HBO Max’s numbers are up, but still far short of Disney+

AT&T CEO John Stankey (tries to) justify HBO Max’s high price and the decision to release movies on streaming and in theaters simultaneously.

Just last week, Warner Bros. announced that it would be releasing every movie it had planned for 2021 straight to HBO Max at the same time it debuted them in theaters, angering many stakeholders who were offended they weren’t consulted about the deal and afraid this would herald the end of the theatrical experience.

This week,  AT&T CEO John Stankey (AT&T owns WarnerMedia, which operates Warner Bros.) appeared at the UBS Global TMT Virtual Conference where he addressed these and other concerns. He described the new movie plan as a “win-win-win,” since it provides movies to theaters during the pandemic, gives moviegoers the option to stay home if they’d rather not risk the plague-scape, and hopefully draws more subscribers to HBO Max. “Snowplowing all theatrical content into late-2021 and early-2022 probably isn’t going to help anybody,” he said.

When it was announced, Warner Bros. said that this new strategy would only last for one year, to ride out the after-effects of the coronavirus. But a lot of people think they’ll keep doing things this way even beyond that, and it sounds like that’s where Stankey wants the company to go. “Customers have a tremendous amount of choice as to how they choose to engage with content,” he said. “If we just simply sit here and say, ‘This is about whether or not people go to movie theaters,’ I think we’re missing the broader point. Today, even before WarnerMedia made this decision, customers could go watch great, two-hour content on a variety of competitive services … some of them very significant releases. Customers are going to drive what happens in a market, ultimately.”

In the future, Stankey predicts that “having choice” will be the new normal. “We’re not putting one over the other,” he said, talking about theatrical distribution vs streaming. “This to me seems like a very friendly and innovative approach.”

As for HBO Max, Stankey announced that the service now has 12.6 million “activated” subscribers, meaning subscribers who actually use the service, as opposed to the millions who have access to it but don’t know that because they get it free with some other service. That’s up from 8.6 million activated users at the end of the third quarter. Stankey thinks they’re on target to hit their goal of 50 million U.S. subscribers and 75 million to 90 million globally by 2025. “We’re actually ahead of plan,” he said. Engagement is also up around 36% over the past month, which Stankey credits to shows like The Undoing on HBO and The Flight Attendant on HBO Max.

At the same time, it’s hard not to look at rival services like Disney+, which has nearly 74 million subscribers, and feel like HBO max isn’t cutting the mustard. True, Disney+ came out around half a year before HBO Max, but that’s a big gap that needs filling.

Could be the price point. While Disney+ costs a lean $7 per month at the base level, HBO Max is $15, which makes it among the most expensive of streaming services. Stankey justified the price by saying it helps with average revenue per user, a key metric.

I’m no statistician, but if you multiple the number of subscribers by the price, Disney is still way ahead in terms of revenue for month. I hope your greater ARPU helps comfort you, Stankey.

We’ll see where the chips fall next year as the streaming war continues…

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h/t Deadline