WarnerMedia credits film strategy as HBO Max nears 10 million subs

Godzilla Vs Kong

WarnerMedia-owned streamer HBO Max is approaching 10 million subscribers as it comes up to one year on the market.

The company confirmed that it had added 2.8 million subscribers during the most recent quarter to a total of 9.7 million HBO Max retail subscribers. This is up from 6.9 million at the end of 2020.

The true number of viewers will likely be higher, however, as the 9.7 million total does not include users who have access to the service for free via their cable subscriptions.

Warner attributed a significant amount of this growth to its decision to concurrently release Warner Bros. films in cinemas and on HBO Max, with Godzilla Vs Kong having the biggest viewing audience of any title on HBO Max since its May 2020 launch. Other high profile releases on HBO Max over the most recent period included Zack Snyder’s Justice League and the HBO docuseries Allen V Farrow.

On this strategy, Pascal Desroches, chief financial officer at WarnerMedia owners AT&T, said: “The same-day release of movies in theaters and on HBO Max has been a success. It has provided theaters with a steady flow of content in a pandemic-challenged environment and it’s also been a great catalyst for subscriber growth at HBO.”

Announcing the results, AT&T CEO John Stankey commented: “HBO Max continued to deliver strong subscriber and revenue growth in advance of our international and AVOD launches planned for June.”

Overall, Warner reported that HBO and HBO Max had a combined total of 44.2 million US subscribers, up from 41.5 million at the end of 2020.

Zack Snyder’s Justice League

While the pure HBO Max figures may be somewhat underwhelming compared to the irrepressible rise of Disney+ – which has amassed 40 million US subscribers since launching in November 2019 and a global total of more than 100 million – much has been made of its positive performance compared to Netflix. Q1 2021 was one of Netflix’s slowest quarters on record following a bumper 2020, adding only 450,000 new subscribers in the US and Canada.

AT&T, however, is less concerned with pure subscriber growth, and instead focused on ensuring a positive ARPU as a result of its US$14.99 per month subscription cost. HBO Max’s ARPU is US$11.72, compared to Netflix’s US$14.25 and Disney’s ARPU of just over US$4.

AT&T beat Wall Street financial expectations, with US$43.9bn in revenue, but analysts are still sceptical on HBO Max.

In comments to CNBC, Michael Pachter, analyst at Wedbush said “With only 2.7 million new subscribers, it’s hard to justify killing a large portion of theatrical revenues by supporting HBO Max, and the problem is exacerbated as the economy reopens and more people are vaccinated.”

The analyst however did say that “as long as they are growing, I think they are on the right path.”

AT&T’s other video businesses including DirecTV continue to perform poorly. The telco lost 620,000 premium TV subscribers during the quarter while video revenue for Q1 was down 9.2% to US$6.7 billion.

Lisa Ling

New commissions

In related news, HBO Max as handed a six-part series order to the Take Out, a new original docuseries from Part2 Pictures that follows journalist Lisa Ling as she takes viewers behind the counter and into the lives of the people and families who run some of America’s more than 45,000 Asian restaurants.

Ling, who will executive produce alongside David Shadrack Smith, commented: “It is time that we learn about a community that has been integral to America’s development but has largely been ignored by American history.

“My own family’s path to their American dream started in a Chinese restaurant, and I cannot wait to learn the stories of those whose journey paralleled mine throughout different parts of this country.”

The commission comes just days after the streamer ordered a new unscripted competition series based on the Magic Mike movie franchise, with Channing Tatum and Steven Soderbergh attached.