As I recall, you forecast that HBO Max would retail at $17 to differentiate it from vanilla HBO and in recognition of the expanded content.
But given the reported launch price of $15, what are the odds that AT&T plans to phase out plain vanilla HBO altogether in favor of HBO Max? After all, unless the reported $15 price is just a teaser, what is the rationale for keeping the lesser HBO around? What will HBO offer that isn't contained in HBO Max?
Yeah, I think I was saying $16 for HBO Max bought directly from them, or maybe $17 bought through cable operator distributors (although the actual price would be up to individual distributors and could vary).
But to answer your question, I'm still sticking with the longer-term prediction I made, which is that regular HBO gets phased out over the next few years and completely replaced by HBO Max. Because there really isn't any rationale for keeping the original HBO product around if you're getting over twice as much content in HBO Max for the same price. As AT&T's CEO said, it's kind of an "IQ test" for consumers (i.e. only dummies wouldn't switch over from regular HBO to HBO Max).
I'll copy and paste in here the relevant bits from my predictions thread about HBO Max with my current thoughts/corrections inserted in green:
1Q 2020: HBO Max launches (excerpt)
Some major cable operators announce that they will cease selling new subscriptions to the traditional HBO service (typically at $15 a la carte) and will instead begin selling HBO Max, with some pricing it at $17 and others at $16. All their existing HBO subscribers, however, would be given the option of staying on the traditional service at current pricing.
(I now tend to think that if a cable operator amends their existing distribution deal with HBO, they'll simply stop selling regular HBO completely and switch over all their existing HBO subs to HBO Max, either at the same price or for $1-2 more.) Meanwhile, other cable operators declined to distribute HBO Max and said that they would continue selling only traditional HBO, with one cable operator immediately announcing a new lower $13/mo price point for it. Traditional HBO continues to be sold as a standalone direct-to-consumer service via HBO Now, as well as through streaming platforms such as Prime Video Channels, Apple TV Channels, and The Roku Channel.
3Q 2020: HBO Max adds live cable bundles
HBO Max begins offering add-on bundles of live cable TV channels, the same ones sold under the AT&T TV brand. While the AT&T TV app offers a more traditional cable box-like UI with a grid guide, etc., the HBO Max app has a more next-gen streaming UI akin to Hulu and Netflix.
(They're currently targeting this addition for 2021, so I was at least a couple quarters early in my prediction. Otherwise, I stand by it for now.)
4Q 2020: HBO Max introduces lower-priced plan with ads
HBO Max announces that their standard plan will remain ad-free at $16, but they will also offer a new $10 plan with targeted limited ads.
(The standard ad-free plan will be $15, not $16. Perhaps that means the plan with limited ads will also come in for a bit cheaper than I predicted at $10? Also, they announced that this plan won't come out until 2021, so again, I was a bit early.) It will include all of the same content, including in 4K HDR. While HBO-branded originals, as well as most children's programming and theatrical films, will remain ad-free, all other content (e.g. Max Originals; series from WarnerMedia basic cable channels such as TBS, TNT, and CNN; and past TV series from the Warner Bros. library) will contain ads. The new $10 plan only allows two simultaneous streams.
4Q 2020: HBO Now shuts down
WarnerMedia assured the public when they introduced HBO Max in early 2020 that the traditional HBO service would continue to be available through many cable providers, as well as directly from Warner through their own HBO Now service. But given that HBO Now remained priced at $15 while HBO Max was available as a standalone service direct from Warner for just $1 more
(nope, HBO Max is going to be the same price as HBO Now, $15!), but with a lot more content (and marketing power behind it), the subscriber base for HBO Now plummeted, as Warner desired, with the vast majority migrating over to HBO Max.
So on Dec.1, HBO Now notified its subscribers that the service would shut down at year-end, with all existing accounts automatically converting over to HBO Max at the same $15/mo price for the first month, before increasing to the standard $16 price thereafter. Those who wish to stay on the service need not do anything; the HBO Now app on all their devices should automatically update to the HBO Max app on Jan. 1, with their current logins carrying over.
(Actually, they've announced that those HBO Now subscribers whose credit cards are billed directly by HBO/AT&T will automatically gain access to the HBO Max app when it launches, likely using the same login credentials. But the majority of HBO Now subscribers are billed through Apple, Google, Amazon or Roku, because they signed up inside the app downloaded from their app stores, and it remains to be seen if they'll get automatically converted to HBO Max. AT&T pays those distributors a commission out of the $15 monthly HBO Now fee they bill and I'm wondering at this point if that means that AT&T is considering not doing that for HBO Max. They might do what Netflix began doing around a year ago -- don't allow sign-ups inside the app. Instead, force customers to sign up on your own website so that you do the billing and can keep the entire monthly subscription fee. We'll see. My prediction that HBO Now shuts down at the end of 2020 could be premature if that's what happens. Perhaps we simply see them no longer allowing new sign-ups for HBO Now, only for HBO Max. But existing HBO Now subscribers who are billed by an app store (Apple, Amazon, etc.) might be allowed to stay on that app/service on into 2021 to give them plenty of time to self-migrate over to HBO Max, which would require a new sign-up at HBOMax.com, allowing AT&T to retain the full $15 monthly fee.)
A month earlier, on Nov. 1, HBO's digital distribution platform partners, such as Prime Video Channels, Apple TV Channels, The Roku Channel and Hulu, had notified their customers that HBO would cease to be available through them as of Dec. 31. Customers were instead directed to the HBO Max app for continued access to HBO programming.
(There are probably 4-5 million HBO subscriptions of this type. It would be a pretty gutsy move for AT&T to simply cut them off and say, "If you still want streaming HBO, you'll need to sign up again at HBOMax.com and watch us in a different app than you were using before!" But hey, it was also gutsy for them to walk away from the negotiating table with DISH, resulting in HBO and Cinemax getting pulled from that entire system in fall 2018. That surely resulted in a few million subscription cancellations at the time. I still like the idea of HBO ceasing to distribute through these rival streaming platforms because, ultimately, they want all HBO streaming to happen through their own HBO Max app, where they control the UI, collect the usage data, and have a direct relationship/line of communication (email/text) with the customer. While they're definitely going to try to amend their current HBO distribution deals with the big cable operators like Comcast, Charter, Cox, etc. to sell HBO Max instead, I'll be surprised if they do the same with Prime Video Channels, Hulu, etc. I can't see them letting any of those apps offer all the additional content that HBO Max will offer beyond traditional HBO. I think the rule here is "WWND" -- What would Netflix do? Netflix does have deals in place with major cable and satellite MVPDs to distribute their service (with at least some amount of UI integration allowed on their set-top boxes) but they would never allow Netflix to be sold and distributed inside a competing streaming app like Prime Video or Hulu. I don't think HBO Max will either. So may as well kill that streaming distribution model for regular HBO too and try to shift those folks over to HBO Max.)
4Q 2022: HBO ceases to exist as a standalone service
HBO's final legacy distribution contract with a major cable operator expires, after which the operator is given no choice but to distribute HBO Max if they wish to distribute any channels or services at all from WarnerMedia. For the preceding two years, HBO (and its associated HBO Go app) had continued to be available as an option from a dwindling number of cable and telco operators around the country. Some had preemptively struck a new distribution deal with Warner to instead distribute HBO Max rather than HBO while others had waited it out, remaining on their existing contracts that allowed them to distribute only HBO. Most of those, though, had felt the need to cut the price of HBO as an a la carte option down from $15 to about $12-13 per month due to competition from HBO Max as a much larger standalone service priced at just $16.
(Again, HBO Max will be priced at $15, not $16, as a standalone streaming service. Beyond that, I think this prediction is still plausible, although it may very well be that it doesn't take all the way until late 2022 for this to happen. Will there really even be any significant MVPDs that hold out against switching over from HBO to HBO Max?)
