HBO and HBO Max Hit 36.3 Million Subscribers, Up 5% from End of 2019

AT&T touted the “successful” launch of HBO Max — with the new service helping to boost overall HBO and HBO Max customers by a net 1.7 million over the first six months of 2022.

As of June 30, 2022, 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.

However, AT&T CEO John Stankey said there were 3 million retail subscribers for HBO Max in the quarter since its May 27 launch — and 4.1 million total activations of the HBO Max app across the existing HBO subscriber base. Those numbers imply that the legacy HBO service suffered a net decline in the first half of 2022.

“Customer engagement [for HBO Max] has exceeded our expectations,” Stankey said during AT&T’s second quarter earnings conference call.

Stankey said so far HBO Max weekly streaming hours on average are 70% higher than HBO Now. He noted that WarnerMedia-owned shows are among the most-watched programs on the service, and also claimed customer satisfaction for HBO Max is double that of AT&T’s legacy TV services — but given the massive ongoing erosion in DirecTV and AT&T’s other television services, that may not be saying much.

Stankey emphasized that HBO Max has proven to appeal to “a much broader demographic than our traditional HBO service,” which in turn is “clearly demonstrating the strength of our library in broadening the appeal of the product to more family members.”

AT&T announced the subscriber numbers as part of its second-quarter 2022 earnings, which were hurt by the impact of COVID-19 across all business segments. “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,” 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 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 — the company said activations of the service were highest on AT&T’s own platforms — 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.

Stankey briefly addressed the issue, saying on the Q2 call, “Unfortunately, Amazon has taken an approach of treating HBO Max and its customers differently than other services and their customers.”

WarnerMedia’s goal is to reach 50 million-55 million HBO Max customers in the U.S. by 2025, Stankey has told investors. Also on the road map are international expansion plans and the rollout of a cheaper, ad-supported tier in 2022.

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.

Cynthia Littleton contributed to this report.

Source: Newzandar News

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