AT&T's (NYSE:T) WarnerMedia will launch HBO Max in April, and a key metric of success for the service will be improving retention among HBO Now subscribers. 

Due to the month-to-month nature of streaming video subscriptions, HBO Now subscribers can cancel service anytime and rejoin later if they want. The company saw significant subscriber fluctuations around each season of Game of Thrones.

HBO Max -- which will include everything on HBO Now, a big back catalog of licensed content, and several exclusive originals -- could help retain HBO Now subscribers. In fact, that's one of the main reasons WarnerMedia is reportedly considering pricing the service at the same $15 per month as HBO Now.

But with the price unknown, many HBO Now subscribers aren't planning to upgrade to HBO Max. Just 30% of HBO Now subscribers intend to switch to HBO Max in April, according to a recent poll from HarrisX. By comparison, 38% of HBO Now subscribers plan to pay for Disney's (NYSE:DIS) upcoming service, Disney+.

The HBO Max logo.

Image source: AT&T.

Pushing for an upgrade

The relatively low percentage of respondents saying they'll upgrade from HBO Now or HBO Go to HBO Max is especially surprising compared to the percentage of respondents that said they'll add Disney+ to their Hulu subscription. 32% of Hulu subscribers intend to sign up for Disney+, potentially taking advantage of Disney's $13-per-month bundle with Disney+, Hulu, and ESPN+.

Hulu costs $6 per month, so Disney is convincing users to spend $7 per month more to expand the amount of content coming into their homes from the media company. We don't have pricing for HBO Max, but if it charges $7 more per month than HBO Now -- i.e., $22 per month -- the service will be practically dead on arrival. HBO Now subscribers are likely looking at a very low marginal price increase compared to Disney's bundle.

But many consumers seem to think HBO Max isn't worth paying more for, especially if they're content to watch just one or two shows from HBO. HBO Now subscribers will benefit from the $500 million increase in HBO's original content budget just as much as HBO Max subscribers. And nobody's paying more for a streaming service just to watch reruns of Friends and Fresh Prince.

Indeed, the HarrisX poll found the biggest drivers of subscriptions for HBO Max is original content and its library of movies -- most of which can be had with an HBO Now subscription. Cost of the service was less of a factor compared to Disney+ or Comcast's forthcoming Peacock service.

All the more reason to keep the price as low as possible

Very few people will sign up for a new streaming service just to access the back catalog, but they won't say no to it if it doesn't cost them any extra. Importantly, familiar content can play a key role in keeping viewers engaged with the service and thus reduce subscriber churn.

WarnerMedia will face an even bigger challenge keeping HBO subscribers engaged going forward with the various new streaming services coming to the market, some at particularly low prices. So, if it can provide some comfort TV to tide subscribers over until the next big HBO series debuts, it'll likely prevent a lot more subscribers from jumping ship and seeing what else is available.

Keeping a subscriber is just as valuable -- if not more so -- as attracting a new one. While WarnerMedia has ambitions of reaching 70 million subscribers with HBO Max, it needs to ensure it can at least grab the low-hanging fruit first. If it can't convert and retain HBO Now subscribers at a rate better than the competition like Disney can upgrade their existing subscribers, it has a lot more to worry about than how to scale to 70 million.