May 13, 2021
WarnerMedia CEO Jason Kilar said the average HBO Max subscriber spends two hours a day streaming content, engagement driven in part by Warner Bros. Pictures theatrical movies and HBO original series “The Nevers” and “Mare of Easttown,” among others.
Speaking May 13 at the MoffettNathanson Eighth Annual Media & Communications Summit, Kilar didn’t disclose many new details, such as the price point for the pending ad-supported Max, acting instead as cheerleader for WarnerMedia’s wide-ranging forays into streaming video distribution.
Kilar said that when dividing the total number of active subscribers on a given day by the number of hours that are consumed on a given day, the data revealed two hours.
“[The engagement] hours are truly remarkable, and certainly in excess of where I thought we would be,” he said. “And I’ve been in the middle of this [SVOD] rodeo for a fair bit, dating back to the first days of Hulu.”
Kilar cited the recent TCM Film Festival as an example of curated content, including “unexpected gems at just the right moment,” that he said resonated with both pay-TV and HBO Max subs.
“Going back to The Wizard of Oz all the way up to Godzilla vs. Kong, how you curate and do it in a thoughtful way, beyond just algorithms, is really the secret to the future of delighting customers on the internet.”
As previously disclosed, Max is expanding into 60 countries, including 39 by the end of the quarter throughout Latin America, and another 21 countries by the end of the year. Kilar said the company would not increase expansion/subscriber guidance, saying Max’s rollout as been good since the start of the year.
“There’s just a lot of wind in the sails,” Kilar said. “Consumers are responding to Max. We added six times of the number of [U.S.] subs in the first quarter. That’s what momentum feels like.”
HBO and HBO Max ended the quarter with a combined 44.2 million subs.
When asked about Turner Sports adding the National Hockey League to its portfolio of National Basketball Association, Major League Baseball and NCAA College Basketball, and the potential for live sports to play a bigger role on Max, Kilar’s response: “Absolutely.”
“We have the [SVOD] rights,” he said. “We were very careful to get those rights. While we don’t have plans for this year, absolutely we could see that down the road. When we orchestrated Max, it was consciously not to be defined by just on-demand programming.”
Kilar again defended his decision to release Warner’s entire 2021 theatrical mover slate on Max concurrently. Admitting mistakes were made “at the edges,” regarding the decision, Kilar stressed that for the most part, he “couldn’t be happier” with the strategy that he also admitted would be scaled back in 2022.
“You should expect us to lean into theatrical distribution for decades and decades to come,” he said, adding that distribution windows will continue to change. For example, some tentpole titles will begin in theaters, while other movies stream concurrently on Max.
“It’s going to be fascinating how that all evolves,” Kilar said. “The world [of movie distribution] will change and we all need to change with it. In many ways we’re leading that. And I’m very proud that were leading like we have this year.”
Finally, Kilar didn’t disclose pricing on the planned rollout of an ad-supported version of Max later this year. Max currently costs $14.99 monthly — the highest of any SVOD service. Kilar said the AVOD option would be priced so that WarnerMedia is “economically indifferent” whether a consumer chooses ad-supported or ad-free Max.
“We want to make sure that we’re not creating a price that causes us to root one way or another,” he said. “The minute the company starts to [take sides], there’s risk they could be at odds what is best for an individual customer.”