AT&T: HBO, HBO Max Ended 2021 With 73.8 Million Subs

WarnerMedia’s HBO and HBO Max platforms ended 2021 with an estimated 73.8 million combined subscribers — exceeding company estimates of 70 million to 73 million subs, according to an AT&T regulatory filing.

The disclosure comes ahead of the appearance today (Jan. 5) of the telecom’s CFO, Pascal Desroches, at the Citi AppsEconomy Conference.

The data would suggest WarnerMedia weathered two significant hurdles in 2021: The same-day theatrical/streaming movie release strategy, and the third quarter loss of almost 2 million HBO Max subs after the service’s departure from the Amazon Channels platform.

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Critics contend that after a strong start with Wonder Woman 1984 and Godzilla vs Kong, Warner Bros. theatrical releases suffered at the box office due to their concurrent free availability on Max.

Indeed, just two of the studio’s North American theatrical releases (Godzilla vs. Kong and Dune) sold more than $100 million worth of tickets in North America. Warner generated less than $650 million at the domestic box office, fourth among major studios.

The new year finds AT&T finalizing a $43 billion spin-off of WarnerMedia to Discovery for the new proposed Warner Bros. Discovery media company. With WarnerMedia CEO Jason Kilar likely exiting the company, the former Hulu boss continues to defend his controversial theatrical/streaming release strategy.

“We were the first one over the wall with this,” Kilar said in a media interview last fall. “So, we took a position of leadership. We’re the only company, for the last year-plus, that has delivered 18 movies. Nobody else has done that, nobody else has come even close. If you take a look at what the exhibitors have been saying, we were their lifeline in their period of greatest need.”

AT&T CFO: HBO Max Becoming ‘Top Two’ SVOD Competitor in Europe

HBO Max only began rolling out its subscription streaming video platform in Europe in September, with additional markets in Sweden, Denmark, Norway, Finland, Spain and Andorra launched last month. The venerable brand is apparently resonating with European consumers.

Speaking Nov. 18 at the Morgan Stanley European Technology, Media & Telecom Conference in Dallas, AT&T CFO Pascal Desroches said Max has generated so much interest that it now rates highly in a SVOD market that includes Netflix, Disney+ and Amazon Prime Video, among others. Desroches said that trends are in line with AT&T’s expectations.

AT&T CFO Pascal Desroches

“In fact, while it is still early, the initial data suggests that in most international markets Max is rising to become a top two direct-to-consumer provider in terms of subscribers and revenue,” Desroches said.

Given this, the executive said he feels good about Max’s global positioning and remains confident in its longer-term global expansion. AT&T now expects HBO and HBO Max to track between 120 million and 150 million subscribers worldwide by the end of 2025.

Strong numbers as AT&T attempts to finalize a minority ownership/majority control asset sale to WarnerMedia to Discovery Inc. Desroches said he continues to expect the transaction to close by mid-2022.

AT&T CFO: WarnerMedia Sale to Discovery Expected to Close First Half of 2022

AT&T’s WarnerMedia minority stake sale to Discovery remains on schedule to close in the first six months of 2022, according to AT&T CFO Pascal Desroches.

Speaking at the virtual Bank of America Media, Communications & Entertainment Conference, Desroches said the $43 billion deal affording Discovery operating control of Warner Bros. Pictures, HBO and Turner is in compliance with government rules surrounding antitrust issues, adding he saw no reason why the merger wouldn’t be approved.

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“We feel really good about the ability of this to be approved,” he said.

Pascal Desroches

After racking up $180 billion in debt acquiring assets, including Time Warner (now WarnerMedia) and DirecTV, AT&T has been selling off minority stakes (and operating control) in both companies and others in an effort to reduce debt, generate cash and focus on its legacy telecom business, in addition to broadband and 5G distribution.

The telecom is selling Vrio, the Latin American operating unit of DirecTV with more than 10 million subscribers, to a private Argentinian company. This week it announced a reported $50 million sale of tabloid channel TMZ to Fox Corp.

AT&T CEO John Stankey has also suggested a possible merger between DirecTV and Dish Network assets — a move the latter’s founder/chairman Charlie Ergen has been advocating for years.