It’s Just “Max” Now, RSNs Bumpy Road To Streaming
1. It’s Just “Max” Now
Millions of “Disco Bros” fans are bound to be disappointed by news that the probable new name of the HBO Max/Discovery+ collab is going to be “Max.” (There’s a pesky bit of business about a pharma company that owns the rights to the Max URL that needs to be dealt with first.)
Still no word on pricing, or what happens to all those Discovery+ subscribers who were happily paying $5/month for the ad-supported version. Will they be grandfathered into the new app, and if so for how long?
It seems there was also much debate on the wisdom of removing “HBO” from the app’s name, given that it is such an iconic brand.
But I think that moving away from HBO is the right move, especially now.
Why It Matters
HBO has been around for close to 40 years and the service has not changed dramatically since the early 00s when it became the home of “quality TV.”
And that’s the thing.
People have had almost 20 years to decide whether HBO and its style of programming is for them. At its peak, the service had around 40 million subs—roughly 35 million via MVPDs and 5 million via its standalone HBO Now app.
Which means that all those other people had decided that HBO was not for them, and so having the name front and center is not going to help lure them in the way that having Discovery and similar less highbrow content will.
As noted here previously, there are a whole lot of people who don’t really get why Bill Hader’s show Barry is supposed to be funny. I mean he kills people, right?
In addition to there being a limited audience for that type of programming, there’s also a whole swath of other streaming services all cranking out HBO type shows. So that the audience has come to think of them as “streaming type shows” not “HBO type shows” which further dilutes the appeal of having HBO in the name.
Finally, there’s the fallout from the massive confusion AT&T spawned when trying to roll out HBO Max, with multiple variations of HBO-branded apps scattered about—HBO Go, HBO Now, HBO-not-Max, HBO on your cable program guide…
So there will be real value in not having yet another HBO-named app.
From a content perspective, it will be interesting to see what is included. How much CNN (if any) makes it in, will there be any pickups from TBS and TNT—that sort of thing.
I’ll also be looking to see if Discovery+’s linear channels make the migration over. I strongly suspect that they will and that Max will have even more linear channels for its library content.
That’s a trend we first noted in our recent report FASTs Are The New Cable, and the consensus seems to be that all of the remaining big SVOD services will soon roll out linear channels too, joining Discovery+, Paramount+ and Peacock.
Consumers seem to like them, they are a great way to surface library content, and, if you are running advertising, they increase time spent on platform.
They also cut down on decision paralysis, or, to paraphrase something I’d heard from a number of executives, “Why would I make someone who likes watching The Simpsons pick an episode every time they turn on the TV when I can just give them a Simpsons channel?”
So there’s that too.
What You Need To Do About It
If you are WBD, the launch of the new app is a great time to pick up new subscribers and retain old ones.
Given that there aren’t that many Discovery+ subs, maybe grandfather them in for life at the OG price, provided they don’t give up the subscription.
As far as price, the key here is do no harm. Given the wide range of programming options you have on offer, you have a great argument that you are one of the only apps someone needs. Now sell it at a price point that doesn’t scare people off of that proposition.
Keep up with the bundling deals (e.g., Amazon) and specials that lock people in for a year or more. Your ad sales teams will thank you.
Remember that interface is key and that the number one issue people have with streaming apps is discovery (lower case “D”) —they can never find the shows they want. Solve that and you will have subscribers for life.
Get some live sports rights too. Nothing creates stickiness like live sports, plus all those ad-free subscribers have to watch ads during sporting events, so it increases your audience, something that is going to prove to be very important, especially if not all that many people switch over to the ad-supported version.
Finally, you’ve been on a roll with programming, keeping the HBO legacy alive. Keep that up—even if a big chunk of your potential audience doesn’t get why Barry is funny, buzzy shows like Succession and White Lotus gets you the sort of free marketing that builds empires.
2. RSNs Bumpy Move To Streaming
As has been noted here many times, in the grand scheme of things, regional sports networks (RSNs) are in many ways far more important to the survival of the TV industry than big deals like NFL rights.
Not that the latter is unimportant, it’s just that RSN fans tend to be hardcore.
They are fans of a particular pro baseball, basketball or hockey team and will gladly pay to watch every single game their team plays. This makes them a very valuable subscriber base, as they are highly unlikely to churn. At least not during the season anyway.
Which is why we’re watching two developments this week.
On the one hand, Diamond, the company that’s running Sinclair’s RSN’s and moving them all to streaming apps has been doing its best to disassociate itself with Sinclair and the $9.6 billion in debt it went into to acquire said RSNs.
On the other, NBCU seems ready to move its five RSNs onto Peacock and has been busily negotiating those deals.
Two steps forward, one step back.
Why It Matters
Let’s look at the two deals in question first.
It seems that MLB teams in particular are somewhat leery of Sinclair, given that they are so deep in the hole. The fear being that Sinclair will make irrational moves in order to guarantee profitability. Irrational to MLB owners, anyway.
While there is a new CEO at Diamond Sports, the company that runs the streaming partnership between Ballys and Sinclair, it’s unclear if that alone will result in happier MLB franchise owners. Yes, the new CEO, David Preschlack comes from NBC and is not beholden to Sinclair, but it’s sort of hard to ignore all that debt.
That said, if anyone needs to reach a new audience via streaming it is Major League Baseball, so perhaps turning a blind eye is a smart move after all, especially since the Bally RSNs are only $20/month, making them accessible to younger fans.
On a brighter note, NBCU is moving its five major market RSNs - two in Northern California, plus Boston, Philadelphia and Chicago—over to Peacock.
This is a great move for all parties involved (detailed explanation here).
The teams in question get a way to reach younger audiences who won’t need to pay over $100/month for cable just to get the RSN (Peacock will be just $10/month) while Peacock gets a whole bunch of new subscribers who are unlikely to churn and, like swallows to Capistrano, will return at the start of every season even if they do.
The RSNs are also good for NBCU’s ad sales team, because even though fans are subscribed to the ad-free version of Peacock, they will still see ads during the games.
So a win all around, unless, of course, you are one of the MVPDs who carry those RSNs, which, by all accounts, are the reason many of those fans still pay for cable.
What You Need To Do About It
If you are Major League Baseball you need to do everything you can to bring in younger fans. Baseball is increasingly viewed as old-school (and not in a good way) so you need to meet that younger audience where they live. Even if it means overlooking the potential impact of all those billions of Sinclairian debt.
If you are NBCU, well done. Not only for all the reasons noted above, but because RSNs are very much in keeping with NBCU’s brand.
If you are the remaining RSNs, streaming is where everything is going. If you don’t want to go the switchover alone, I suspect you will have no shortage of potential partners, including almost all the big SVOD services and FASTs. Just remember, the longer you wait the harder it gets.
Finally, if you do launch a streaming RSN, remember that there are a whole lot of cool things you can do that take advantage of the fact that streaming is digital and interactive.
User experience matters.
