Warner Bros. Discovery: Enhancing Viewer Experience on MAX
Warner Bros. Discovery uses data-driven strategy to build a trusted brand and ‘Max’imise personalized content in a competitive streaming world.
HBO Max, recently renamed to ‘Max’, is an over-the-top streaming service owned by Warner Bros. Discovery, an American mass media and entertainment conglomerate. Launched in 2020, it has grown rapidly and is now the third largest video streaming service in the US based on market share, after Netflix and Amazon Prime. With 95.8 million subscribers in 2023, WBD’s data analysis has enabled it to capture the needs of its diverse audience and create engaging content accordingly while maintaining profitability.
As a subscription video-on-demand (SVOD) service in a highly competitive market, Max is focused on developing customer loyalty while expanding its market presence. To achieve its objectives, WBD uses data-driven insights and real-time analytics. A step in this direction was the launch of a mobile app, enabling the team to collect data and analyze user behavior. Notably, in 2022, the HBO Max app garnered 80 million downloads, not accounting for usage via smart TVs and other platforms. Additionally, using the Databricks Lakehouse platform, the company develops rapid, cross-functional insights for data science, marketing, finance, and operations teams. These insights facilitate a personalized user experience and refine content recommendations. Max also uses natural language processing through its ‘HBO Max Recommends’ feature wherein a voice-based assistant helps the customers find something to watch quickly, making the streaming process more user-friendly.
The overarching goal of pursuing data analytics for Warner Bros. Discovery (WBD) is to gain a real-time understanding of consumer behavior. Within this, there are specific steps such as tracking content viewership and monitoring social media. Tracking viewership on Max enables them to categorize viewers, leading to enhanced targeted advertising, marketing, and content delivery. The decision to rebrand HBO Max as Max, for instance, aimed to disassociate the platform from any associations with adult content, creating an inclusive appeal to a broader audience. Such decisions inspire more confidence when based on customer-centric data. Similarly, Social Media Monitoring provides valuable demographic-specific insights and identifies content themes that drive increased engagement. For instance, the Game of Thrones fandom observed on social media played a significant role in driving the marketing efforts for House of the Dragon, the most-watched TV show on HBO Max.
Additionally, platform features create feedback loops for improvement. For example, the “Click to Play” button serves as a metric for gauging the effectiveness of suggestions, indicating what content users are inclined to watch. According to Duan Peng, a senior executive at WBD, “We want the recommendation to come right away. This drives better engagement, customer satisfaction, higher loyalty, and subscription numbers.” Increased engagement and subscriptions ultimately lead to revenue growth.
Nonetheless, an overreliance on data poses significant risks and raises costs. WBD has seen a recent shift in its priorities from a subscription focus to profit maximization that relies heavily on data. The CEO, David Zaslav said, “We take a look at what people watch on Max and we can see exactly what they like and exactly what they don’t. And some of the stuff they’re not watching, we can put it on a free AVOD [advertising-supported video on demand] platform, and some of the stuff that they’re not watching, we can keep it non-exclusively on Max, but we could also sell it to others.” While retaining Discovery+ for paying customers aligns with this new profit-driven objective, such a broad-based strategy may not resonate well with users, potentially prompting them to migrate to other platforms. Notably, since rebranding as Max, the platform has already seen a loss of 1.8 million consumers. Moreover, the evolving nature of user behavior patterns makes predictions challenging. Striking the right balance between a conservative approach to platform changes, potentially risking market share, and an overly active one that may lead to subscriber loss is especially complex for a large-scale platform like Max.
Despite the high stakes involved, data-driven insights into viewer behavior, preferences, and content consumption trends, add unprecedented value to the company. Customized recommendations have resulted in user retention and may guide acquisition strategies such that investments are directed toward generating content in high demand. With the recent ambitious shift in Max’s marketing approach, it might be prudent to observe viewership patterns and gather feedback to deliver a personalized entertainment experience and uphold Max’s current competitive position in the streaming industry.
Resources
https://www.capgemini.com/wp-content/uploads/2020/11/Capgemini-OTT-Study-Report.pdf
Really great post, Asra, thank you for sharing. I appreciate all the references and research you’ve put into this. I’ll be excited to see how this industry plays out and how Max can build its data advantage.
You mentioned the delicate tradeoff between data-driven decisions with strategic decisions that improve user-friendliness but might be untested in the data. What role does intuition and judgement play in decisions?
I’m curious about how WBD plans to address the evolving nature of user behavior. Given the unpredictability of consumer preferences, continuous feedback loops seem essential. Additionally, understanding how WBD intends to respond to user feedback and adapt its content strategy accordingly could be pivotal in maintaining Max’s competitive edge.
Cool post, Asra! I’m curious about two things. The first is your point about launching an app to collect data insights. I’d love to know more about the technical aspects of that. Does a company not have data visibility attached to user emails without an app or do they specifically need app usage data through their phones? Why can’t they collect this through a browser? My second thought was around how HBO plans to prevent rabbit holes from a single click. As recommendation systems get better, as a user, I often have the issue of clicking on something I don’t like and then being taken to 500 shows I don’t want to watch. While I’m sure this is connected to a “duration watched” metric, I also have a similar issue based on my mood, where I have specific kinds of shows I prefer based on how my day is going. I wonder if HBO can gather data from (somewhere) to run daily sentiment analysis to predict which kind of show I will want to watch on a given day.
The obvious elephant in the streaming room is how Max can hope to compete with Netflix, who has been pushing the envelope in many areas of data analytics and recommendations for decades now. Obviously, Max wants to believe that their differentiated content offerings will encourage customers to choose it instead of (or perhaps in addition to) Netflix, but to your point, the recent industry-wide focus of profitability means that more content many not be most viable path forward. But then again, maybe Max’s goal is not to be the #1 streamer, but simply obtain enough market share to sustain itself as a viable business. In any case, great work on breaking down Max’s data analytics usage! I’m curious to see if Max can find ways to use data to truly separate itself from the ruthless competitive landscape, since I’ve always been a huge fan of the prestige programming on classic HBO.
Fascinating post Asra! I’m curious to hear your thoughts on the tension between the creation of art and meeting consumer preferences. Past executives of great renown in the entertainment industry have often argued that as much as meeting customer preference is desirable, it’s also true that “people have no clue what they want until we give it to them.” To what degree does data analytics in this context miss the broader need for great stories to be told? As an example, until the (English speaking) world experienced Squid Games, it wasn’t all that obvious that there was room for Korean-language media content. Now it might seem absurd not to view it as possible. Is Max focusing on the wrong part of its strategy?
Great article, Asra! It’s fascinating to see how Max is leveraging data analytics to personalize the viewer experience. I can personally attest to the effectiveness of their recommendation algorithm. I’ve been a Max subscriber for a while, and it’s almost eerie how well the platform knows my preferences.
In fact, since I arrived in Boston, I have been constantly ‘fighting’ with my roommates about this! They started using my Max account, and let’s say their taste in shows is… different from mine. I keep telling them to stop because they are ‘messing with my algorithm,’ but I don’t think I will stop them from using it any soon, haha…
This experience made me think about the challenges Max must face in maintaining the quality of their personalized recommendations. As you pointed out, an overreliance on data can pose risks, especially when user behavior constantly evolves. It’s a delicate balance to strike, but it’s crucial for retaining subscribers like me who value the personalized experience.