HBO Max nears 70M subscribers, on track to hit 2021 guidance

HBO and HBO Max reached 69.4 million total global subscribers at the end of the third quarter, putting AT&T in good shape to hit its year-end guidance for the service.

The service grew by 12.5 million subscribers year over year and domestic HBO and HBO Max subscribers hit 45.2 million, up 7.1 million in past year. AT&T said it expects HBO and HBO Max to end 2021 at around 73 million subscribers, which is the high end of its previously issued guidance. The company has forecast between 120 million and 150 million total subscribers by the end of 2025.

Total WarnerMedia revenues rose 14.2% to $8.4 billion, of which direct-to-consumer subscription revenues accounted for about 25%. AT&T finalized its deal for spin off DirecTV, U-verse and AT&T TV during the third quarter and said it’s still on track to close its deal to spin off WarnerMedia and combine it with Discovery, Inc. by mid-2022. During the third quarter, WarnerMedia’s revenues saw an approximate $200 million impact from DirecTV shared advertising revenue costs.

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WarnerMedia also recorded $3.1 billion in content and other revenues, up 31.7% thanks to higher TV licensing and higher theatrical. However, advertising revenues dropped 12.4% to $1.4 billion due to timing of the NBA season in the year-ago quarter and lower political ad spending year over year.

The third quarter was the first full quarter of availability for HBO Max’s advertising-supported tier and the company said demand for the new less expensive product, along with growth in European and Latin American markets, were more than enough to offset the impact of pulling HBO and HBO Max from Amazon’s Prime Video Channels platform.

WarnerMedia CEO Jason Kilar said that after 2021, when Warner Bros. will wrap its same-day HBO Max streaming releases for new films, there will be “total content parity” between ad-free and ad-supported HBO Max.

In 2022, Warner Bros. will have a slate of films with exclusive 45-day theatrical windows before hitting HBO Max. The studio will also produce films that will go directly to HBO Max on day one of release.