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State of the Screens

HBO MAX Reels In More Subscribers Than Expected

By April 29, 2021No Comments

Kong vs. Godzilla

HBO Max subscribers by quarter (YoY growth):
1) 2020-Q1 – 33.1M
2) 2021-Q1 – 44.2M (↑ 34%)

HBO Max and HBO Subscribers

Flashback #1: Did Snyder’s Justice League Save The Day For HBO MAX?

Flashback #2: How Is HBO MAXimizing Growth?

U.S. average revenue per user (ARPU) by streaming service according to Variety:
1) Netflix – $14.25
2) HBO Max – $11.72
3) Disney+ – $4.72

Why this matters: HBO Max may be growing slower than Disney+, but it is important to remember they are charging close to 3X.

FYI: The ad-supported version of HBO Max will launch in June.

Key details for HBO Max advertising:
1) Launching in spring 2021
2) 2 minutes/hour for movies
3) 4 minutes/hour for TV shows
4) ≈ $80 CPM
5) $250K quarterly commitment

Big question #1: How does this ad load compare to other offerings?

Ad minutes per hour:
1) Linear TV – 16 – 20
2) Hulu – 9
3) Digital video – 8
4) Peacock – 5
5) HBO Max – 2-4

Big question #2: Why does HBO Max want ads?

Quick answer: Advertising will increase the average revenue per user (ARPU) beyond the $15/month subscription.

Quick math on the advertising model for HBO Max:
1) Ad minutes/hour – 3
2) 30s spots/hour – 6
3) CPM $ – ≈ $80
4) $/spot – $0.08
5) Ad revenue/hour – $0.48

How HBO Max could Make Money

Dive deep: What Does HBO Max’s Launch Mean For Convergent TV?

Podcast: WarnerMedia’s CEO says that in 2022 his movies will debut in theaters before they stream

WarnerMedia CEO Jason Kilar on a wild first year on the job

Video: WarnerMedia CEO Sees Big Year Ahead on HBO Max and in Theaters

HBO Products Reach 44.2 Million Domestic Subscribers

More #1: Was ‘Zack Snyder’s Justice League’ a Hit for HBO Max? Here’s What the Data Says.

More #2: The home of the Sopranos is under siege: Inside the battle for the soul of HBO

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.

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