HBO Max execs knew their apps were flawed. They launched them anyway.
Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Thursday, we’re taking a look at HBO Max’s app strategy, the latest ad revenue numbers from IAB and a nerdy little detail from “Severance.”
Inside HBO Max’s efforts to revamp its app platform
Move fast and feel the heat: When HBO was getting ready to launch its own video subscription service, it was struggling to keep up with the competition. Netflix was growing its audience by millions of people every quarter, and Amazon was starting to throw serious money at original shows.
The competition was multiplying. “Disney launched during our planning, and we knew others were coming,” recalled Sarah Lyons, head of HBO Max’s Product Experience, during a recent conversation with Protocol. That’s why the network decided to push out what everyone knew were imperfect apps, with the goal of revamping them once the service had achieved some scale.
- At launch, HBO Max’s apps were based on the tech stack of the network’s existing HBO Go and HBO Now mobile and TV apps.
- HBO Go was built for cable subscribers who wanted to catch up on episodes of shows they’d missed on TV; both apps weren’t really meant to be full-fledged Netflix competitors.
- “We knew that that platform never could handle what HBO Max was going to do,” Lyons said. “It never was intended to go global, it was never intended to go direct-to-consumer.”
- One example: As a catch-up app, HBO Go never really focused on discovery. “You didn't have to go find anything, because whatever [show] you were looking for was going to be at the top of the home page,” Lyons said.
- That DNA also complicated things under the hood. At first, the HBO Max team wasn’t able to sort shows into multiple categories. Dramedies could either be defined as dramas or comedies, but not both.
- Lyons and her colleagues were able to fix this and some other issues before launch, but ultimately had to release what they acknowledged was far from a perfect product.
Customers were very public about their misgivings when HBO Max launched with apps based on that legacy platform in May 2020. “Best content worst app” was how one Reddit user put it, while another asked, “Why does this app suck so hard?”
- “It was tough, agonizing,” Lyons admitted. “I poured my heart, my passion into this product, and wanted it to be great.”
- Her team obsessively tracked those app reviews, triaging what it could as quickly as possible. “I've literally been looking at customer feedback daily. I look at all social media, tweets, every single word a customer says,” she said.
- While the HBO Max product team was working on what Lyons called “paper cuts,” it also began a much bigger project of rebuilding the underlying tech platform from scratch.
- Key to those efforts has been the acquisition of You.i TV, an Ottawa-based startup that had figured out how to use Meta’s React Native framework to build smart TV apps.
HBO Max has been moving its apps to this new platform over the past several months. Last week, the company launched a new Apple TV app, after previously revamping the experience for Roku, PlayStation, Android TV, LG and Vizio.
- The results have been promising: Crashes of the HBO Max Roku app have decreased by 90% since the move to the new platform, according to Lyons. Load times on Android TV decreased by 50%.
- Up next are new Fire TV and Xbox apps, followed by relaunches of the mobile and web experience.
- As the new platform rolls out, the HBO Max team is now able to tackle broader user-experience issues. This includes improving some of the in-app discovery by adding more dynamic elements.
- For instance, the team plans to make better use of branded hubs, which right now are fairly static categories for everything coming from WarnerMedia properties like TCM or Cartoon Network. “The vision for hubs is that they will evolve over time to become more destinations that are timely and updated,” Lyons said.
Getting to this point was painful, but Lyons still believes it helped build momentum and global scale, even if that meant working on new tech while simultaneously maintaining the existing apps. “We’ve been changing out the engine of the plane while we’re flying the plane,” she said. “I do think it was the right decision to try to balance both.”— Janko Roettgers
Ad-supported video is booming
Stop me if you’ve heard this before, but people seem to really like free video, and they’ll even tolerate ads to watch it. Digital video advertising revenue grew 50.8% in 2021, according to a new report authored by PwC and released by the IAB this week.
- Video ad revenue totalled $39.5 billion last year, compared to $26.2 billion in 2020.
- Video ads made up 20.9% of the $189.3 billion of digital ad revenue generated across the industry in 2021.
- That’s a 2.2% market share increase, with search advertising still accounting for 41.4% of all digital ad revenue, followed by display ads with 30%.
- Desktop video ad revenue grew faster in 2021 than mobile (58.2% versus 47.8%). I guess working from home is still having an impact on our collective video viewing.
- Mobile is still a safe bet if you want to reach consumers via video ads: Phone and tablet views were responsible for 69% of all video ad revenue in 2021.
Streaming video is hot, but there’s a new kid on the block. Video ad growth rates were surpassed by digital audio, which grew 57.9% year-over-year. However, in total dollars, audio is still a lot smaller, only bringing in $4.9 billion last year. You’ve got to start somewhere, right?
— Janko Roettgers
A MESSAGE FROM LENOVO
In a complex technological environment, when a business needs to pivot quickly in reaction to external forces, the “as-a-service” model of delivery for IT hardware, software and services offers companies of all sizes the ultimate flexibility to stay competitive with a scalable, cloud-like consumption model and predictable payment options for hardware and service inclusions.
In other news
IMDb TV is now called Freevee. Amazon is rebranding its free, ad-supported video streaming service … again. Maybe third time’s a charm?
Crunchyroll CEO: Anime is a community, not a niche. Crunchyroll’s CEO Colin Decker tells us why he is not afraid of Netflix, what other streaming services can learn from Crunchyroll and why you should pay attention to the dirty kid in the parking lot.
FIFA launches its own streaming service. The new service is free and ad-supported, and promises to carry 40,000 live games per year. That’s a lot of soccer! Still, don’t expect games from some of the world’s biggest clubs, at least not at launch.
Plex is getting rid of podcasts. Following the launch of its new universal search and discovery features, Plex is sunsetting a content category that had just a bit too much competition.
Spotify’s top dealmaker jumps ship. Speaking of podcasts: Courtney Holt, who lured Joe Rogan and the Obamas to Spotify, is leaving the company.
Another bombshell in the Activision case. A member of the state agency responsible for suing the game publisher has resigned in protest, accusing Gov. Gavin Newsom of interfering with the case on behalf of Activision, Bloomberg reports.
Nintendo and Sony adjust auto-renewal practices. A U.K. regulator has succeeded in pushing the video game giants to change how they charge customers for subscription products to make them more consumer-friendly.
Bungie shifts to “digital-first” hiring. The Destiny developer said it opened fully remote positions in seven U.S. states after receiving proper approval. As part of its pivot to digital work, the company will no longer require employees to work from its Bellevue, Washington, offices.
You know why TV shows cost so much to make these days? Okay, the fact that a growing number of streaming services are competing on a global scale with each other may have something to do with it. However, I’d like to think that it’s also because it’s that much easier today to pause, take a screenshot and share it with the world.
That’s how I learned that the keyboards in the Apple TV+ show “Severance” have no escape key. It’s that level of attention to detail that makes “Severance” so brilliant, and probably also pretty expensive to produce. The goat budget alone! Oh wait, I said too much …
— Janko Roettgers
A MESSAGE FROM LENOVO
Lenovo’s broad portfolio of end-to-end solutions provide organizations with the breadth and depth of services that empower CIOs to leverage new IT to achieve their strategic outcomes. Organizations also have the flexibility to scale and invest in new technology solutions as they need them.
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