box office revenues at the same time. “There’s an ecosystem of economic return when you open something in the theaters,” he said during an analyst conference in November 2022. 

For instance, the WarnerBros. movie Elvis was a smash in theaters before going to HBO Max, where it also proved to be popular. A number of films by rivals have enjoyed huge, extended, box office runs followed by successful streaming premiers in 2022:

The Batman earned $750 million globally before Warner Brothers premiered the film the HBO Max streaming service. The Batman then enjoyed a first-week viewership of an estimated 4.1 million households (per Samba TV) – the second best first-week for a theatrical release on HBO Max.One of the biggest movie success stories of 2022 (or any year), Top Gun: Maverick, took seven months to arrive on its studio’s streamer (Paramount+), which didn’t stop it from immediately becoming the service’s No. 1 offering.Black Panther: Wakanda Forever banked $842 million globally during an 82-day run in theaters – and then became the most-watched Marvel premiere on Disney+ based on hours streamed within the first five days. 

Meanwhile, audiences seem to be returning to theaters. Domestic box office totals as a whole are indeed showing signs of an emergence from the depths up the pandemic. To date, domestic box office sales are up 37.6 percent over 2022, according to Box Office Mojo. And although domestic box office is down 16.6 percent compared to 2019, the drop is much less than the disastrous decreases of 35.6 percent (2020), 87.8 percent (2021), and 39.4 percent (2022). 

And according to a new report from UTA IQ, two-thirds of Americans say the length of time from a movie’s release in theaters to its availability at home has little or no impact on their decision to see a movie in theaters. Only 33 percent of the movies respondents said they had most recently seen were original films made for streaming platforms. 

About 75 percent of respondents said they plan to maintain or increase their moviegoing pace in 2023. Only 28 percent said that having access to enough movies at home is why they are going to the movies less often or not at all.

Amid the criticism and ridicule of MAX, WarnerBros. Discovery might be laughing its way to the bank.