After a Year of Upheaval, HBO Max Has Carved Out Its Place

Today is supposed to be a victory lap for HBO Max. To mark the official one-year anniversary of its 2020 launch, the service has unveiled its ultimate flex: the reunion of the cast of Friends, the 10-season sitcom that originally aired on NBC but, under the intricate TV ownership structure laid bare by the streaming era, was produced by Warner Bros. Television and lent out to Netflix before being repatriated to the WarnerMedia empire on a new platform named after a premium cable channel. IP rights are complicated; nostalgia and star power are simple. Just look at that fountain!

WarnerMedia paid handsomely for the Friends catalog: a reported $500 million. Nor did the company spare much expense when reconvening the cast for only the second time since the finale in 2004. The six leads were paid an estimated $2.5-3 million apiece, or about $24,038 per minute of screen time. (The special clocks in at just under two hours. That’s half a season of The Comeback!) Add in host James Corden, cameos from BTS to Malala, and the requisite pandemic precautions, and you’ve got a budget in the neighborhood of Godzilla vs. Kong, the last major crossover event to put HBO Max in the news. No wonder the stars were plugging the event as far back as last year’s Emmys.

But for all the effort to show off a prime asset, HBO Max is already in the news—and not for reasons that have anything to do with Central Perk. Last week, reports emerged that parent company AT&T planned to merge WarnerMedia with Discovery Inc., a $43 billion transaction that was swiftly confirmed, then endlessly analyzed. The spinoff arrives just three years after the telecommunications giant acquired Time Warner for $85 billion, a move that led directly to the creation of the WarnerMedia label and, in turn, HBO Max. No wonder the Friends summit feels anticlimactic. Three million dollars is a lot of money to pay the titular friends to banter on a soundstage, but compared to tens of billions of dollars to unwind an acquisition when the ink is barely dry, it’s just a drop in the bucket.

The Discovery Inc. news is just the latest, biggest example of a dynamic that’s come to define HBO Max in its first year of existence: behind-the-scenes convulsions that threaten to overshadow the public-facing content but don’t only despite executives’ best efforts. On the whole, HBO Max is a solid offering that’s managed to overcome a delayed start, a pandemic, branding issues, and executive shuffling to deliver a solid collection of archives, originals, and franchise IP. But you wouldn’t always know that from reading the headlines.

Even now, HBO Max is on the precipice of two major developments: international expansion, starting with Latin America and the Caribbean late next month, and a price adjustment, with a new ad-supported tier that will lower the sticker price from $14.99 a month—the highest of any major streaming service—to $9.99. (An ad-subsidized option is already built in to competitors like Peacock, Paramount+, and Hulu.) These are pivots designed to bring HBO Max into a future in which the service can compete on a truly global scale. But what the future holds is suddenly uncertain, except that it will likely include a lot more HGTV.

From the beginning, HBO Max had to navigate a veritable obstacle course on its way to our living room sets. First, the Trump administration held up a merger met with skepticism even by those who didn’t hold a personal grudge against CNN. What use did a phone company have for Batman? And while AT&T locked horns with the Justice Department, it lost precious time developing a product to showcase its brand-new holdings, from Cartoon Network to Turner Classic Movies. As a result, HBO Max arrived months after such second-wave streamers as Disney+ and Apple TV+, both of which launched the previous fall—not to mention established forces like Netflix and Amazon.

When HBO Max did land on the scene, it was with a muddled brand that reflected a confusing leadership structure. In short, HBO Max was named after HBO in an attempt to leverage the brand’s prestige, but was managed separately by veteran executive Kevin Reilly. The result failed to advertise Max’s true depth of programming while inaccurately implying Max and HBO were acting in lockstep. Besides marketing, there were more material roadblocks: HBO Max had yet to work out deals with either Roku or Amazon by launch, meaning millions of households couldn’t install the app on their TVs. Unsurprisingly, existing HBO subscribers were slow to convert to HBO Max, even though the upgrade was free. Just 4 million had made the switch a couple of months after launch, out of nearly 35 million subscribers at the end of 2019.

AT&T had a problem—and seemed to realize it, too. After installing Hulu alum Jason Kilar as WarnerMedia head just weeks before the service’s debut, a massive restructuring that summer shuffled out several C-suite types, Reilly included, and centralized HBO and Max under the leadership of Casey Bloys. The move was abrupt and noisy, but it was a major step toward solving at least one obvious design flaw.

All this sounds messy, and is. But HBO Max, somewhat miraculously, isn’t a mess. After a slow start thanks to the pandemic, Max had its first buzzworthy original in November with The Flight Attendant, the delightful Kaley Cuoco crime romp that earned early awards attention from the Golden Globes. The next month, Kilar dropped a bomb by announcing all of Warner Bros.’ 2021 releases would roll out concurrently in theaters and on HBO Max, a play that alienated filmmakers like Christopher Nolan but appears to have led to a spike in subscribers around tentpoles like Godzilla vs. Kong and the Zack Snyder cut of Justice League. (HBO and HBO Max now total over 44 million subscriptions between them.) At the very least, it seems to have forced Roku’s hand: The two parties finally struck a deal mere weeks later.

But now, yet more mess off screen. Kilar won’t get the chance to oversee the long-term impact of his short but impactful stint—he’s leaving WarnerMedia after the company was all but sold, or at least merged, out from under him. (One brutal detail: Kilar participated in a Wall Street Journal profile marking his anniversary on the job; AT&T CEO John Stankey provided a quote while negotiating the Discovery deal behind Kilar’s back.)

Kilar leaves behind a service that was just starting to level off from an admittedly rocky start, only to have another giant curveball thrown its way. While consumers wait to see whether HBO Max and Discovery+ will join forces or form a bundle—just one of the many open questions about the pending transaction—they have plenty of options to pass the time. There’s Hacks, the excellent Max original that’s already sparking Emmy predictions for Jean Smart. Or Mare of Easttown, the murder mystery from HBO proper that has theories flooding social media ahead of Sunday’s finale (which, coincidentally, also stars Jean Smart). Or In the Heights, the Lin-Manuel Miranda–produced musical subscribers will have the option to see at the multiplex or on the couch when it arrives next month. Or even the Friends reunion, if you’d like to know David Schwimmer’s personal thoughts as to whether Ross and Rachel were really on a break. If you’re not the sort who pays much attention to corporate clashes of titans, it’s more than possible to tune out the noise and simply enjoy what Max has to offer, which is more or less exactly what was promised: a vast range of material, all for the same price—or less, for those all right with ads—as previous stand-alone ventures like HBO Go.

In early April, research firm Ampere Analysis released a report on streaming market share in early 2021 versus the same time last year. The headline focused on Netflix ceding some ground to its competitors, but by far the biggest shift belonged to HBO, which quadrupled from 3 to 12 percent of estimated demand. HBO Max, of course, didn’t exist in early 2020. As long as the past year has felt, it’s a short window of time for a streaming service to establish itself, especially while experiencing as much upheaval as Max has—upheaval that also shows no signs of slowing. Whatever the future holds, carving out a footprint in the streaming landscape is an accomplishment on its own.