AT&T touted the “successful” launch of HBO Max — with the new service helping to boost overall HBO and HBO Max customers by 1.7 million over the first six months of 2020.
As of June 30, 2020, AT&T’s WarnerMedia reported 36.3 million total U.S. subscribers to HBO Max and HBO, up from 34.6 million at Dec. 31, 2019. That’s an increase of 5% over that time period.
AT&T announced the subscriber numbers as part of its second-quarter 2020 earnings. “Our solid execution and focus in a challenging environment delivered significant progress in the quarter, most notably the successful launch of HBO Max, resilient free cash flow and a strengthened balance sheet,” AT&T CEO John Stankey said in prepared remarks. The longtime telco exec and former WarnerMedia boss assumed the chief exec role July 1, taking over for Randall Stephenson.
The investment in HBO Max was a drag on AT&T’s Q2 earnings, reducing adjusted earnings by about $400 million, the telco said.
The premium HBO Max streaming service debuted May 27, stocked with more than 10,000 hours of TV shows, movies and other programming — double what’s available in legacy HBO. WarnerMedia’s standard pricing for HBO Max is $14.99 per month, same as the standalone HBO Now (which is being phased out). The theory: that the company can expand the subscriber base for HBO Max with a broader bucket of fresh originals and library titles.
HBO Max’s initial signups were helped by AT&T’s various bundling and free-trial offers as well as prelaunch promotional pricing. WarnerMedia inked more than a dozen distribution deals for HBO Max with partners including Apple, Google/YouTube TV, Hulu, Samsung and Comcast.
But the HBO Max launch plan — which was to effectively convert the existing HBO base to HBO Max — hit a roadblock in a standoff in deal talks with Roku and Amazon, two of the largest OTT platforms. The disputes center on subscription-revenue sharing terms and ad inventory rights, as well as WarnerMedia’s insistence that HBO Max be offered as a separate app experience whereas Roku and Amazon want to continue reselling HBO as a “channel” through their content-aggregation stores.
WarnerMedia’s goal is to reach 50 million-55 million HBO Max customers in the U.S. by 2025, AT&T CEO John Stankey has told investors. Also on the road map are international expansion plans and the rollout of a cheaper, ad-supported tier in 2021.
WarnerMedia plans to invest $4 billion into HBO Max over the next three years.
In addition to incorporating everything on legacy HBO, HBO Max includes a slate of new originals, full seasons of “Friends,” “The Big Bang Theory,” “Rick and Morty,” and “Pretty Little Liars”; all the films from iconic animation house Studio Ghibli; and movies from Warner Bros., New Line and DC.
But some of the library content WarnerMedia used to woo customers at launch is rolling off the service — all eight “Harry Potter” movies are leaving HBO Max in August after a three-month run. At the same time, HBO Max is adding new titles, including a slate of DC’s Batman movies and “Birds of Prey,” plus “Blade Runner: The Final Cut,” “Jojo Rabbit” and “Richard Jewell.”
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July 23, 2020 at 06:13PM
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HBO Max and HBO Have 36.3 Million Subscribers, Up 5% From End of 2019, AT&T Says - Variety
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