December 10, 2019 4:00 pm

Will HBO Max’s content justify its highest streaming price point?

Will HBO Max's content justify its highest streaming price point?
HBO Max/Wikimedia Commons

HBO Max has an aggressive spending plan ahead of its May 2020 debut, but is its streaming-high price point of $14.99 per month merited by content abundance?

Well, that’s at least the assumption AT&T president John Stankey is operating under. He spoke Tuesday at the UBS Global TMT Conference, and stated HBO Max would have twice the content of Disney+ (h/t Cord Cutters News).

Standing out from the pack

Among the recent streaming giants to join the market, there have been varying strategies. Of course, it takes a big initial investment just to be relevant — and so far, no one’s holding back.

Apple TV+ went in big with original content, putting out a whopping eight series of its own. That’ll appeal to TV consumers, yet there’s an absence of a movie back catalog.

Disney+ went light on original programming, yet Star Wars’ The Mandalorian makes up for any lack of quantity. Plus, Disney has original animations, Pixar and Marvel back catalogs in addition to Star Wars.

HBO Max’s content strategy isn’t resting on any laurels, even though it could. HBO has housed many an iconic TV show. However, WarnerMedia has snatched up preexisting IPs, signed J.J. Abrams to a reported $500 million exclusive deal and will invest heavily in new programming.

About that pricey price point

Stankey defended HBO Max’s market-leading price point, compared to Disney+’s generous $6.99 per month deal:

“Disney was kind of like about half of the content of what we have at half the price…I was listening to feedback after the investor day and there’s a continuum. There are some who have said, ‘too cheap,’ some who have said ‘just right’ and some who said ‘too expensive.’ That tells me we probably found a good place to start.”

Cord Cutters News

Anyone who loves HBO already should be on board with the new streaming service. Also, the HBO Max price point isn’t high above Netflix’s most popular plan of $12.99 per month.

On the other hand, Netflix has been the lead streaming host for a long time. The company has steadily raised prices over a period of years, so it’s a bold move for HBO Max to come out over the top.

But Stankey’s justification makes a lot of sense in the context of Disney+. Lack of original programming is clearly one of the Mouse House’s shortcomings out of the streaming gate.

Blending cutting-edge with classics

But wait — there’s another way HBO Max stands out from the pack by way of a deliberate strategy not before seen among its streaming competitors. In addition to its own content, HBO Max is appealing to an older demographic by bringing in classic films to its epic catalog.

During its big media day, HBO Max announced some particularly appealing films that’d be part of its classic content collection:

It can be hard to find vintage, high-quality versions of these films. Plus, the collector’s additions tend to fetch more expensive price tags. HBO Max will likely cycle out throwback movies to keep subscribers on their toes, yet there’s big potential for the brand there.

The risk is high to start with $14.99 per month. It’s on that demanding price tag HBO Max projects to turn a profit all the way off in 2025. Given the goods Stankey promises to deliver, though, it’s hard not to be lured in.

Placing such a premium on consumer needs could well indeed justify higher subscriber expenses. Then, perhaps a seemingly ominous HBO Max Streaming Wars forecast might brighten way up.
