AT&T's newest streaming service, HBO Max, may be filled with DC superheroes, wizards, hobbits and Looney Tunes, but that may not be enough for investors.
The new platform also faces tough comparisons with Disney+, Disney's foray into subscription streaming, which not only had a massive number of subscribers at the time of its launch in November but has been praised for its streamlined service and original content.
"HBO Max's launch has thus far been notably less smooth than the launch of Disney+, due to a variety of factors, including confusing branding, uncertainty about how to get the product, and limitations on how consumers can actually watch the product, particularly on television," Vijay Jayant, analyst at Evercore ISI, wrote in a note to investors Sunday.
Part of the confusion lies with AT&T's previous streaming apps — HBO Go and HBO Now. HBO Go was designed for customers that have HBO as part of their cable package but want to stream HBO. HBO Now was created for people who don't have cable but want to have access to HBO content.
HBO Max houses the entire HBO catalog but also contains WarnerMedia's content.
However, unlike Disney, which planned its streaming service Disney+ around five major franchises — Disney, Pixar, Marvel, Star Wars and National Geographic — AT&T's brands are less cohesive, making the content feel jumbled.
HBO Max contains original programming from HBO, the DC Extended Universe, Adult Swim, Crunchy Roll, Studio Ghibli, Cartoon Network, Sesame Street and Harry Potter, among others.
"The brands don't resonate the same way because they aren't as clear," Craig Moffett, of MoffettNathanson, said Friday during one of the firm's bimonthly conference calls with clients.
Reviews of the service have called it an "odd hodgepodge of content" with a focus on older titles instead of new originals.Â
The content, the $15 monthly fee to use the service, roughly the same cost of HBO as part of a cable package, and the fact that the company did not secure deals with Roku and Amazon to make the product more widely available to the market have led Michael Nathanson, one of the lead analysts at MoffettNathanson, to dub HBO Max an "opportunity lost."
In the bigger picture of AT&T's strategy, content is only a small portion of the business. It's not core to the company in the same way that it is for Disney.Â
Because of this, "HBO Max isn't a game changer for AT&T," Jayant wrote.
"We see little chance that investors will begin to look at AT&T on a sum-of-the-parts basis, valuing HBO Max on a per-subscriber basis, as with Disney and Disney+," he said.
Just under 90,000 people downloaded the HBO Max app on its launch day last week. That doesn't include any of the existing HBO and HBO Now customers who may have been automatically switched to the HBO Max service. Around 8 million people have HBO accounts, but it's unclear how many of them took advantage of the new HBO Max option.
Despite Evercore's criticism of its launch, "we believe HBO Max is a good product, with a strong content lineup, a solid (but not particularly distinctive) user interface, and the backing of a highly-regarded brand," Jayant said.
