I assume they get "monetization" from Youtube and they don't need to worry about hosting or discovery. Probably better than doing nothing with these films.
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* https://www.yahoo.com/tech/sony-succeeded-becoming-powerful-...
When WB started all this it wasn't clear what the winning strategy was going to be. Now that it is clearer, they're just following.
HBO Max was an incredibly lean org, around 200-300 engineers at launch, 1/10th the size of its competitors but we launched a similar scaled service (tens of millions of domestic users, followed up by international launches one after another).
IMHO once COVID ended and HBO Max just became a streaming destination instead of having movies "launched" on it, they'd be just fine in terms of profit (and indeed iirc the successor Max service is profitable). First releasing big block busters doesn't drive enough user growth to pay for the movie, but if you have an existing content pipeline then having a streaming service as another delivery platform becomes reasonable.
As an aside, props to the team. It's been a while but I remember being pleasantly surprised after getting shuffled over from HBO GO. It's even more impressive to know it was such a small team compared to other services.
The only company that actually makes good money from being a content middleman is, somehow, YouTube. I don't know how they do it. YouTube is among the greatest businesses in human history.
In addition to that, whenever users are just starting out, their videos still get ad rolls but the creator doesn't get any money. That's millions of new videos every day that Youtube can monetize until those creators are eligible to collect the checks for themself (if ever).
Also, YouTube does aggressive caching of very old videos that have very few views. You might need to wait 10 seconds for YT to fetch the video from cold storage before watching, but in the grand scheme of things, it's worth it to them.
Google had the infrastructure, expertise, experience, and an army of top tier coders to execute on any engineering challenger, all of that even before it acquired YouTube.
Google is mainly an ads business. An expertise edge not only in engineering at large scale, but also in the delivery of web ads. And, given their ads business perform on profiling people, YouTube consumption habits feed the rest of the beast.
If these didn't skip your kind, yet still wondering how did they do it, the following were crucial to make Google unique in their ability to succeed with YouTube (and the rest)
- An engineering first company. They hire wagons of product people and managers, but when things don't turn out positive they switch back to their roots. As an anecdote, on day the CEO felt things were going south. Fired all (probably just most) managers and tasked engineers to figure things out.
- A coherent vision. Google doesn't jump on where's the hype. Their position in A.I recently perhaps couldn't resist the pressure. It sticks to the core competencies while building experimental products on green fields that fit in growing the core business.
- Long term. Clearly Google has so far resisted to make a quick buck. The no evil slogan is gone, but the spirit remain in building long term value. That kept them from tarnishing their reputation while reaping the amounts of profits once everyone could only swear by their products (mail, drive, YouTube, of course search, Android thriving as now the only remaining competitor to iOS, if any other company had acquired Android in that shape when Google swooped it, it would have given up on it seeing how long the road was about to take to make it a viable mobile consumer product)
How did they do it? Google is in the top 5 of all companies that have ever existed. Takes more than a genius and plenty of humbleness to achieve this feat.