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by Georg Szalai , Etan Vessing | HollywoodReporter.Com

Troy Warren #business-all

Telecom giant AT&T, led by CEO John Stankey, reports first-quarter results, including WarnerMedia posting higher subscription and advertising revenues as the entertainment arm recovers from pandemic-era impacts.

WarnerMedia’s HBO Max streaming service, backed by streaming of tentpole movies like Godzilla vs. Kong, and HBO ended March with 44.2 million subscribers — having gained 2.7 million customers sequentially — and with a combined 63.9 million worldwide subscribers.

That is up from 41.5 million total HBO Max and HBO domestic subscribers as of the end of 2020, with direct-to-consumer subscription revenues having risen 35.3 percent year-over-year. A year-ago, WarnerMedia had 33.1 million HBO and HBO Max subscribers and 53.8 million global subscribers.

AT&T did not break out the specific number of subscribers for its HBO Max streaming platform as it no longer reports “activations,” and instead indicates combined HBO Max and HBO subscriber figures. The telecom giant, led by CEO John Stankey, disclosed the latest figures in its first-quarter earnings report on Thursday, with overall AT&T revenues rising 2.7 percent to $43.9 billion on momentum from its core wireless phone business.

“We had another strong quarter of postpaid phone net adds, higher gross adds, lower churn and good growth in Mobility EBITDA. We also continue to increase penetration in markets where we offer fiber broadband and we’re moving quickly to deploy more fiber. HBO Max continued to deliver strong subscriber and revenue growth in advance of our international and AVOD launches planned for June,” Stankey said in a statement ahead of a morning analyst call.

For WarnerMedia, first quarter revenues rose 9.8 percent to $8.5 billion, driven by higher subscription, advertising and content revenues as the media conglomerate continues to recover from the 2020 impacts of the COVID-19 crisis. Subscription revenues were $3.8 billion, up 12.6 percent year-over-year, as the subscriber base for HBO Max and HBO grew.

Advertising revenues increased 18.5 percent to $1.8 billion after the NCAA Division I Men’s Basketball Championship Tournament returned in 2021 to boost cable network fortunes. And content revenues increased 3.5 percent to $3.4 billion on higher sales to HBO Max for theatrical product and higher basic networks licensing. That was partly offset by lower TV product licensing from prior-year licensing to HBO Max.

During an investor day in mid-March, AT&T said it expects to reach 120 million to 150 million HBO Max and HBO subscribers worldwide by the end of 2025, well above its October 2019 forecast of 75 million to 90 million. It expects to end 2021 with 67 million to 70 million subscribers worldwide, up from about 61 million at the end of 2020.

The company back then also said that an advertising-supported version of the streamer would launch in the U.S. in June and that HBO Max would become available in 60 markets outside the United States this year.

Consumer interest in the service seemed to start picking up heading in the final months of 2020 when it struck a distribution deal with Amazon and featured a lineup that included buzzy original series The Flight Attendant and HBO limited series The Undoing. WarnerMedia also signaled the importance of HBO Max to its long-term strategy when it unveiled a hybrid release strategy for Wonder Woman 1984, premiering it in theaters where they were open and on HBO Max in the U.S. on Christmas Day. In a step seen as controversial, the company followed that up with the Dec. 3 announcement that its entire 2021 film slate would follow the same release plan.


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