This means he doesn’t think Roku will ever be a major streamer, because they are ad-supported. It’s a bit ironic, considering HBO Max is going to be releasing an ad-supported version of their service, similar to what Hulu, Paramount+ and Peacock all currently offer.
What defines a “major” streaming service? The CEO of HBO Max, Jason Kilar says “hundreds of millions of paying subscribers.”
Speaking at Morgan Stanley’s Technology, Media and Telecom virtual conference Thursday morning, Kilar said that there’s only a handful of major streaming services “that I think can ultimately get to scale, defined by hundreds of millions of paying subscribers around the world.” How many is a handful? “Less than six,” the former Hulu CEO said.HBO Max Chief Kilar: ‘Less Than 6’ Major Streaming Services Will Get to Scale and Survive | Next TV
Amazon Prime Video isn’t 100% paid subscribers, because they include their streaming service as a perk for joining their Amazon Prime service. Yes, they also sell subscription separately, but the vast majority of their 150+ million subscribers are not paying to only subscribe to Prime video, they’re getting it as an included benefit. Their service would have dramatically fewer paid subscribers if it was only the streaming service. We’ll probably never know these numbers but if we could guess, we’d say it was less than 10 million subscribers, maybe way less.
This leaves the elephant in the room, the king of the hill, Netflix as the only “major” streaming service currently with hundreds of millions of paid subscribers. That’s all. One streaming channel. Disney+ is paid subscribers only, but it’s nowhere near 200+ million paid subscribers.
What Kilar is trying to do here is position HBO Max as one of the three or four primary paid subscription streaming services so when households start budgeting and cutting, they keep his service. Although HBO Max have been targeted as being too expensive — after all, they are the second most expensive streaming service currently — the reality is their content makes them one of the major streaming providers.
Then there’s Disney, the second elephant in the room. They don’t have as many paid subscribers yet, but they are climbing — fast. Don’t count them out by any means, not with such lucrative IP as Star Wars and Marvel, not to mention their own animated kingdom of family films. Disney, if they don’t screw it all up by failing to produce more movies and TV shows based on their IPs that fans are clamoring for, has the potential to one day rival Netflix. They are crippled at the moment by a variety of factors, but counting them out is ill-advised.
We don’t need Kilar to predict the streaming future. There are currently three major streaming services: Netflix, Amazon and Disney+ — and then everybody else. I could argue that Disney+ isn’t as good as HBO Max (especially with movies), because they aren’t putting out anywhere close to as much new original content, but that doesn’t matter. Disney is working on changing that. Heck, they have like a dozen Star Wars projects in the hopper alone, not to mention the Marvel stuff. If even a quarter of these projects are as successful as The Mandalorian, they can ride this to hundreds of millions of subscribers.
None of the services, even Amazon, compete with Netflix on quantity of new content released. Netflix has been working that corner market for several years and their pipeline is bursting with new content. Everybody else is playing catch-up. Once other streaming channels catch up, though, who’s on top could change. Netflix might be all about quantity but they have some quality control problems. So will everybody else. Not everything created is a smash hit.
Bottom line: Kilar isn’t wrong with what he said. He just focused on “paid” subscribers which is more than misleading considering the many ad-supported “FREE” streaming channel options. Many people will suffer through ads to watch their favorite movies and TV shows, just as has been the case with traditional TV that is fading for streaming..
What Kilar should have pondered is how many will switch to HBO Max ad-supported version to save $5-10/month? That answer depends on how invasive the ads will be.