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WarnerMedia’s HBO and HBO Max streaming service — backed by the day-and-date release of tentpole movies like Godzilla vs. Kong — ended March with 44.2 million subscribers and with a combined 63.9 million worldwide subscribers.
That is up from 41.5 million total HBO Max and HBO domestic subscribers as of the end of 2020, with direct-to-consumer subscription revenues having risen 35.3 percent year-over-year. A year ago, WarnerMedia had 33.1 million HBO and HBO Max subscribers and 53.8 million global subscribers.
AT&T did not break out the specific number of subscribers for its HBO Max streaming platform as it no longer reports “activations,” and instead indicates combined HBO Max and HBO subscriber figures. The telecom giant, led by CEO John Stankey, disclosed the latest figures in its first-quarter earnings report Thursday, with overall AT&T revenues rising 2.7 percent to $43.9 billion on momentum from its core wireless phone business.
“We had another strong quarter of postpaid phone net adds, higher gross adds, lower churn and good growth in Mobility EBITDA. We also continue to increase penetration in markets where we offer fiber broadband and we’re moving quickly to deploy more fiber. HBO Max continued to deliver strong subscriber and revenue growth in advance of our international and AVOD launches planned for June,” Stankey said in a statement ahead of a morning analyst call.
For WarnerMedia, first quarter revenues rose 9.8 percent to $8.5 billion, driven by higher subscription, advertising and content revenues as the media conglomerate continues to recover from the 2020 impacts of the COVID-19 crisis. Subscription revenues were $3.8 billion, up 12.6 percent year-over-year, as the subscriber base for HBO Max and HBO grew.
On the analyst call, Stankey cited WarnerMedia’s “success” with its day-and-date theatrical strategy and a bolstered content slate coming out of the pandemic. He pointed to Godzilla vs. Kong topping the domestic box office and driving new subscriptions to HBO Max as the Warner Bros. studio’s groundbreaking day-and-date strategy brings momentum to the streaming platform.
Stankey argued HBO Max was playing to its “strong suit” by touting day-and-date movie releases to drive subscriber signups. That strategy for WarnerMedia’s HBO Max stirred an early backlash within Hollywood from filmmakers and theater chains, but the AT&T boss defended the move to give streaming subscribers newly released films the same day they are in theaters for no extra cost.
At the end of 2020, WarnerMedia announced that it would make all of its films — including Wonder Woman 1984 and Judas and the Black Messiah — available on HBO Max for the first 30 days that they were also available in theaters. “You can all see there’s probably a compelling rising tide lifting all boats in this case and we feel this is the right call for the moment,” Stankey said.
Advertising revenues increased 18.5 percent to $1.8 billion after the NCAA Division I Men’s Basketball Championship Tournament returned in 2021 to boost cable network fortunes. And content revenues increased 3.5 percent to $3.4 billion on higher sales to HBO Max for theatrical product and higher basic networks licensing. That was partly offset by lower TV product licensing from prior-year licensing to HBO Max.
During an investor day in mid-March, AT&T said it expects to reach 120 million to 150 million HBO Max and HBO subscribers worldwide by the end of 2025, well above its October 2019 forecast of 75 million to 90 million. It expects to end 2021 with 67 million to 70 million subscribers worldwide, up from about 61 million at the end of 2020.
The company back then also said that an advertising-supported version of the streamer would launch in the U.S. in June and that HBO Max would become available in 60 markets outside the United States this year. “We just think it’s a really smart place to be for that segment of the market,” Stankey said of the upcoming AVOD offering of HBO Max as WarnerMedia targets price-sensitive consumers.
“When there are multiple streaming services out there, people are making decisions to reorder their investment in home entertainment and are going to be more price-sensitive,” he added.
Consumer interest in HBO Max started picking up heading into the final months of 2020 when WarnerMedia struck a distribution deal with Amazon and featured a lineup that included buzzy original series The Flight Attendant and HBO limited series The Undoing. WarnerMedia also signaled the importance of HBO Max to its long-term strategy when it unveiled a hybrid release strategy for Wonder Woman 1984, premiering it in theaters where they were open and on HBO Max in the U.S. on Christmas Day.
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