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Going global has been good business for Max. Since the video streamer’s debut in 39 Latin American and Caribbean countries a year ago, it has expanded to more than 70 markets globally, including Europe and Asia. These new audiences have helped grow its user base. In its most recently reported quarter, Max added 7.2 million global subscribers, bringing its total subscriber count to 110 million. As its audience grows, Max is also focusing on premium content and cracking down on password-sharing. JB Perrette, president and CEO of Warner Bros. Discovery global streaming and games, appeared on Fast Company‘s Most Innovative Companies podcast to talk Max’s international expansion, how it leverages existing IP, and how the company is using AI to improve the streaming experience. Youve said that globalization is the biggest aspect of Maxs growth efforts. Why is that? The media business has always been a global business, but it’s been global as a collection of local or regional players. The advent of streaming has enabled an ability to program and entertain a global audience. We have franchises and intellectual propertylike DC characters or Harry Potterthat has global fan bases. Our original content like House of Dragon and Euphoria also has global fan bases. We used to only be able to tap into portions of that base and then we’d sell those content rights to players in local markets. With the advent of streaming, were able to do it all ourselves. Long term we’re very bullish on what this means from the consumer standpoint and from a business perspective. Having a business that has all the advantages and the cost leverage of a global scale is an attractive and long-term lucrative business. Given the opportunity for global expansion, why did it take you so long to launch outside the U.S.? This company was born out of a legacy Warner media business and a legacy Discovery company that came together about two and a half years ago. Both companies have been very active globally, but they had been pursuing different strategies. We spent the first 12 to 18 months rebuilding the technology platform and the product itself to deliver [a better] experience, and support live events, high concurrency entertainment, and more features. We started it in May 2023 in the U S. At the beginning of 2024, Max was only available in one market with that new platform and new product. At the end of 2024, we [were] in 74 markets. Were in Latin America, key markets in Europe, in Asia, and obviously the U.S. Has your international expansion changed your programming? We already have a history of producing great local content around the world in Europe and Latin America in particular. We then have augmented it over these last few years by producing more local originals just for Max. You’re starting to see the fruits of that and you’re starting to see that content do great numbers in its regional market. We just did a series based on the book and movie Like Water for Chocolate that came out in Mexico. Were leveraging franchises around the world that we may not necessarily own and were starting to see those stories travel better, because while they may be in different languages, theyre universal in themes. What are some of the product improvements youre trying to make over the next couple of years? Our head of product likes to say that the product journey is a game of inches. So literally the product road map and the feature improvements are hundreds of different small things. We’ve rolled out this back half of this year what we call whole page optimization, which uses algorithms to recommend content based on what youve watched. The key art that shows up should also be personalized based on what we think is most appealing to you. You recently rolled out an ad-supported tier. How does that fit in with your strategy? If you exclude markets that we can’t get into like China, Russia, and India, there’s about 650 million broadband households [that could subscribe to Max]. We still have over close to half the world to get after. With our ad-supported offering, we can attract different customer bases that have different profiles. There are customers around the world who are more price sensitive and are willing to pay, you know, 30, 40, 50% less and still get [access to] our content. As you roll out in more markets around the world that have lower income or GDP per capita, [having an ad-supported tier] is a way to tap into more customers. Netflix was focused on subscriber growth for a long time. Now the company is focused on turning a profit. How do you balance those two factors at Max? As the leader in the space, they have the great advantage of already having reached a lot of scale around the world. Not surprisingly, at some point, you can’t keep growing forever in terms of that scale. I think what they’ve said about no longer reporting subscribers starting in next year is an acknowledgement of the fact that theyre becoming slightly more mature as a business. We’re in a very different position. We’re late to the party. The good news is we still have a lot of growth ahead of us over these next two years. We have opportunities [to acquire] tens of millions of subscribers as we finish our global rollout and demonstrate a better content lineup. That growth continues to be really important for us to report. Nobody has done profit and growth at the same time. I would argue that Max and WBD are the pioneers of that. We need to be able to show that this is a legitimate business and that we can grow it. We talk about streaming consolidation a lot at the office. Ten years from now, are we just going to see one or two dominant services? We’re an IP and storytelling company. If youre a fan of Batman, youre not going to get it anywhere else. If youre a fan of Harry Potter, youre not going to get it anywhere else. Same for Superman, or 90 Day Fiancé. Thats what makes us unique. So I don’t believe its a winner-takes-all situation. I don’t think there’s a monopoly on ideas or great stories. The number of streamers will shrink down, but it wont just be due to M&A activity. Therell be some of that, but youre also going to see creative partnerships, like our Disney bundle. How is AI factoring into your business? Right now AI is used on the operating side, or the process side. Its helping distill and speed up processes. We were talking earlier about creating more video, interstitials or, trailers or break-in moments to be able to show you clips from the series in the streaming product. For some of the content, we have trailers, but trailers arent necessarily always the best selling proposition. We’re leveraging different AI tools to help us take a first cut. A person can prompt AI with Pick up all the chatter that exists in the internet space about peoples favorite moments from the show, digest that, and give us five different 30-second edits of this series or movie that have the high likelihood of hitting the mark with customers. Then a human looks at those five cuts and makes a judgment as o the best one. Prior to those AI-enabled tools coming out, we would have had to spend a lot of time and a lot of money and a lot of effort just trying to get to those cuts. Were also using AI to figure out where to insert ad breaks on our ad-supported tier. We may be able to come up with an ad break methodology that is dynamic rather than one size fits all. Were also using it for closed-captioning. A lot of great material on Max comes from existing IP. The White Lotus sort of came out of nowhere during the pandemic. Do you think theres still a future for that kind of non-IP based hit? One hundred percent. Nobody is better in the business when it comes to creating new breakouts. If you think of the track record of HBO, the vast majority of stories they’ve told are not coming from generally known media. The top four series right now for HBO are The Last of Us, Euphoria, The White Lotus, and House of Dragon. Euphoria is a true original, so is The White Lotus. Were doing more with existing franchises, but were not doing that instead of coming up with original ideas. Its a complement rather than a substitution.
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E-Commerce
It’s the end of an era for surf-and-skate-inspired clothing enthusiasts, as some once-beloved stores close their doors. Liberated Brands, which owns Billabong, Quicksilver, Volcom, Roxy, and other brands, filed for Chapter 11 bankruptcy in Delaware this week. As a result, 120 stores across the U.S. owned by the company will close. The company will also close its international offices, and has laid off 1,400 employees. In a declaration filed along with the Chapter 11 petition, CEO Todd Hymel blamed the rise of fast fashion brands, as well as high interest rates and inflation, for the brand’s demise. “The average consumer has shifted their spending away from discretionary products such as those offered by Liberated, Hymel said in the court filing. Consumers can cheaply, quickly, and easily order low-quality clothing garments from fast fashion powerhouses and have such goods delivered within days.” Just a few years ago, Liberated was booming. From 2021 to 2022, it more than doubled the number of retail locations it owned, going from 67 stores to 140 locations. It also took on additional brand licenses under New York-based Authentic Brands Group (ABG). But in recent years, inflation and supply chain issues began to hit the company hard. As more people pulled back on discretionary purchases or turned toward budget brands, more Liberated-owned stores began underperforming. In December 2024, ABG withdrew its licenses. In a statement, Liberated said it has worked tirelessly over the last year to propel these iconic brands forward, but a volatile global economy, consumer spending changes amid a rising cost of living and inflationary pressures have all taken a heavy toll.” Luckily, fans of the surf-and-skate-inspired clothing won’t have to look too hard to find it after the bankruptcy. The individual brands are already sold at other retailers including Dick’s Sporting Goods, PacSun, and Kohl’s. As Liberated winds down, it will be looking for more wholesale partners to continue selling the products. Meanwhile, the fast fashion industry, which targets young shoppers, is certainly booming. The clothes are cheaply made and affordable, but the industry’s high energy use, toxic chemicals, and the reality of how many briefly worn items end up in landfills all point to how detrimental fast fashion is for the planet. However, 2022 data from ThredUp suggested there’s an addictive nature to fast fashion brands like Shein, Temu, and others, despite the fact that the environmental strain is massive.
Category:
E-Commerce
Federal employees have until 11:59 p.m. to decide whether to take a deferred resignation offer, which the Trump administration says would allow workers to leave their jobs yet retain pay and benefits through the end of September. The credibility and legality of this unprecedented proposal has since been widely challenged, as the administration hasnt received budget authorization from Congress for any buyout program. The Wall Street Journal reports that more than 40,000 employees, or about 2% of the federal workforce, have taken the offer as of February 5, a number far below the 510% target set by the Trump administration. One worker who just finished a multiyear contract with the Department of Commerce, and whose employment was personally unaffected by the resignation offer, says she worries that this will be the most massive brain-drain in U.S. history, and the result of employer-led abuse. (Fast Company has agreed to not use her name due to fear of retaliation, but has verified her identity.) Federal employees describe a workplace of plummeting morale and ratcheting anxiety. Some are still considering whether to take the buyout and alleviate the suspense about potential future layoffs. (Nearly all USAID staffers have been put on leave, following an announcement on February 7, and more than 400 contractors were laid off a week before.) Others say they wont be swayed, even amid the stress and threats. Bracing for further backlash and retaliation as tonights deadline passes, employees are sharing around a private document of resources with the names of legal aid organizations, employment rights groups, attorneys, and Congressional contacts. An employee at the Federal Trade Commission, who also did not want to be named for fear of retaliation, told Fast Company that a lot of us are terrified of speaking, but were bursting at the seams. Workers are trying to continue on with business as usual, but the threat of losing their jobs is holding up progress. Sources Fast Company spoke with reported updating their résumés or putting in the bare minimum until its clear what will happen after 11:59 p.m. tonight. Some say theyre downloading performance evaluation scores, fearing that they may be illicitly edited to provide grounds for dismissal later on. Many of those who are refusing to take the deferred resignation say theyre doing so in a spirit of defiance. The top post on the Reddit forum r/fednews is a declaration, which has been upvoted 16,000 times, deeming February 6 Hold the Line Day,” where each year we will celebrate the federal employees who have dedicated themselves to holding the line by ignoring and rejecting the markedly illegal and harassing emails from [the Office of Personnel Management]. Commenters write about their resolve in spite of fear and anxiety. I know it [sic] were being pushed down and demoralized right nowbut please stay the course, one poster writes. Its so confusing and wrong on so many levels. Dont quit. You mean a great deal to this country. Your dedication and love for our country will stand the test of time. Its an extremely sad and confusing time for all of us. No better time than now for all of us to stick together. In response to the OPMs buyout offer email, whose subject line was Fork in the Road, some federal workers are also adopting spoons as a symbol of defiance. Getting a job in the private sector isnt a worry for the federal employees who spoke to Fast Company. In fact, many are confident they can find jobs in the private sector that pay significantly more. But for many who choose to work for the government, thats not the point. People who do this work do it because of the mission, the former contractor says. The FTC worker says hes not going to take the buyout because hes curious to see what it will be like on the other side of the deadline. Moreover, hes not willing to be intimidated by what he believes are scare tactics. Theyre gonna have to shake me off like a tick on a cows ass, he says.
Category:
E-Commerce
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