At the end of 2020, WarnerMedia decided that it was going to break the industry in two by announcing plans to release all of Warner Bros.’ 2021 film slate in theaters and on HBO Max simultaneously. The strategy was analyzed from every angle, with some saying it was the death of theaters and others saying it was the way of the future. Now, after three months, WarnerMedia is releasing HBO Max subscriber numbers that give us our first hint at whether or not this hybrid release idea is actually working out. And the short answer to that question is…well, it’s complicated.
In a recent earnings call from WarnerMedia (via CNBC), it was revealed that the studio has added 2.7 million subscribers to its combined subscriber count for HBO and HBO Max from January until the end of March. That raises the combined number of subs to both services to 44.2 million. Unfortunately, it’s unclear how many of those subscribers are HBO-only, as there is still a large number of folks that subscribe to the premium network and don’t actually use HBO Max. Alas, it’s the 2.7 million number that is being analyzed.
You see, this subscriber number is the first time we’ve seen any official, concrete results in the year-long experiment of releasing new films on HBO Max day-and-date with theaters. In that time, we have seen films such as “The Little Things,” “Judas and the Black Messiah,” and “Godzilla vs. Kong” follow that plan. But again, that 2.7 million isn’t broken down by what made people subscribe. It just tells us how many people did over three months.
Also, we have to remember, over that time, HBO Max continued to debut original content, including its biggest project, “Zack Snyder’s Justice League,” which is the culmination of 4+ years of hype and anticipation.
So, what does the new subscriber count tell us?
Well, for one, positive growth is encouraging, no matter what. So, in that sense, good job WarnerMedia. But really, that’s the only truly good news. You see, when you take into account what the competition is doing during the same time, the 2.7 million subscribers seems awfully low.
Disney+, over the same period, added a massive 21.2 million subscribers to its service, thanks to a similar plan of new superhero content (“WandaVision”), a strong library, and first-run films (“Soul,” “Raya and the Last Dragon”). But, to be fair, Disney+ did have a bit of a headstart, as it launched months before HBO Max. Then you have Netflix, which really shocked investors with low subscriber growth of only 450,000. However, when you consider the service has more than 200 million subscribers worldwide, that makes one period of slow growth not a massive worry. (Plus, Netflix is taking controversial measures to try to see a spike in growth.)
The 2.7 million sub growth for HBO/HBO Max is a bit worrisome for one major reason — WarnerMedia risked upsetting theater chains, losing creative partners, and losing potentially billions in box office revenue (though “Godzilla vs. Kong” is doing pretty well in theaters, to be fair) to release films on the streaming service at the same time as cinemas. This was all to help bolster the library of HBO Max and drive subscribers to the service. So, if this is only going to grow incrementally and not at a rate that keeps it competitive with Disney+ and/or Netflix, then was it all worth it? To be fair, only judging by one quarter’s results is not nearly enough information to make an educated conclusion. But at this point, you have to be moderately concerned that the projected subscriber count of 120 million to 150 million HBO/HBO Max subscribers by 2025 is a bit too optimistic. And each month, the service falls further behind Disney.
So, the first subscriber growth numbers do draw an early sketch of what the overall result might be, but there are still 9 more months to look at. For WarnerMedia, you have to hope the summer months will yield better results, as people begin to recover from the pandemic more and the service expands globally in even more territories. But if this first quarter is a sign of what’s to come, WarnerMedia might have to rethink its strategy if it wants to really be considered a true competitor to Disney and Netflix.