AT&T may no longer want HBO Max, but the streaming platform is gaining traction with customers.
HBO and HBO Max, home to cross-genre franchises like Game of Thrones and The Sopranos and Hollywood blockbusters like Wonder Woman 1984, have acquired 10.7 million customers in just over a year, including 2.8 Millions were added to the three months ended in June, AT&T reported on Thursday. Those numbers include both HBO Max and the HBO TV channel.
The company has 67.5 million subscribers to HBO and HBO Max, including 47 million in the US. AT&T, which has closed a deal to sell its media businesses, expects HBO and HBO Max to have between 70 million and 73 million customers by the end of the year, beating previous forecasts.
Netflix, the most popular streaming service, has 209 million subscribers, around 66 million of them in the US. It gained customers in the second quarter, but growth slowed significantly and it lost 430,000 subscribers in the US and Canada, a sign that the streamer’s long-standing dominance is cracking.
In an interview about the broader streaming industry, Jason Kilar, CEO of AT & T’s media arm WarnerMedia, said, “The only thing I can promise you is change. There is no doubt that change is coming and that is appropriate because we live in a dynamic time. “
WarnerMedia, which includes CNN, Warner Bros. film and television studios, and Turner cable networks, will soon be owned by Discovery Inc. Facebook and Google. The deal, which is expected to close in mid-next year, will create the second largest media company in the United States behind The Walt Disney Company and ahead of Netflix and NBCUniversal.
Mr Kilar, who only learned of the acquisition weeks prior to the announcement, may be unemployed once the deal is complete.
The two companies are not allowed to work together until the merger has been approved by state regulators, including entering into employment contracts. However, such deals often include tacit management agreements. Mr Kilar said he met with David Zaslav, the head of Discovery, but did not bring up the subject of his employment.
“David and I have known each other for a long time,” he said, “and I think it’s fair to say we both have a lot of respect.”
Mr Kilar, who only took over the company 15 months ago, said he had no plans to step down.
“There will be a point where I will lift my head up next year to think about this topic,” he continued. “But I certainly don’t plan to do it before 2022.”
Hulu’s founding boss Mr. Kilar is considered a bit of an iconoclast in Hollywood. In 2011, he expanded the industry with a now famous manifesto on the future of entertainment that came across to many as a glowing criticism of Hulu’s corporate property.
The contribution panned traditional television because there were way too many commercials. Mr Kilar also blew up cables, predicting viewers would eventually drop expensive packages.
After joining WarnerMedia, Mr. Kilar quickly switched leadership roles and cut costs to streamline the business.
Then he angered Hollywood (again) by breaking with tradition and releasing the entire lineup of Warner Bros. films in 2021 on HBO Max on the same day they were due to hit theaters. The move would have cost some of Hollywood’s biggest back-end profits – the commission that top producers and stars earn based on box office revenue – but the company quickly worked out deals to make sure they got paid.
Unlike Netflix, Disney + and HBO Max and other streaming newbies have old agreements with cable distributors and Hollywood studios that prevent a broader approach to instantly making movies and TV shows online.
For Mr. Kilar, the move wasn’t about pissing Hollywood off, but rather part of a larger strategy to drive HBO Max.
It seems to have worked. The release of spectacles like “Godzilla vs. Kong” on HBO Max, which were developed for the big screen, helped increase the customer’s role of the service.
Mr. Kilar intends to maintain this strategy through 2022. Warner Bros. will release 10 films exclusively for the streaming platform. And big budget films like “The Batman,” a reinterpretation of the cartoon character starring Robert Pattinson, will have a relatively short 45-day window in theaters before they appear on HBO Max, according to Kilar.
“This is very, very different from the world in 2019,” he said. “Ultimately, I think that change can be very, very good not only for the customers, but also for the people we work with, as long as you think about it.”