Streaming service HBO Max this week committed to the first steps in its European rollout and is already looking over the horizon to expansion in Asia. Success in Asia will require more of the strategic flexibility that HBO Max chief Johannes Larcher learned when launching last year in Latin America, and from his previous role at Hulu Japan.
Saying that the streaming product has “reenergized HBO” and describing it as a “major growth driver for all of WarnerMedia,” Larcher told the APOS conference on Tuesday that HBO Max has amassed some 47 million subscribers in the U.S. and a further 20 million in other territories, predominantly in Latin America,.
“Latin America was not a carbon copy of our operations in the U.S.,” Larcher said. Adaptation meant catering to demographic sectors outside the traditional city-dwelling HBO-using populations; creating a mobile-only tier at a lower price point; and introducing live sports. He signed a three-year deal for Champions League soccer in soccer-mad Brazil and Mexico.
The company already has HBO Go as a forerunner in Asia. “It started as an experiment, a TV-everywhere authenticated solution from 2013 and was distributed through affiliate relationships in Southeast Asia. It was subsequently relaunched as a D2C OTT service in six territories,” said Larcher.
It is currently the home to HBO content, third party content, including movies from Paramount, and HBO Max originals from the U.S. HBO Go will also be the near-term beneficiary of WarnerMedia’s recently announced 45-day theatrical window policy in Asia. That means “Space Jam 2,” “The Conjuring 2,” “King Richard” and “Dune” will be on a WarnerMedia small screen service far quicker than traditionally was possible.
“HBO Go has always been seen as an opportunity to learn, for the arrival of HBO Max in the region,” said Larcher. Though as it only has limited geographical scope it cannot provide insights across the larger, and even more diverse Asia region.
“One lesson from my days at Hulu Japan was that you will not win and will not scale unless you have great content from Japan for Japan, both animated and live action series and feature film. So, a big focus in Japan will be on creating compelling Japanese content,” said Larcher.
“As WarnerMedia we have a studio producing great anime content in Japan, serialized and feature. Some of it is successful, some of it is on other platforms than WM,” he said.
“In Korea, it is mandatory for us to think about creating great Korean content as we enter that market. That content also plays very well across Southeast, Asia and increasingly in the U.S.,” said Larcher.
The commitment to acquisitions and becoming involved in the Japanese and Korean production sectors puts HBO Max in competition for content and talent with platforms already dominant in the country, Netflix and Tving, and also with Disney Plus. Disney has set a November 2021 launch in Korea and is making similar noises about Korean content.
Other adaptations involved in the pivot towards Asia will include setting appropriate price points – Larcher admits the service will be a latecomer and have to adopt “penetration” pricing – and maintaining some of the linear TV era partnerships with local telcos and aggregators for streaming era carriage, billing and marketing.
The biggest strategic choice to be made, may be in India. “We aspire to be in India with HBO Max at some point,” Larcher said, without the slightest hint about timing.
He described the India market as “at an inflection point” and “almost bifurcated.” That reflects a current divide between the numerical market leader Disney Plus Hotstar, which has more than 30 million paying subscribers but only “miniscule” average revenue per user, and Netflix, which has gone for a “premium, western-oriented” model.
“We know our own WarnerMedia content is super-successful. We currently license it out to a variety of partners. And we know from the data that it drives tremendous acquisition and engagement on these platforms,” said Larcher.
He’ll have to get it back and he expects to have to supplement it with more production too. “Local content will be a prerequisite for success [in India].”