To the Max: New HBO home sets target

A week away from launch, new streaming service Max has revealed its launch strategy as it sets an ambitious growth target in an already saturated market.

A production still from season 2 of The Last of Us, a recent HBO hit.

Australians who subscribe to more than 25 million streaming video services have another decision to make after March 31 — to add the new streaming platform Max to their home entertainment package, or live without it.

Some of Max’s competitors are predicting the latter, claiming parent company Warner Bros Discovery has spent too long pondering an Australian launch.

In an interview with The Australian, Michael Brooks, general manager ANZ for Warner Bros. Discovery, says that assessment is wrong. Mr Brooks stressed Australia had always been a key focus as WBD grew its global streaming business, and noted WBD content had always resonated well with Australian consumers, and detailed an ambitious growth target.

Max is the new home of HBO in this territory, with all but a handful of titles being removed from the Foxtel and Binge platforms at launch.

One reason the launch is happening this month is the timing of those expiring licensing deals. WDB is a key supplier of programming to cinema chains plus TV and streaming platforms.

“Obviously we’re late to the party but we feel we’ve got a last mover advantage,” Mr Brooks said. “We’ve been able to watch how the streaming landscape has developed here over the years.

“We’ve seen where streamers have been successful. We’ve seen the missteps. We’ve been able to learn from those...”

Max is available in 72 other markets. “We have taken all those learnings to build this bespoke model that has been adapted for Australia,” Mr Brooks said.

He admitted Australia had been “saturated” with SVOD plays with a market penetration of about 85 per cent.

Considering a joint venture for this market was not a real option, Mr Brooks added.

“Everyone’s looking at every opportunity but I can’t stress how important Australia is in terms of our global rollout plans. It’s an English-speaking territory, and it is a big consumer of our content — all key metrics for us (deciding) we were going to go it alone and launch in this market,” he said.

Warner Bros. Discovery general manager Australia and New Zealand Michael Brooks. Picture: Supplied

At launch, Max will be made available at no charge to 1.4 million Foxtel customers with a set-top box. “We’ve had a 20-plus year relationship with Foxtel so it made sense for us to work together and to be our partner at launch. It’s good to have an initial audience that knows and loves our content,” Mr Brooks said.

To get the next million customers will be a challenge, with the Max ad tier perhaps the key attraction, he said.

“Pricing the ad tier at a competitive rate was very important for us,” he said. “We feel we’ve positioned it nicely against the competition. There was a huge amount of research that went into the pricing process.”

The research settled on a basic “with ads” tier priced at $11.99 monthly. A launch offer is available for $7.99 monthly. Despite reporting last year that the SVOD market was mature, research firm Telsyte noted there was still single-digit growth driven by ad-supported plans.

Telsyte analyst Foad Fadaghi told The Australian: “The hardest thing for any new player right now will be keeping the customer.

“A lot more consumers are managing their subscriptions month by month.”

Mr Fadaghi added the cost-of-living crisis made people cautious of taking another subscription while there are so many already in the marketplace.

The scope of WBD content available makes Mr Brooks confident the company will still run a successful content licensing business supplying other broadcasters as well as Max “without cannibalising or damaging our streaming strategy”.

For Max, Friends becomes a streaming exclusive from April 1 while Network 10 retains free- to-air rights. Subscribers to Stan and Netflix have one last chance to watch the classic US sitcom before the day Max launches, March 31.

Foxtel is shedding its HBO content, except for anything still dropping which premiered before the Max launch, which it will keep for 30 days. This includes The White Lotus, but it will also be available immediately on Max.

The biggest thing missing from the Max catalogue are any new Australian commissions. “Max will have local content, but not straight away,” Mr Brooks said. “First we want to really understand the viewing behaviour of our audience and then tailor local commissions.”

As to the debate around a quota system for Australian content on SVOD services, Mr Brooks said: “It would need to be fair and reasonable, flexible too.”

Max is hoping for a place among the biggest streaming services. “Our ambition is to create a product that eventually sees us as one of the top three that consumers are choosing,” Mr Brooks said.

Netflix is the clear market leader in Australia, followed by Prime Video and Disney+.

It’s going to take a subscriber base of three million to break into that pack and that could take some time, even with the Foxtel 1.4 million bump on launch.