December 8, 2020
AT&T CEO John Stankey Dec. 8 defended WarnerMedia’s landmark decision to release all 2021 Warner Bros. movies in theaters concurrently with subscription streaming video service HBO Max in the home. Speaking at the UBS Global TMT Virtual Investor confab, Stankey said the move was done in response to the “psyche of the population” during the ongoing pandemic that has decimated the theatrical business through mandated closures, limited seating at operating screens and wary moviegoers.
“We’re all participants in a market that serves customers,” Stankey said. “The longer-term impacts are going to be dictated by what consumers wish to do.”
Contending the streaming video horse has “left the barn,” Stankey said response among existing HBO subscribers to Max continues to resonate. He said adoption is now 12.6 million subs, up from 8.6 million at the end of the most-recent fiscal period. Since launching HBO Max on May 27, AT&T has made the $15 monthly SVOD service free to its 42 million combined HBO pay-TV (and HBO Now) subs in the United States. Adoption of HBO Max has been slow, with fewer than 3 million HBO pay-TV subs signing up through June — a reality driven by confusing access rules and unavailability on the Roku platform.
By comparison, rival streaming service Disney+ generated almost 74 million subs globally in its first year.
Stankey said offering Warner’s theatrical slate in the home adds an incentive to subscribe to HBO Max while affording diehard moviegoers equal access.
“Customers have a tremendous amount of choice as to how they choose to engage with content,” Stankey said. “If we just simply sit here and say, ‘This is about whether or not people go to movie theaters,’ I think we’re missing the broader point. Today, even before WarnerMedia made this decision, customers could go watch great, two-hour content on a variety of competitive services. Customers are going to drive what happens in a market, ultimately.”
The executive said the distribution strategy could change should the new coronavirus vaccine pan out and consumers return to theaters.
“We’re not putting one [distribution channel] over the other,” Stankey said. “This to me seems like a very friendly and innovative approach.”