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The update from the telecom giant, in a regulatory filing before the stock market open, came in advance of a session with AT&T CEO John Stankey at the Citi AppsEconomy Conference.
WarnerMedia had in July raised its year-end 2021 guidance to 70 million-73 million global HBO Max/HBO subscribers from 67 million-70 million. Back then, it had touted a “strong” fourth-quarter content slate at HBO Max, including Succession, Dune and The Matrix Resurrections. The streamer also launched, in December, its Sex and the City sequel series And Just Like That.
Management has since also said it expected to end the year near the high end of its target range. Wednesday’s regulatory filing included a press release that the company also issued. “AT&T ended the year with approximately 73.8 million total global HBO Max and HBO subscribers, ahead of management’s prior guidance,” it said.
Global HBO and HBO Max subscribers had risen by 1.9 million to 69.4 million in the third quarter, from around 67.5 million as of mid-year 2021, AT&T had disclosed in October. It cited “strong international and ad-supported subscriber growth,” which offset a user hit related to a strategic decision to remove the HBO subscription option from Amazon Prime Channels.
HBO Max launched in Latin America toward the end of the second quarter and in its first European markets in the final quarter of 2021. It also brought to market its advertising-supported service tier in June.
“We have seen very healthy adoption of that version of the service,” WarnerMedia CEO Jason Kilar told The Hollywood Reporter on Wednesday about the ad-based tier. “And it makes sense because when a customer is empowered with choice, where they can either have a higher-priced ad-free service or one that’s more affordable made possible by the presence of thoughtfully executed advertising, I think that’s a really good situation for customers. So we are seeing a lot of consumers choose the ad-supported option, and it’s early days, it’s only been about six months. But we are quite excited with the response that we have seen and very excited about where it’s going to go in 2022.”
Kilar also lauded his team for having launched HBO Max about 19 months ago in the U.S. and now offering it in 46 markets. “We have seen growth in all the markets, in all the regions, and that includes Europe, Latin America and that includes the U.S. market,” he said.
Stankey, during a virtual investor conference session Wednesday, argued that the outperformance came from “really good international launches,” saying the early European market starts have been “really strong.”
Asked about key original series and film releases that helped HBO Max top its own targets for 2021, Kilar said: “It’s not one series or one movie that drove the growth throughout the year, it really was consistent execution throughout all four quarters. The business is not about what you do, but about what you do consistently. And this team and our creative partners have delivered hits each and every quarter.” He mentioned the likes of And Just Like That, The Sex Lives of College Girls, Succession, Mare of Easttown, Friends: The Reunion and the various Warner movies of 2021. “All of these things mattered throughout the course of the year,” the WarnerMedia CEO said.
Kilar also touted that “we broke new records” in terms of engagement at HBO Max, a day after the streamer said that December marked its best month since its May 2020 launch in terms of hours viewed. That is key, “because we want to be a daily habit,” Kilar explained. “It is just one of the many reasons why we are very excited about HBO Max, which is a combination of engagement, absolute number of subscribers and then growth — each and every quarter across 2021 — growth that a lot of our peers aren’t seeing, and that’s a credit to this great team.”
Stankey said that the company’s HBO Max engagement goal originally was over one hour a day, but the service was now “so far beyond that.” He also touted new features and functions being added and argued that “we really haven’t hit our full stride” yet as production schedules are still coming back from coronavirus-related disruptions.
AT&T had said in March that HBO Max and HBO would reach between 120 million and 150 million on a combined basis by the end of 2025, up from a previous forecast of between 75 million and 90 million. Touting “fabulous execution,” Stankey on Wednesday said that overall the WarnerMedia team had “hit the ball out of the park” with HBO Max in 2021. He argued that “some people were wrongfully skeptical” about HBO Max early on, crediting Kilar and his team for proving them wrong.
Wednesday’s company update before his appearance also said that AT&T recorded 3.2 million postpaid phone net user additions in 2021, its highest annual net adds figure “in more than a decade, as the company continues to benefit from strong network performance and its disciplined and consistent go-to-market strategy.”
Full-year 2021 fiber internet net user additions totaled about 1 million, “the fourth consecutive year in which the company has added 1 million or more fiber subscribers,” AT&T said.
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