As far as streaming TV goes, AT&T is off to a good year.
This week, the telecom said its premium movie network HBO and companion streaming service HBO Max had jointly reached 41.5 million subscribers by the end of the previous quarter, an increase of 3.5 million subscribers between the two offerings.
The streaming-only HBO Max contains original programming and licensed movies from HBO with additional TV shows and movies from the content library of its parent company WarnerMedia, which is a subsidiary of AT&T.
HBO Max costs $15 a month, but the service is included with most cable and satellite subscriptions to HBO. A limited, streaming channel with just HBO content is also offered to cable and satellite platforms with no existing agreement to connect the premium movie network to HBO Max.
The gap between customers who have access to HBO Max and those who don’t is starting to close, particularly after the two biggest streaming hardware makers — Roku and Amazon — reached separate deals to offer HBO Max access to its users.
Other companies, including Apple, Google, Comcast, Cox and Charter/Spectrum also have agreements to connect HBO subscribers to HBO Max.
HBO Max is a big part of AT&T’s long-term content strategy: The company wants it to be a one-stop shop for WarnerMedia content and has ambitious plans to take it global over the next few years. Starting sometime this year, a cheaper version of HBO Max with a limited selection of curated content is expected to launch as well. The cost of that version will be subsidized by ads, with WarnerMedia pushing users to subscribe to the full version of HBO Max if they have a hunger for more.
One thing attracting customers to HBO Max is AT&T’s decision late last year to debut all new films on the streaming service at the same time they appear in theaters. The movies are offered for 30 days at no extra cost until they disappear ahead of their home video releases.
The strategy was designed to offset a decline in theater attendance during the ongoing coronavirus health pandemic, executives said at the time. The theatrical release strategy is not expected to be a long-term one, though executives appear open to the idea if market conditions warrant it.
Some believe that might be the case, pointing to an increasing comfort among consumers to rent theatrical releases from the comfort of their living rooms. Several other studios, including Walt Disney Studios Comcast’s Universal Pictures, have experimented over the last year with releasing theatrical films on digital platforms for premium prices, with mixed success.
But AT&T executives appear more cautious, saying a spike in streaming subscriptions isn’t expected with every future quarterly release.
“We’re not going to see the kind of subscriber spikes that maybe we saw in December and early January, every time we put a movie out,” John Stankey, AT&T’s chief executive, said during a recent conference call. “We do have the opportunity to build marketing and promotional opportunities around the bigger releases that have broader buzz and broader application across the customer base.”