AT&T CFO Defends Warner Bros. Pictures Streaming Movies Concurrently With Theatrical Release

WarnerMedia’s decision to release Warner Bros. Pictures’ entire slate through 2021 — beginning with Wonder Woman 1984 on Christmas Day 2020 — concurrently with streaming access on HBO Max was one of the biggest entertainment stories of 2020. It was also controversial and a shot across the bow to how Hollywood has traditionally distributed major motion pictures.

Speaking Jan. 5 on the virtual Citi Global TMT Conference, retiring AT&T CFO John Stephens said the move, triggered by the ongoing pandemic and shuttered movie theaters, underscored Hollywood’s ongoing migration to distribute content direct to consumers while keeping a foot in the exhibition business.

AT&T CFO John Stephens

“We’re trying to utilize what is really a difficult situation,” Stephens said about the dual release strategy, adding that the studio found itself with a slate of movies “ready for utilization” in an uncertain healthcare environment.

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While declining to offer specifics surrounding the WW84 release, Stephens said management is pleased with what’s going on with HBO Max engagement and with customers.

“We’re utilizing these pieces of content in the best way we can,” he said. “We’re ahead of our [combined HBO, HBO Max sub growth] for the full year at the end of the third quarter [ended Sept. 30].” Stephens said that making theatrical titles available on Max has grown AT&T’s broadband business.

“We are seeing a movement to upgrading to our elite unlimited [data] plan, our highest-tired unlimited plan … and as such we’re seeing those positively impact revenue,” he said.

Indeed, WarnerMedia ended Q3 with more than 38 million combined HBO and HBO Max subscribers. That tally is expected to reach upwards of 50 million by the end of 2021, according to a majority of conference survey respondents.

When asked if the decision to release major movies into the streaming channel had impacted Warner’s ability to attract top talent and creators, Stephens said the studio has a near 100-year record working relationship with talent across the board.

“This is a unique situation” Stephens said. “We can’t change that, that is just the reality. So we’re just working to keep this system moving healthily forward and to utilizing the great content that is already there.”