Take HBO Max’s Subscriber Count With a Grain of Salt

AT&T (NYSE:T) is right to be proud of the success it has achieved with its HBO Max streaming subscription in so short a time, but it’s still the legacy HBO service that’s doing most of the heavy lifting. 

Of the 41 million monthly U.S. subscribers AT&T touted for the new service at the end of the fourth quarter, there were only 17 million activations for HBO Max — the people who actually downloaded and used the mobile app or otherwise paid for it. The rest are those who were ported in through HBO or had access through other means.

Yes, AT&T doubled the number of HBO Max subscribers in just one quarter, but so far, the streaming service is no Disney+.

Wonder Woman running past Capitol

Wonder Woman did wonders for HBO Max. Image source: Warner Bros.

On the back of Diana Prince

HBO Max launched last May, but it stumbled out of the gate despite the increased demand for in-home entertainment during the pandemic. Only with the debut of Wonder Woman 1984 on Christmas Day (when it was also released into movie theaters) did the service gain the traction it was seeking.

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The most recent data from Nielsen shows Wonder Woman delivered 2.3 billion minutes of view time in the U.S., 35% more than Soul, the animated feature film Walt Disney released on the same day.

AT&T CEO John Stankey said in the media company’s fourth-quarter earnings statement, “[T]he release of Wonder Woman 1984 helped drive our domestic HBO Max and HBO subscribers to more than 41 million, a full two years faster than our initial forecast.”

That makes it sound as if HBO Max is on the same kind of growth trajectory that Disney+ is on following its launch in Nov. 2019 as Disney recently boasted the service reached its subscriber goals five years ahead of schedule. But that’s not really the case.

A change in direction

AT&T is transitioning from the legacy HBO platform to its HBO Max streaming service. A year ago, there were 30.6 million HBO subscribers (and obviously no HBO Max subscribers). Today, there are fewer than four million, and most of those consist of accounts that aren’t eligible for HBO Max such as hotels.

The vast bulk of subscribers were transferred to HBO Max. In November, for example, AT&T gave Amazon access to the streaming service but removed HBO, allowing customers who signed up and paid for the original channel to access it through the HBO Max app.

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That’s also why the Warner Bros. division announced its entire 2021 movie lineup would have a day-and-date release, meaning the films would be available on the streaming service at the same time they debut in theaters. It used to be very rare for films to become available to other outlets at the same time as their release in theaters, but studios see streaming as the medium of the future, and they’re trying to juice the subscriber rolls of their respective services.

Disney also said the bulk of its future TV and movie content would be reserved for Disney+. Much of this ongoing trend has been driven by Comcast as the company’s Trolls World Tour release forever changed movies and streaming.

A keeper to come

AT&T seems to have a strong hand with HBO Max, and the numbers the company has posted indicate it will be a competitive service, likely one of the handful that consumers ultimately keep. Yet the headline number the company is celebrating is not quite as groundbreaking as it seems at first glance, and HBO Max has received nowhere near the sort of reception Disney+ enjoyed.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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View more information: https://www.fool.com/investing/2021/02/17/take-hbo-max-subscriber-count-with-a-grain-of-salt/

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