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Set to invest billions, AT&T projects 50m HBO Max users by 2025

By Andrew Blustein, Reporter

October 28, 2019 | 3 min read

AT&T has high hopes for its coming Netflix competitor, HBO Max.

Part of the $2bn HBO Max investment includes a coming Anthony Bourdain documentary

Part of the $2bn HBO Max investment includes a coming Anthony Bourdain documentary / HBO Max

During AT&T’s third quarter earning’s call Monday (28 October), chief executive officer Randall Stephenson said the company expects HBO Max to reach 50 million US subscribers by 2025.

Stephenson added that AT&T plans to invest around $2bn over the next two years in HBO Max, a service he claims will be different from other streaming foes.

“This is not Netflix. This is not Disney. This is HBO Max,” said Stephenson. “We feel very comfortable at these investment levels that we can do something very, very significant in the market and drive some significant subscriber gains. This is going to be a meaningful business to us over the next four or five years.”

HBO Max will debut next spring, and WarnerMedia will hold an investor day Tuesday showing off the streaming service.

AT&T posted total revenue of $44.6bn for the quarter, down around 2.5% from the prior year and below analyst expectations by $490m.

DirecTV again posted loses. The AT&T-owned satellite TV company lost over 1.1 million customers in the quarter.

In early September, activist investor Elliott Management criticized AT&T’s leadership and moves in media. Speaking to investors Monday, the telecom giant detailed a specific go-forward plan.

Stephenson laid out AT&T’s three-year financial plan, which centers around broadband, WarnerMedia and advertising growth. The company’s ultimate TV goal is to get down to two products: satellite and streaming, which “will be premised” on the HBO Max platform.

Elliott Management partner Jesse Cohn and associate portfolio manager Marc Steinberg commended AT&T’s plan.

“We commend AT&T for the positive steps announced today, which will create substantial and enduring shareholder value at one of America’s greatest companies,” Cohn and Steinberg wrote in a statement. “We have worked closely and collaboratively with management and the board on the initiatives announced today. It is clear to us that AT&T is committed to and accountable for creating shareholder value over the near- and long-term.”

Similar to how Disney plans to use its entire portfolio to market its upcoming streaming service, AT&T will try to use everything at its disposal to push the HBO Max roll out.

AT&T will make HBO Max free for the existing 10 million HBO and HBO Now customers who pay for the service through one of AT&T’s subsidiaries.

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