So, what’s going on? The media landscape is decidedly different from the early days of the pandemic, and HBO Max remains in flux.
There’s a myriad of reasons why HBO Max is removing shows like “Generation,” “Infinity Train,” “Vinyl,” and “The Not-Too-Late Show with Elmo.”
But it breaks down to three key areas: cost-cutting, a shift in the overall content strategy and ridding the service of content that subscribers weren’t watching.
Wait, cost-cutting? Doesn’t HBO Max own this content?
Just because content lives on a service doesn’t mean that it’s free after sunk costs.
Streaming services still must pay residuals to casts and crews of a production, and those costs pile up. HBO Max will save “north of $100 million annually” after removing the shows, according to a source familiar with HBO’s decision.
“Keeping titles on a platform comes with a cost,” Julia Alexander, director of strategy at Parrot Analytics, told CNN Business. “Does a title bring in more value to the platform than its cost? If the answer is no, and especially if that title is a low engagement title, which many of these are, then removing titles can benefit a company’s bottom line.”
But isn’t the whole point of streaming to be “everything in our catalog?”
Streaming has trained consumers to believe that everything will be available forever on a service, especially original content. That’s not always the case.
Other services pull content from their libraries too. It’s a part of the business.
What does Warner Bros. Discovery have to say about this?
“As we work toward bringing our content catalogs together under one platform, we will be making changes to the content offering available on both HBO Max and Discovery+,” a HBO Max spokesperson told CNN Business. “That will include the removal of some content from both platforms.”
Didn’t HBO Max cancel “Sesame Street”? I think I read that somewhere
Why did it do that? I thought streaming services wanted more kid’s content, not less?
Kids’ programming is vital to the health of any streaming service, but it requires a big investment, according to Alexander.
“Being invested in kids programming, especially live-action, means being all in,” she said. “You can’t just have a couple of shows and hope that suffices. It requires a multi-year plan.”
Ultimately, HBO Max wants to focus more on strengths like HBO’s adult dramas and films at Warner Bros., but it will probably reinvest in children’s content again at some point.
What does this mean for the future of HBO Max?
Time will tell.
David Zaslav, the new CEO of Warner Bros. Discovery, is focused on making money from traditional revenue streams like TV ad revenue, cable fees and box office totals as well as streaming. This is a shift from his predecessor, Jason Kilar, who bet that the future was in streaming and put most
iof WarnerMedia’s eggs in that basket.
The streaming world is evolving, and everyone is still figuring out its future.
“It’s not a game of Kilar was right and Zaslav is wrong, or Zaslav is right and Kilar is wrong. It’s a matter of prioritization,” Alexander said. “The future of streaming is still being determined, but it is fundamentally where everything is headed.”
Cable is declining while broadband is expanding and the future of streaming will not be one size fits all, she added.
“It’s a premium service like HBO Max on top of free ad-supported platforms like Pluto TV, on top of licensing shows to other players in the streaming and linear space,” Alexander said. “And it’s in conjunction with theatrical releases — not a total replacement of it.”
Consumer choice will have a large part of deciding what the next era of streaming — and thus HBO Max — will be, she said, adding that “the audience is, and has always been, king.”