Well, maximizing revenues are what successful businesses do. So I don't see how you can fault AT&T with trying to do that with their media properties like HBO Max.This just feels like another AT&T muck-up of an acquired entertainment property. Their clumsy, idiotic and tone-deaf attempts to maximize monthly and quarterly revenues are at work again. They are hell bent on creating an ad-supported service that no creator of HBO original content wants sullied with ads and no advertisers seem interested in running their ads inside of The Sopranos or The Deuce. Seems like the only thing that will be accomplished here is alienating content creators from wanting to work with HBO in the future if their output will eventually be stuffed with unwanted ads.
If they want to increase the user base and ultimately profitability of HBO Max, how about prioritizing 4K HDR support to the stellar back catalog of HBO and Warner content? And perhaps getting deals in place with Roku and Amazon would help? They might find that there are 80 million users of those two platforms that might actually prefer paying for a premium 4K HDR ad-free experience if you just allowed them to.
The future of video entertainment, like the present, will be both ad-supported and ad-free. I think some folks wrongly assumed that because Netflix is ad-free that all streaming video in the future would be ad-free. But lots of people will willingly watch a certain amount of ads in exchange for video that's free or reduced in cost. YouTube and Hulu have proven this. Peacock is going hard in the ad-supported direction. IMO, Netflix is leaving money on the table by not doing what Hulu does and offering a lower cost version of the service with a limited amount of ads.
So I can understand WarnerMedia realizing that, in order to reach as many subscribers as possible and maximize revenues and profits, they need a lower-cost ad-supported play. The problem, though, is that they're trying to build their one major mainstream service around the premium, ad-free HBO brand. HBO Max has the premium HBO content at its core and then supplements that with other stuff -- it's sort of the streaming version of getting HBO plus a few basic cable channels. Except, right now, all of it is ad-free.
They could have instead gone the route that ViacomCBS is going; they have a mainstream "basic cable" type of service in the form of CBS All Access that can be had either with or without ads. And then they continue to run their premium service, Showtime, as a separate thing, always ad-free. And if you subscribe to both together, you get a bundling discount.
But how much excitement and subs would WarnerMedia have gotten if they launched "Warner Max" as a separate service without any of the HBO stuff? And could they have forced their HBO distributors to have included access to it for free along with an HBO subscription? And since it would have been a separate app from HBO Go/Now, would those 35 million HBO subs have even bothered to use the new Warner Max app? Because of the success of HBO, both in terms of brand equity as well as distribution penetration, you can see why they chose to simply build on it as their sole major streaming service.