December 5, 2023

Ezra Miller, Ben Affleck and Gal Gadot star in the Justice League.

Source: Warner Bros.

Zack Snyder’s cut of Justice League may have been a fan hit, but it did little to set the needle in HBO Max subscriptions.

On Thursday, AT&T, which owns WarnerMedia, announced that its streaming service HBO Max and premium cable offering HBO added 2.7 million domestic subscribers in the first quarter.

Just days before the highly anticipated release of the Snyder Cut on March 18, WarnerMedia raised its subscriber expectations and forecast between 120 and 150 million global users for HBO Max and HBO by the end of 2025.

In total, HBO Max and HBO have 44.2 million domestic subscribers, compared to 41.5 million at the end of the fourth quarter. Globally, the services have fewer than 64 million subscribers, but the company is expected to continue expanding its product this year.

“HBO Max continues to deliver strong subscriber earnings driven by the success of our day and date theater strategy,” said AT&T CEO John Stankey during an earnings call Thursday. “In the US, we’ve added more than 11 million domestic HBO Max and HBO subscribers in the past 12 months.”

By comparison, Netflix, which has been growing steadily for years, added around 450,000 subscribers in the US and Canada and nearly 4 million subscribers worldwide over the same period. The company has around 207.6 million subscribers worldwide.

Disney won’t announce its subscriber growth for the three month period between January and March through May, but 21.2 million new accounts have been added worldwide in the past three months. In total, Disney + has exceeded 100 million subscribers worldwide.

HBO Max had several high profile releases in the first quarter, including “Tom & Jerry” and “Godzilla vs. Kong,” which were part of WarnerMedia’s strategy to bring content to theaters and expand their streaming service.

The monster movie “Godzilla vs. Kong” has dominated the domestic box office, setting records for films released during the pandemic. It also drew the largest audience on HBO Max, the company said. The film arrived on HBO Max on March 31, the last day of the quarter.

“The same-day release of movies in theaters and on HBO Max has been a success,” said Pascal Desroches, AT&T CFO. “It has and has allowed theaters to have a steady flow of content in a pandemic-hit environment a great catalyst for subscriber growth at HBO
Max. “

The Snyder Cut, which didn’t follow this strategy and launched exclusively for HBO Max, should also drive subscriber growth. Especially after the company spent an estimated $ 30 million to $ 70 million on re-recording and post-production.

WarnerMedia declined to comment on the financial terms of the project.

“It’s a marathon, but I didn’t think a lot of people would sign up for $ 15 a month to watch a movie,” said Michael Pachter, an analyst at Wedbush. “As long as they grow, I think they are on the right track.”

“The better question is about the wisdom of daytime movie releases like ‘Godzilla vs. Kong’,” he added. “With just 2.7 million new subscribers, it’s hard to justify killing a large chunk of theater revenue by helping HBO Max, and the problem is getting worse as the economy reopens and more people get vaccinated.”

[Programming note: CNBC’s TechCheck will host entertainment leaders on a 7 p.m. ET livestream to discuss the future of the industry.]