Andy Forssell on HBO Max's First Year

The Fortuitous Launch of HBO Max Amidst a Pandemic

The timing of WarnerMedia’s launch of HBO Max proved remarkably opportune. While no one would wish for a pandemic, the onset of COVID-19 and subsequent curfews and lockdowns across the United States coincided with the streaming service’s debut.

A Competitive Landscape

The service appeared well-positioned within a crowded streaming market, featuring established platforms like Netflix, Hulu, Amazon Prime Video, and Disney+. HBO Max distinguished itself by offering decades of critically acclaimed television series, including iconic shows such as “The Sopranos,” “The Wire,” and “Game of Thrones.”

Furthermore, the platform secured valuable acquisitions, notably the complete libraries of “Friends” and “South Park.” A substantial catalogue of 1,300 films and television series originating from CNN, TNT, TBS, truTV, Cartoon Network, and Adult Swim supplemented these offerings.

WarnerMedia also contributed perennial favorites like the Looney Tunes shorts and the entire collection of DC Comics films and television programs. At its launch, HBO Max boasted a total of 10,000 hours of movies and TV content.

Lessons from Streaming Failures

However, the failure of platforms like Quibi demonstrates that substantial financial investment, celebrity endorsements, and experienced leadership do not guarantee success in the streaming industry. The streaming landscape is marked by numerous failed ventures, despite good intentions and significant budgets.

Initial Challenges and Course Correction

HBO Max’s initial rollout wasn’t without its difficulties. The launch was delayed, there were changes in executive leadership, and the service encountered obstacles in negotiating agreements with platforms like Roku and Amazon. Nevertheless, the service ultimately overcame these hurdles.

By October, HBO Max had reached 38 million subscribers, encompassing those with access through their existing HBO or cable subscriptions. In July, Warner announced a combined total of 67.5 million subscribers for HBO and HBO Max (with 47 million in the U.S.), with a target of 70 to 73 million by the year's end.

Subscriber Numbers and Industry Comparison

These figures are somewhat complex due to the relationship between HBO Max and HBO. While WarnerMedia acknowledges that HBO Max’s subscriber count doesn’t yet match Netflix’s 209 million global subscribers (66 million in the U.S.), Netflix benefits from a 13-year head start and extensive international expansion.

Executive Restructuring Prior to Launch

Approximately a year before launch, a restructuring moved Otter Media (acquired in 2018) from Warner Bros. to WarnerMedia Entertainment. Otter CEO Tony Goncalves and COO Andy Forssell accompanied the brand to oversee the HBO Max launch.

Insights from Andy Forssell

Forssell, who also serves as HBO Max’s head of business operations and EVP/GM at WarnerMedia, participated in TechCrunch Disrupt 2021 to discuss the service’s first 17.5 months. He conceded that the pandemic presented unique challenges, stating, “We, along with everyone in the industry, learned to adapt.”

He added, “The transition to remote work was challenging, but I believe we managed it better than anticipated, especially considering we were in launch mode.”

The Pandemic's Impact on Content Consumption

The pandemic fundamentally altered how audiences consumed media and how studios released content. The practice of releasing films simultaneously in theaters and on streaming platforms, once considered improbable, became a necessity as theaters remained closed.

“We’ve seen day-and-date theatrical releases, which is an exception for this year. However, in 2022, release windows will be shorter than they would have been without the pandemic,” Forssell explained. “It accelerated experimentation, which ultimately benefits viewers, and moved us forward by a couple of years in terms of adapting to change.”

Day-and-Date Releases and Film Premieres

This shift proved beneficial for streaming services. “Wonder Woman 1984” premiered simultaneously in theaters and on HBO Max on Christmas Day. Since then, the service has released approximately one film per month using the same model, including “Godzilla vs. Kong,” “Judas and the Black Messiah,” “Mortal Kombat,” and “Space Jam: A New Legacy.” “Dune” and “The Matrix Resurrections” are also slated for release later in the year.

The Future of Film Releases

Forssell anticipates that the pandemic will reshape how studios approach releases. “I believe theatrical and streaming releases will coexist. I’m optimistic that audiences can still experience the grandeur of a big film while having multiple viewing options. Viewers will decide, using their clicks and ticket purchases. Theaters will thrive, and streaming video on demand (SVOD) will thrive alongside them, with consumers determining the evolution over the next decade.”

Controversies and Legal Disputes

However, not all stakeholders are pleased with this arrangement. Actress Scarlett Johansson filed a lawsuit against Disney in July over the streaming release of “Black Widow,” alleging breach of contract. Her attorney stated, “This will surely not be the last case where Hollywood talent stands up to Disney and makes it clear that, whatever the company may pretend, it has a legal obligation to honor its contracts.”

Creator Concerns and Industry Resistance

Similarly, Sopranos creator David Chase expressed “extreme anger” regarding the streaming debut of the prequel, “The Many Saints of Newark,” stating he wouldn’t have accepted the job had he known about the day-and-date release. He described the decision as “awful.”

Forssell responded, “David has every right to his opinion. As I understand it, his concerns arose during our initial announcements, when changes were happening in the industry. There was natural resistance and understandable worry about the implications. However, I’m not directly involved in those discussions and respect David’s right to express his views.”

Addressing Technical Issues and Platform Improvements

The streaming service has also faced technical challenges. Earlier this month, HBO access through Amazon’s Prime Video Channels was discontinued, with a limited-time 50% discount offered to encourage users to switch to Max. Forssell explained that this decision was driven by the need for real-time access to viewer metrics.

“We need to see in real time whether we’re serving our customers well and react quickly. That’s the dynamic we have,” he said. “Participating in a model like Prime Video Channels prevents us from doing so, as we lose that visibility. They provide some data, but with a significant delay.”

Furthermore, the Roku app has been plagued by widespread glitches. To address this, HBO Max acquired You.i last year to enhance its technological capabilities. “The new Roku app is fantastic and works much better than the old one. It’s the beginning of using this new technology. PlayStation will roll out today, and by the end of January, we will have replaced every app on all of our connected TV devices with completely new technology that we’ve been working on for the last year. The new Roku app is very stable, with few crashes.”