What Sky’s Max Deal Means for All Viewers

After months of speculation, Sky surprised us all yesterday with its announcement that HBO streaming service Max would launch a week from now on its platforms.

The big revelation wasn’t so much confirmation that Sky would be the home of Max but the speed of the roll-out, with SoHo being rebranded HBO and the Max hub going live from October 30.

Yet only four weeks ago HBO parent Warner Bros, Discovery was saying, “Nothing to see here, folks,” when quizzed about NZ’s absence from the list of countries that would be part of Max’s latest expansion in Southeast Asia and Australia. Yet clearly that wasn’t all, folks.

This site posted NZ would be included based on a Hollywood Reporter account that WBD later advised was incorrect and which THR amended to exclude this territory.

But one now has to wonder if THR merely jumped the gun on the announcement rather than mistakenly lumping NZ in with neighbouring territories.

When asked if NZ was on Max’s radar, a WBD spokeswoman said at the time, “We look at all markets individually, and the New Zealand and Australia media landscapes are quite distinct.

“New Zealand remains an attractive market for us with regards to Max but we have nothing to announce at this time.”

That sounded reminiscent of what a Paramount Global spokeswoman said when Paramount+ launched in Australia — but not here — three years ago.

However, now Max will be available here months ahead of its early 2025 debut across the Tasman.

The difference is WBD will be setting up a direct-to-consumer (DTC) Max model in Australia whereas here it will be in partnership with Sky.

That always seemed most likely given strength of the long-standing relationship between the two and how WBD is debuting Max in other smaller territories, where the economics of setting up a streaming service from scratch are even tougher than in much larger markets (WBD last year lost $US107 million dollars on its DTC business).

Paramount+ and Peacock have done a ‘lite’ version of this with their TVNZ+ arrangements. They don’t have hubs on TVNZ’s streaming platform, and the scale of content is much less, but unofficially it is NZ’s home to both services.

There are pros and cons to these pacts for Kiwis. The biggest advantage is we can stream US streaming content for free on TVNZ+ while Sky Entertainment and Neon customers won’t have to pay extra to access Max as a premium option on the Sky Box, Sky Pod, Sky Go or Neon.

Remember, when SoHo launched, Sky subscribers had to fork out another $10 a month to view the channel (as they do now to access Rialto and Arts).

The downside is TVNZ+, Sky Go and Neon max out at 1080p, so for the time being native 4K content can’t stream in the higher resolution here.

Sky has yet to confirm if the Max hub on its Sky Box or Sky Pod will offer 4K streams. Technically it’s as feasible as Sky’s third-party apps Netflix and Disney+ streaming in 4K.

But with Sky not launching 4K broadcasts until next year, which are expected to be largely limited to sport, offering one of its own premium options in the resolution without being able to charge extra seems unlikely at this stage.

While the new HBO/Max deal is a huge boon for Sky’s pay channels, not so for its free-to-air network. One of the perks of Sky’s HBO deal for non-subscribers has been the amazing amount of HBO fare that’s been broadcast on Sky Open.

With SoHo becoming the exclusive linear home of HBO, that pipeline is about to dry up.

When asked if Sky Open would continue to broadcast signature HBO comedies and dramas, a Sky spokeswoman said: “All HBO content will be available within the Max hub and on the HBO channel for Sky and Neon customers.”

This new approach would explain why Sky last month abruptly pulled a raft of HBO series from Sky Open.

SoHo’s HBO rebranding isn’t as dramatic, given it’s always been the linear home of HBO in this market, but it does mean series sourced from from the likes of Showtime, FX and Sky Atlantic, or even local Sky Originals, will no longer air on the channel.

“Shows that used to play on SoHo that are not HBO/WBD content will continue to be easily accessible through Neon and on other Sky Entertainment channels,” the spokeswoman said, citing Sky 5 and Vibe.

Overall, though, the Max deal is a big win for viewers and Sky, which, after years of uncertainly about its future firepower in the streaming age, now has branded channels from two of the world’s top suppliers — WBD/HBO and the BBC — and streaming libraries that dwarf those of WBD’s own ThreeNow and TVNZ+.

Already it’s paying dividends. As Sky Chief Executive Sophie Moloney said yesterday in a statement to the NZ Stock Exchange: “This strategically significant agreement also delivers for our investors, having been secured on improved commercial terms, aligned to our stated targets.”

She explained the nature and timing of the new agreement, which supersedes the previous Sky-HBO deal, will see Sky recognising a “one-off, non-cash acceleration of programming amortisation” of $6 million-$7 million.

At the same time, Sky will receive a cash payment of $4 million-$5 million from WBD for prepaid content at the October 30 launch date.

“This agreement will generate a Free Cash Flow upside in H1 FY25, with the finalised financial impacts to be flowed through at the Half Year.”