AT&T Earnings Q1 Examination: HBO Max Grows Bit by bit But Steadily

HBO Max Subscribers AT&T

How is HBO Max doing in the streaming wars? Dogukan Keskinkilic/Anadolu Company via Getty Graphic

HBO Max subscription progress came in perfectly below expectations in AT&T’s Q1 earnings report, even though it is not precisely a doom-and-gloom situation for the business. As usually, the bigger context paints a clearer photograph.

In accordance to AT&T, HBO Max and HBO merged for 44.2 million U.S. customers by the stop of March, up 2.7 million paid out customers from the 41.5 million the two totaled at the finish of last 12 months. The corporation declined to present activation quantities, or these who are suitable to change current HBO subscriptions into HBO Max activations. Nevertheless, the majority of these Q1 adds were being retail, which suggests straight by HBO Max and not an present HBO subscription. HBO’s retail base grew 41%.

Whilst the release of Zack Snyder’s Justice League and Godzilla vs. Kong was expected to attract extra new subscribers, HBO Max is nonetheless on pace for a lot more than 11 million new prospects in 2021. The streamer may perhaps not be building the similar form of gaudy advancement numbers as Disney+, but AT&T discovered in its earnings that regular profits for each user (ARPU) for domestic HBO Max and HBO prospects in Q1 was $11.72 for every thirty day period. For comparison, Disney+ ARPU stands at $4.03 as of the stop of 2020 whilst Netflix’s U.S. and Canada ARPU was $14.25.

“I would assume AT&T’s [stock] movement on Thursday and beyond to be considerably less about handheld devices or dividend payments and more about HBO Max’s subscriber expansion.” –David Keller

“Even nevertheless AT&T incorporates varied companies, the true query investors will be making an attempt to reply is the development likely for HBO Max,” David Keller, Chief Sector Strategist at, explained to Observer. “Given the way Netflix reacted to underwhelming subs, I would anticipate AT&T’s movement on Thursday and outside of to be significantly less about handheld products or dividend payments and far more about HBO Max’s subscriber development. AT&T a short while ago bounced off its 50-day relocating ordinary and a split higher than resistance about $31.50 would recommend additional upside potential.”

AT&T CEO John Stankey explained that HBO Max continued to supply potent subscriber and income progress in progress of the platform’s worldwide and AVOD launches in June. On paper, a reduced priced tier really should increase Max’s probable arrive at. Domestically, the SVOD industry is somewhat saturated, so rolling out in overseas areas should goose quarterly subscriber figures, assuming the product is nicely acquired.

As Netflix alone observed in its Q1 earnings report, uncooked subscriber quantities are not the only standards with which to choose a streaming service. 1 have to also glimpse at the economics included. AT&T defeat Wall Road economic anticipations when it described $43.9 billion in income and modified earnings per share of 86 cents. WarnerMedia documented that Q1 2021 revenue was $8.5 billion, up 9.8% vs . Q1 2020 (however that also reflects partial recovery from COVID-19). Importantly, immediate-to-customer subscription revenue this quarter was up from $1.3 billion last yr to $1.8 billion, a 35% climb yr-about-yr.

Based on AT&T’s earnings report, even though, we can estimate that HBO Max offers around 10 million U.S. retail subs even though HBO properties about 30 million wholesale subs. The overall variety of subscribers is expanding. But a considerably additional illuminating and optimistic metric would be to see an expanding amount of wholesale subscribers migrating to HBO Max. The truth that AT&T declined to update activations suggests that conversion fee of existing HBO subs into Max subs may well be mounting. But it’s significantly from a given.

“HBO Max has obtained traction this quarter with a constant enhance in its subscriber base,” Anthony Denier, CEO of Webull, a fee-absolutely free investing system, informed Observer. “WarnerMedia’s CEO predicted HBO Max will see considerable development this 12 months just after a rollout to 60 marketplaces in Latin The us and Europe. By the conclusion of 2021, AT&T expects to see around the world development of amongst 10% and 15%.”

As of January 27, HBO Max experienced 17.1 million activations. Total, the service’s Q1 advancement in conditions of uncooked paid out additions is nicely down below anticipations. But the context surrounding these figures does reveal a service making incremental progress and potent ARPU.

AT&T’s Q1 Earnings Raise More Questions Than Answers for HBO Max

Related Articles

Back to top button