HBO Max Reaches 37.7M, Including 17.2M "Activated," Subscribers

AT&T CEO John Stankey talking about HBO Max
Presley Ann/Getty Images for WarnerMedia

AT&T CEO John Stankey talking about HBO Max

"The release of 'Wonder Woman 1984' helped drive our domestic HBO Max and HBO subscribers to more than 41 million, a full two years faster than our initial forecast,” says AT&T CEO John Stankey.

The final few weeks of 2020 proved invaluable for WarnerMedia's HBO Max. The streaming service, buoyed by an eight-months-in-the-making distribution deal with Roku and the Christmas Day release of Wonder Woman 1984, ended the year with 17.17 million activated users, twice as many as at the start of the fourth quarter, AT&T disclosed Wednesday.

HBO Max now reaches 37.7 million total subscribers. That compares with 28.7 million subscribers, including 8.6 million activated users, as of the end of September.

Combined, HBO and HBO Max had 41.5 million U.S. subscribers as of the end of 2020, compared with 38.0 million as of the end of September.

"The release of Wonder Woman 1984 helped drive our domestic HBO Max and HBO subscribers to more than 41 million, a full two years faster than our initial forecast," said AT&T CEO John Stankey.

Launched at the end of May, HBO Max faced a pair of formidable early challenges, overcoming its confusing branding — at the time, WarnerMedia also operated streaming products HBO Now and HBO Go — and its lack of distribution on two major connected TV platforms, Roku and Amazon Fire. Unlike competitor Disney+, which attracted more than 26 million subscribers in its first two months, HBO Max plodded along, adding 4.1 million activated users in its first month.

But interest in the service began to pick up heading in the final few months of 2020 after it struck a distribution deal with Amazon in November and released a content lineup that featured buzzy original series The Flight Attendant and HBO limited series The Undoing.

WarnerMedia 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. In a controversial step, the company followed that up with the Dec. 3 announcement that its entire 2021 film slate would follow the same release plan.

In early December, Stankey revealed that the streamer was nearing 12.6 million activated users. He also argued that WarnerMedia's decision to bring its 2021 Warner Bros. film slate to the streaming service and cinemas could "accelerate that further" and allow the firm to "penetrate the market faster."

For HBO Max, AT&T breaks out activations, because consumers can not only get the streaming service directly from WarnerMedia, but also as an upgrade to their existing HBO subscriptions via their pay TV providers. That, however, requires them to download the HBO Max app on their smart TVs or other devices. The same is true for customers on AT&T's Unlimited wireless and fiber broadband plans. "Activations" count the people who download — or "activate" — the HBO Max app.

On an earnings call with investors, AT&T said that HBO Max's subscriber growth had outpaced the company's original estimates. That's consistent with the positive tone that executives have taken about the early performance of the service. One AT&T executive earlier in January said, "we are pleased with what’s going on with engagement" by HBO Max users and "the response from our customers."

Bernstein analyst Peter Supino in his earnings preview said of HBO Max, "Investors reacted well to the announcement that the company would be releasing its 2021 movie slate direct to consumers via their HBO Max platform. This should drive incremental subs to the platform, but we are still concerned about HBO Max's scale relative to streaming's leaders."

The company has said it hopes to reach 50 million to 55 million HBO Max customers in the U.S. by 2025. WarnerMedia is planning to launch an advertising-supported version of HBO Max in the second quarter of the year, and to begin rolling the service out internationally.

Stankey noted that these launches, paired with an increase in new programming releases following novel coronavirus-related production delays, should help the service gain more momentum: "Our expectations are that we will start to hit our stride as we get into the second quarter."

Jan. 27, 6:50 a.m. Updated with additional AT&T executive commentary from investor call.