Project and Portfolio 2: Full Sail University
- 1. Page A Market Analysis for Home Box Office (HBO) Max Dream Powell Full Sail University Project & Portfolio II: Business and Marketing May 05, 2024 1
- 2. Page EXECUTIVE SUMMARY This is a marketing analysis report of Home Box Office (HBO) Max. The streaming platform's rebranding is becoming well-known for its intriguing original movies and new consumer experience. This report will provide information on creative strategies to improve subscriber growth and compare other top streaming companies. Max targets younger families interested in the best quality images, sound, and movies. The brand has challenges competing in a competitive market. The recommendations in this report involve adding sports entertainment content into Max bundling and partnering with other streaming services such as ESPN+. Recent findings have demonstrated that adding sports content not only increases revenue and subscribers but also improves consumer satisfaction, decision-making, accessibility, and convenience. Importantly, specific demographics such as millennials and the younger generation, who are key target audiences, prefer accessing sports content on a streaming platform instead of live television. 2
- 3. Page OBJECTIVE In this report, Max should develop a strategic partnership with ESPN+ to leverage its sports content and decrease the cost of subscriptions. This approach is expected to attract sports fans and enhance Max's overall value, leading to sustainable subscriber growth. The report will also provide recommendations and innovations to compete against its top entertainment mass media industry competitors. RESEARCH METHODOLOGY The research data in this report is sourced from external online resources such as articles, web pages, and library databases. Collected between 2022 and 2024, the data is current as of 2024. This report will compare Max's subscription cost and products with its top competitors, particularly Netflix and Disney+. The biggest challenges are the demographics of consumers who chose specific product subscriptions and the current statistics of subscribers and revenue. RESEARCH AND KEY FINDINGS Home Box Office (HBO) was founded in 1972 by Time Inc., later Warner Media. In 1975, it became the first American network and national cable channel. The merger with Discovery Inc. marked a new chapter, expanding HBO's library. HBO Max was later launched, rebranding to Max (BB Media, 2023). For Max's fans, dive deeper into storytelling from the original favorites. With Max, there are endless possibilities to binge-watch and discover a new experience, simultaneously streaming on the go in 4K, such as The Dark Knight, Dune, Aliens, and Barbie. 3
- 4. Page Due to rapid technological advancements, the entertainment mass media industry is one of the largest markets in the world. A study shows that the market size is estimated at 27 billion and is expected to increase to 40 billion in the next five years, making this industry a substantial red ocean market (Mordor Intelligence, 2024). Max is one of the brands in this industry and offers three product lines. The subscription includes an option for consumers to pay monthly or annually. The brand has updated technological advancements. Consumers can access Max streaming services on multiple devices, including phones, tablets, and televisions, allowing them to stream on the go. These features include navigation to discover new movies and shows and parental controls (Vega, 2023). Consumers can choose from a basic plan with ads starting at $9.99 and ad-free, from $15.99 to $19.99. To compete with the other competitors, the chosen product will be the Ultimate Ad-Free subscription at $19.99 with added Live Sports at an additional $9.99. Max Live Sports or B/R Sports add-on includes select games; Major League Baseball (MLB), National Basketball Association (NBA), and National Hockey League (NHL). These select games are limited and do not include everything that Disney+ offers through its partnership with ESPN+ (Warner Media, 2024). Max targets demographics on social media geared towards college students and millennials. The brand focuses on families who enjoy premium content with originals, action, comedy, and many different genres (Elad, 2023). The streaming market is highly competitive, with high-ranking subscribers and costs from subscription plans. Netflix Q4 in 4
- 5. Page 2023 at 260 million, their Premium plan offers unlimited ad-free movies, Ultra HD, and streaming on multiple devices at $22.99 a month (Iqbal, 2024a). Disney+ Q4 2023, at 150 million subscribers, Trio Premium, offers ad-free, 4K, streaming on multiple devices, Hulu (With Ads), and ESPN+ (With Ads) at $24.99 a month (Iqbal, 2024b). Some of the streaming services have successfully incorporated sports in their bundles. In a recent article, it was revealed that the demographics of sports fans aged 18-26 prefer to watch sports content on their mobile phones. This younger generation finds it convenient and demands sports in a short form or watching highlights to stream on devices including football, basketball, athletics, and soccer (SWNS, 2023). By adding a sports package, Max, does not only have the potential to increase its subscribers but also to strategically expand its library of movies and television, enhancing its overall content offering. CONCLUSIONS 5
- 6. Page The findings show that Max Ultimate Ad-Free plus Live Sports has the highest subscription cost out of all the competitors with the lowest number of subscribers. Currently, in Q4 2023, Max has 97 million subscribers. The company aims to gain 130 million subscribers by 2025 (Mullin & Barnes, 2022; Samanta, 2024). Max should look towards the future by making changes in the upcoming year to increase potential subscribers in partnerships with an added lower bundle and decrease subscription costs. RECOMMENDATIONS The first recommendation is that Max should offer a lower-price plan with a bare minimum bundle. This can leverage a strategic combination of cost control to attract new subscribers. By providing a lower-priced plan and bundling products, Max could expand the reach of its content while generating ad revenue. This strategic move would not only leverage the strong brand recognition of both entities but also attract new demographics containing aged 18-40 prefer to stream sports ad-free (Clark, 2024). The second recommendation is to potentially partner with ESPN+ and create a specialized package for sports entertainment fans. This partnership could offer a unique value proposition. While Max offers originals and new content, ESPN+ brings sports. By bundling these offerings, we can create a comprehensive entertainment package at a competitive price, delivering exceptional value to our subscribers. This strategy has the potential to attract new subscribers interested in sports and premium content originals. However, it's important to note that although both large companies are competitors, if partnering is allowable, brands must be aware of the Anti-trust laws. To respond to Max's threat, Max should offer a lower bundle plan to double consumer satisfaction by 2025. This strategy is based on the understanding that a bundled plan can attract a 6
- 7. Page more extensive customer base. Monitoring and analyzing this strategy will impact and allow for adjustments in maximization by content offerings, and customer relations. This approach ensures Max capitalizes on favorable findings, like high engagement with each plan. 7
- 8. Page REFERENCES BB Media. (2023, May). The Evolution of HBO From premium cable to streaming giant: the emergence of Max: the emergence of Max. Retrieved April 27, 2024, from https://bb.vision/press-releases/the-evolution-of-hbo/ Business of Apps. (n.d.). Disney Plus vs Netflix Subscribers. https://www.businessofapps.com/data/disney-plus-statistics/ Clark, T. (2024, March 19). How streamers are keeping sports fans satisfied even in the offseason. The Current. Retrieved May 4, 2024, from https://www.thecurrent.com/streaming-sports-programmatic-data Elad, B. (2023, August 4). HBO statistics by growth, country, age group and most enjoyed contents. Enterprise Apps Today. Retrieved April 27, 2024, from https://www.enterpriseappstoday.com/stats/hbo-statistics.html iProPrav. (n.d.). Top streaming services company logo set. Netflix, hbo max, paramount, disnep, apple tv, hulu, prime video. Editorial logotype in vector flat style. Adobe Stock. Iqbal, M. (2024a, February 7). Netflix Revenue and Usage Statistics (2024). Business of Apps. Retrieved April 27, 2024, from https://www.businessofapps.com/data/netflix-statistics/ Iqbal, M. (2024b, March 1). Disney Plus Revenue and Usage Statistics (2024). Business of Apps. Retrieved April 27, 2024, from https://www.businessofapps.com/data/disney-plus- statistics/ Luckas. (n.d.). Mobile with HBO Max streaming. Adobe Stock. Mordor Intelligence. (2024). Media and Entertainment Industry Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029). Retrieved April 27, 2024, from https://www.mordorintelligence.com/industry-reports/media-and-entertainment-market- landscape 8
- 9. Page Mullin, B., & Barnes, B. (2022, August 5). Warner Bros. Discovery Says 2025 Goal Is to Reach 130 Million Paid Subscribers. EBSCOhost. Retrieved April 27, 2024, from https://login.oclc.fullsail.edu/login?url=https://search-ebscohost-com.oclc.fullsail.edu/ login.aspx?direct=true&db=a9h&AN=158376311&site=ehost-live Samanta, O. (2024, March 20). HBO Max Subscribers, Revenue & User Stats 2024. Priori Data. Retrieved April 27, 2024, from https://prioridata.com/data/hbo-max-statistics/ SWNS. (2023, June 20). Gen Z enjoy live sports less than other generations: poll. New York Post. Retrieved May 4, 2024, from https://nypost.com/2023/06/20/gen-z-enjoy-live- sports-less-than-other-generations-poll/ Techloy. (2024, January 19). Subscriber Number of Major Streaming Services. https://www.techloy.com/warner-bros-and-discovery-launch-max/ Vega, N. (2023, May 23). HBO Max is just “Max” now—here are the 4 things to know about the new streaming service. CNBC. Retrieved April 27, 2024, from https://www.cnbc.com/2023/05/23/hbo-max-is-now-just-max-what-you-need-to- know.html#:~:text=The%20new%20Max%20app%20features,coming%20or%20has %20already%20begun. Warner Media. (2024). Max | The one to watch. Max. Retrieved April 27, 2024, from https://www.max.com/ 9