Alessandro Araimo (Max): “Only a few streaming services will survive in the long term”
Alessandro Araimo, Executive Vice President & Managing Director Italy & Iberia de WBD (Warner Bros. Discovery), transfers the keys to the rebirth of HBO Max in the form of the brand Max and addresses some of the most pressing issues in the VOD and streaming world: production models, super aggregators, subscription packages, 4K...
In the moments before the interview with Alessandro Araimo, the head of Warner Bros. Discovery in its video-on-demand strategy and film production in Spain, Portugal and Italy refers with a slight smile to what complex which is to address the tendencies of the VOD universe. Consumption models are constantly transformed and redefined, which makes it difficult to predict even at short term the evolution of these very important agents for the Spanish audiovisual fabric and for him orspanish consumer cio.
This hyperactive sector has gone from being the alternative to linear consumption and to the complexity of an overcrowded cable subscription model (especially in the US market), to evolve by integrating both concepts. Let's take a brief look at both issues: although at their founding they shied away from it, the platforms are following a path of unifying on-demand content with linear channels, highlighting both the importance of straight, like the welcome experience lean-back versus interactive models. On the other hand, what was previously a small market, has become a hypercompetitive scene that forces the consumer to choose between dozens of options to configure your particular content grid.
The above pills are examples of the unpredictability from a market that has gone from embracing smaller screens to seeing how viewers return to the couch to watch content on the big screen; to bet on the hyperspecialization of the content, to produce contents mainstream; to reject the advertising, to integrate it through multiple business models; to lean on the content scripted quality, breaking its structural pillars and the classic “ABC model” (in the United States) or the classic “Globomedia-type series” (in Spain), by betting on unscripted in all its expressions.
In this unpredictability, whose examples could be extended for several more paragraphs, the umpteenth transformation of the HBO brand occurs, officially launched in Spain just a month ago. Under the auspices of Warner Bros. Discovery, Max is launched on the Spanish market with a very powerful catalog marked by a wide selection of content and a bet decisive for sport, like home of the Paris 2024 Olympic Games. Araimo helps the reader locate Max in the complex platform market and share his vision about hot topics that, possibly, in just one year, will have been surpassed or transformed by others just as surprising.
The path from HBO to Max
Recently, we have witnessed the transformation of HBO Max to Max. What are Max's main strengths in the hyperactive Spanish VOD and streaming market?
While it is true that we were very well positioned with HBO Max, we are completely rebuilding the product. Max is not just an update to HBO Max, but it is a completely new proposition with new features and much more content, which will have a much wider distribution in the market. We talk about the entire Warner Bros. Discovery universe in streaming format: from big Warner Bros. films to HBO series, factual entertainment from Discovery or Eurosport and the broadcast of the Olympic Games. It is a new product with a much broader offering.
We believe that our positioning and our proposal stand out from those of others and, since we think that only a few streaming services will survive in the long term, we aspire to be one of them. Therefore, we must choose our competitors well and position ourselves not only to complement them, but to be able to compete with them properly.
How do you think the public can receive this continuous rebranding that HBO has undergone in recent years?
It is true that, being in full transformation as we were, we felt the need to have a brand that could, in the medium term, synthesize our offer. The HBO Max brand clearly represented a quality seal and was associated with top-level series, which will continue to be the core of our offer along with our movies and sports. In any case, our offer is now broader than before.
“We are expanding considerably the scope and the Max distribution, which will make it reach a completely new customer base”.
From the client's point of view, the transformation can be a little complicated initially, but we believe that in the medium term everyone will be clear about what Max represents and the variety it offers. All Max content, beyond the series, will be characterized by quality.
Furthermore, we must bear in mind that with Max we are expanding considerably the scope and the product distribution, which will make it reach a completely new customer base. Therefore, although it may be complicated for our regular customers, for the new Max it is almost like a new brand.
Max and the production of original content in Spain
While other agents begin to reduce investment in production, Max lands with a wide selection of formats created or adapted ad hoc for Spain. Why is it important for Max to invest in local content?
We firmly believe that if you want to be a global leader, you must have a global core offering very solid. In all key markets in which you have or plan to have a critical mass - such as in Spain, where we already have a critical mass and plan to continue growing -, it is important to complement this global offer with high quality local content.
“We have decided maintain our investment, but slightly modifying the type of content what we produce locally”.
That is why we have decided maintain our investment, but slightly modifying the type of content that we produce locally. In this way, local production will not only focus on series, but will also cover entertainment programs. unscripted top level.
What production models are you exploring together with local companies? Are you migrating, like other agents, to a model away from originals to study other forms of production in which production companies maintain or share the IP with you?
I have to say that at this moment we are flexible. We are exploring all possible options, since the market is different compared to what we had before. I also believe that right now companies have more flexibility than before and the ability to decide which is the best model to produce each content. Therefore, we can choose different types of production for different types of content.
As I mentioned before, we are rethinking our local content production strategy, maintaining a significant investment, while, in some cases, we rethink our production model.
Superaggregators: “Everything is possible”
In the United States we are seeing how agents in the world of streaming and VOD are beginning to jointly offer their services; This brings us back to the cable subscription model…
I think this type of packages will end launching in all markets. We are starting to test this model in the US, which is our main market, so we do not rule out the possibility of offering these packs [Ndr: together with other agents in the sector].
"Offer subscription packages can be beneficial not only for us (…), but also for the customer”.
We believe that offering subscription packages can be beneficial not only for us from an economic or distribution point of view, but also for the client, since the objective of this proposal is to make their lives easier. We believe that it is something that should, ultimately, be studied in all of our main markets. We'll see. At the moment, everything is possible.
In Spain they have recently closed an agreement with Movistar Plus+ or Masorange for the distribution of Max. Beyond these alliances, have you had conversations with other VOD / streaming platforms to offer a joint subscription offer or make the super-aggregator utopia a reality?
As I have told you, we are evaluating all options. The truth is that, at this moment, the only thing we have finalized is the offer we have in the United States. Everything is on the table.
The taboo of abandoning 4K
We are observing how agents like UEFA have decided reverse in 4K and opt for the HD HDR production standard for the Champions League or Euro Cup final. Looking ahead to your coverage of the Olympics. OO., although the channel will be called Eurosport 4K, the content will be offered in Full HD with HDR and Dolby. What is happening with 4K?
I have to be honest. When it comes to distribution – since we are primarily a distributor rather than a producer of 4K content, although we can do everything – it could be easy to distribute content in this resolution through our app. The problem is that the market lacks enough 4K content to justify a radical change in terms of distribution; mainly, for cost reasons. It's something quite obvious.
"I don't want to say that the 4K this finish, but it is true that short term (…) probably not be the most efficient production technology”.
We have decided to broadcast in HDR mainly because its distribution cost is low and because, in addition, it is available in a greater number of homes than 4K. So I don't want to say that 4K is finished, but it is true that in the short term, and especially at this time when everyone is trying to optimize the cost structure, probably not be the most efficient production technology.
Max has made the decision to broadcast Paris 2024 in HD HDR, although OBS will produce the Olympics. OO. in 4K. Beyond the costs to which you have alluded, do you consider that there is no determining demand on the part of 4K users?
The problem is that the number of televisions capable of offering 4K remains small. The mass market still doesn't buy TVs specifically for watching 4K content. Once 4K becomes a commodity, a basic product included in all televisions, there will be no problem in offering more 4K content. However, the 4K has not yet reached critical mass fast enough to justify large investments at this time.
The issue of technological standards is complex. If the critical base you expected is not reached quickly enough, the bet becomes a risk. We should probably wait a little longer for 4K; In fact, as you know, the industry is already developing the 8K and the 16K. Perhaps 4K adoption will progress and eventually reach that critical mass. As of today, it does not exist.
A UX marked by AI
Many analysts consider UX (User Experience) as one of the differentiating factors when choosing one platform or another, along with content or price. What avenues will Max explore to improve UX?
Frankly, technology is becoming a commodity. If you want to compete in the market and become its leader, you have to be a reference in technology. We believe that the artificial intelligence It will become an essential element of any consumer service and will help improve their experience.
“Those will triumph services who know how to combine the human touch of editorial selection with the ability to use artificial intelligence to personalize the service”.
We are gradually introducing AI elements into Max to better serve consumers, which also translates into a more personalized experience. However, sometimes consumers also appreciate being provided a service in a more traditional way. So while I believe technology will play an increasingly important role in serving customers, the editorial touch and human curation will continue to be important. Those services that know how to combine the human touch of editorial selection with the ability to use artificial intelligence to personalize the service. The struggle will revolve around the combination of these two elements.
What is Max's roadmap in Spain in the near future?
We will continue to increase our distribution network, with the aim of being present on all platforms. We will also improve our penetration in D2C (direct-to-consumer) and we will work to be more attractive to the consumer. On the other hand, we will begin to offer new types of local content; As I mentioned, we will launch more non-scripted formats in the second half of the year, as well as a major drama series in early 2025. These contents will be accompanied by high-quality proposals from the US, which will improve our global offering.
Our product will be even more interesting and varied, maintain its distinctive quality in scripted content, and be widely distributed. You can find Max anywhere.
An interview by Sergio Julián Gómez
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