The entertainment industry is taking a major hit because of coronavirus as numerous productions see major delays and theaters close down, making AT&T's launch of HBO Max more urgent than ever. Disney, Sony, Universal, and Warner Bros. have all started releasing some of their current movies on digital platforms, and with HBO Max's originally scheduled launch just a few months away, AT&T should do what they can to accelerate that timeline.
The global impact of the novel COVID-19 coronavirus has ground Hollywood to a virtual standstill. Movie and TV production crews have disbanded to avoid spreading the virus, some big releases moved their release dates over box office concerns, and now with most theaters completely out of operation, the remaining movies don't have many options.
This means that not only does the expected revenue from these incoming releases no longer exist, but the movies that follow them are also being delayed, meaning any company that was relying on box office revenue will need to drastically rethink its short term strategy to minimize what is likely to be staggering losses. Many recent theatrical releases have already been released digitally in response, with most being available for purchase on-demand at $19.99, but a few have also gone to streaming platforms like Disney+.
The fact that some of these movies had their theatrical runs cut short also means recouping lost revenue is even more important, and they were already supposed to get digital releases, meaning there's still a chunk of anticipated revue that virtually vanished. Current releases aside, HBO Max's massive library will also be a major draw on its own.
While selling digital copies for $19.99 could help recoup some expected box office revenue in the short term, it's also a major opportunity cost considering HBO Max was supposed to come out in May. With a monthly subscription of $14.99, using these new releases to lure subscribers would be more attractive to consumers, but also provide a better long-term payoff for Warner Bros. due to the revenue from recurring subscriptions. It may not provide a satisfactory enough return for something like Wonder Woman 1984, but it could actually be a boost for movies like Birds of Prey, or even smaller flicks like Ben Affleck's The Way Back, both of which are getting VOD releases next week.
The biggest question is whether or not HBO Max is even ready. Even Disney+, which was a massive project for Disney, didn't launch without hiccups, as many users saw streaming delays or saw other technical issues in the days after launch, and that was on its originally scheduled launch day. We're 2-3 months from HBO Max's expected "May 2020" launch window, and while the platform itself is likely mostly completed, the weeks between now and launch would have been spent stress testing, bug testing, troubleshooting, and patching/updating.
With workers around the world sent home to slow the spread of the virus, the HBO Max development team is likely still up and running, but they may be working from home or otherwise slowed down. The same problem poses an after-launch risk. Resource constraints may be a barrier to proper technical and customer support after launch, particularly if anything goes wrong. The last thing AT&T/WB needs is to rush out an incomplete platform into a starved market where everyone is at home with nothing better to do than stream movies, only to have the platform crash and lack the proper resources to fix it or handle a flood of angry customers. Then again, if the launch goes well, there could be a new source of revenue to help alleviate the financial strain of the total Hollywood halt caused by the coronavirus (not to mention the great PR of rushing to meet consumer demand in a starved market).
AT&T is surely doing what they can to speed up the release of HBO Max, and the benefit to customers and WB's immediate cashflow are both obvious, but their decision to proceed with caution is understandable, as a botched launch in the middle of the coronavirus pandemic could result in major backfire. Now if they could also accelerate the release of Zack Snyder's Justice League on HBO Max while they're at it...