AT&T said that the number of activated subscriptions to the streaming service HBO Max doubled in the fourth quarter to 17.2 million compared to the third quarter, partly due to the release of Wonder Woman 1984.
The number of general local subscribers on regular HBO and HBO Max reached 41.5 million, which according to the company was two years before the initial forecasts and compared to 34.6 million in the 2019 quarter. Prior to HBO Max’s debut in May 2020, AT&T said its five-year goal was to reach 50 million U.S. subscribers, and between 75 million and 90 million worldwide.
While HBO Max costs $ 15 per month for direct subscribers, existing HBO subscribers are entitled to activate their subscriptions at no extra cost. AT&T struggled early on to promote the conversions, especially with competitors launching much cheaper streaming alternatives. The company recently decided to significantly increase the streaming service (to the dismay of many people in Hollywood) by placing the entire Warner Bros. movie record at 20 HBO Max while appearing in theaters. WW1984 followed that release pattern on Christmas Day. No data on its performance was shared in the revenue release.
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HBO Max, which competes with other emerging services such as Disney +, Apple TV + and Peacock, benefited in the fourth quarter from a distribution deal with Roku, which was reached in December. In November, a similar distribution deal that changed Amazon was concluded with Amazon, which eventually opened access to the two dominant U.S. streaming providers.
The current news highlighted quarterly results that exceeded Wall Street’s forecasts, although declining from the previous year as the telecommunications and media giant was still able to handle the effects of Covid-19.
Earnings per share were 75 cents for the quarter ended December 31, compared to 89 cents in the same period in 2019, with revenue of $ 45.7 billion from $ 46.8 billion. Analysts expected revenue of 73 cents and revenue of $ 44.6 billion.
The Mobility division boosted quarterly performance, with equipment revenue in that unit up 28% to $ 6.1 billion. AT&T said the gains are due to smartphone sales, a mix of post-paid smartphones and higher sales of post-paid data devices. The implementation of 5G services as well as new Apple iPhones has helped increase the quarterly results.
Revenue at WarnerMedia dropped nearly 10% from a year ago to $ 8.6 billion. AT&T estimates that TV and film revenues were $ 1.6 billion in the quarter. Revenue at Warner Bros. alone is down 21%.
Pay-TV subscriptions continued to decline, with 617,000 video customers losing in the quarter, although broadband growth offset the decline, as it did in the past year. AT&T TV Now, the Internet-delivered TV bundle launched in 2016 as DirecTV Now, has closed and AT&T is in talks to sell a controlling stake in DirecTV, which it acquired in 2015.
Video revenue fell 11% to $ 7.2 billion, blaming declining premiums and
OTT subscribers, partially offset by higher premium TV revenue per customer and a flurry of election ads. Aside from the challenge of working during Covid-19, the company said the quarterly revenue figure includes the estimated billing credits for 2020 to be provided to subscribers for the delivery of local sports network programming.