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Why HBO Max has chosen Latin America as its first market outside the U.S.

WarnerMedia, HBO's parent company, hired Hulu’s former international boss, who will be focused on the launch in the region, which is expected in 2021

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As LABS exclusively reported last May, Latin America will be the first region outside the United States where HBO Max, WarnerMedia‘s video-streaming platform, will launch. Although no official date has been disclosed nor which countries will receive the platform first, AT&T, WarnerMedia’s holding company, hired Hulu’s former international VP Johannes Larcher to lead the global rollout of its new service – starting with Latin America in 2021, the company confirmed. 

But why Latin America? The answer may lie in two factors present across the region: the strength of HBO-branded channels and the company’s own assets to operate locally.  

READ ALSO: Streaming services will surpass pay-TV in Latin America in 2020

By opting for Latin America as its first landing ground after the U.S., HBO Max is adopting a different path from the other big newcomer to streaming services, Disney+, which expanded to some European countries and India before its forthcoming arrival in Latin America, announced for later this year. It also differs from Amazon‘s Prime Video, which chose a blanket approach when it simultaneously launched in 200 markets back in December 2016.

According to Simon Murray, principal analyst at Digital TV Research, a British consultancy that provides business intelligence for the television industry, HBO has exclusive deals with pay-TV operators in several countries, especially in some key European markets, that could hinder its plans there. 

READ ALSO: How streaming platforms are taking Latin American productions to new global audiences

“HBO Max has a dilemma when it comes to its international expansion”, Murray says.  “Some of the other newer SVOD platforms have the same predicament, but perhaps not as much as HBO.”

In Latin America, on the other hand, HBO has its own properties that could facilitate its rollout. Earlier this year, WarnerMedia took control of all HBO-branded operations in Brazil and Spanish-speaking countries of the region. Before the deals, those operations had been run in joint-ventures with Argentina-based Ole Communications.

Also, HBO is a strong brand for television and movie content in Latin America. Last November, John Stankey, COO at AT&T, revealed that its premium channels and the current HBO Go streaming service have 10 million clients in the region. 

Digital TV Research predicts that, within 5 years, HBO Max will add 2.2 million users on top of a sizable chunk of that base of current subscriptions – viewers that may end up migrating to the new platform at a discount or at no additional cost. If those predictions are true, the new platform could become one of the Big Four video-streaming services in Latin America, behind Netflix, Disney+ and Prime Video.

In other markets, HBO might want to take advantage of established relationships and lucrative deals, therefore extending partnerships with present operators – such as Bell in Canada, Hotstar in India, OCS in France, and Sky in the U.K., Austria, Germany and Italy, for example – to kickstart new joint ventures with the purpose of launching HBO Max. “Sky has had an exclusive deal with HBO for a long time which they resigned recently. Another fairly long term deal. Now, they could come together and say, “Hey, why don’t we launch HBO and Max together?” They could do that. There’s a channel called Sky Atlantic in the UK which is basically HBO”, pointed out Murray to LABS.

However, HBO may regard renewed partnerships as an opportunity missed for HBO Max, as some of these deals cover rich markets where Netflix has already made big inroads into. But also, asks Murray, “How many subscribers would HBO Max need in each country by going alone to exceed revenues from the existing deals?”

Johannes Larcher will lead HBO Max’s international expansion

WarnerMedia, a division of AT&T Inc., announced on Wednesday that Johannes Larcher will join the company in August as Head of HBO Max International. He will be responsible for the international rollout and management of HBO Max, which launched successfully in the U.S. on May 27. “His first focus will be the launch in Latin America, which is expected in 2021”, says the company statement.

Johannes Larcher, new Head of HBO Max International. Image: WarnerMedia/Courtesy

“Living at the crossroads of digital technology and content, I’m thrilled to help create unforgettable entertainment experiences for consumers in international markets and make HBO Max an indispensable streaming service around the world”, said Larcher, who currently serves as managing director of digital services at MBC Group, a media company based in Dubai and owner of Shahid VIP, the largest Arabic language video streaming service with 1.4 million subscribers. 

From 2016 to 2018, he was CEO of SubVRsive, a WPP funded, Emmy-nominated virtual and augmented Reality studio. From 2009 to 2013, he served Hulu as senior vice president of international operations, where he led the launch and initial growth phase of Hulu Japan