The chief executive of WarnerMedia said the company’s HBO Max streaming service “broke through” in 2021 and earned a seat with Disney and Netflix as leaders in the streaming war – albeit lagging behind tens of millions of subscribers.
“It’s fair to say it’s becoming a three-horse race leading the pack,” Jason Kilar told the FT. “Regarding storytelling. . . and when you look at the number of subscribers in the United States, things drop a bit after the first three courses.
The company announced last week that it had reached 74 million HBO Max and HBO subscribers by the end of 2021, up from 61 million in 2020. People who pay for the HBO TV channel have free access to the streaming service.
Despite Kilar’s enthusiasm, HBO Max remains far behind Netflix and Disney, which had 214 million and 118 million subscribers, respectively, at the start of October.
There is also a caveat to Warner’s numbers: the 74m includes people who pay for HBO’s cable channel. The company encouraged these customers to sign up for HBO Max, which they get for free. Kilar said the “vast majority” of the 74 million used HBO Max, but declined to provide details.
Warner in 2020 launched HBO Max, tossing his hat in the ring as mainstream media groups seek to compete with Netflix and secure their place in a world of digital entertainment. AT&T, the telecommunications group that owns WarnerMedia, has hired Kilar, a streaming veteran who previously co-founded Hulu, to develop HBO Max.
HBO Max got off to a slow start, despite having one of the most sought-after portfolios in entertainment, including Warner Bros. film and television studios, the HBO network, and a portfolio of cable channels including CNN.
The service was marred for several months by technical glitches, consumer confusion and a stalemate in negotiations that prevented people from watching HBO Max on Roku’s popular streaming devices.
The company added 13 million subscribers in the past year, helped by a list of programs including new seasons of Succession and Unsafe, as well as a bold strategy to stream all Warner Bros. movies on HBO Max at no additional cost.
The 118 million Disney Plus in October increased by 44 million subscribers from the previous year, a much faster rate of growth. However, Disney’s service costs considerably less than HBO Max and has been spurred by a surge in India, where subscribers pay less than a dollar a month.
Kilar has said Warner will invest more than $ 18 billion in content this year as it seeks to keep pace with its rivals. America’s top eight media groups plan to spend at least $ 115 billion on new movies and TV shows this year, the FT calculated, as they look to beef up their streaming services.
Disney and Netflix are expected to spend over $ 33 billion and $ 17 billion each in 2022. “What you are seeing is that the people in these positions are investing aggressively,” Kilar said. “We are one of those companies.
HBO Max was unable to launch in the UK due to a licensing deal with Sky. When asked when the service would debut in the UK, Kilar said, “It is our ambition to bring HBO Max to the UK. I try not to be suspicious about this, but we have a contract which is obviously important to us.
WarnerMedia is about to make its second change of ownership in three years. AT&T agreed in May to separate and combine WarnerMedia with rival Discovery, just three years after acquiring the company, a humiliating retirement from Hollywood for the telecommunications company.
This transaction is expected to close this year, pending regulatory approval. Kilar has been largely kept in the dark about AT & T’s negotiations to divest itself of WarnerMedia. Observers expect him to leave the company when the deal closes.
When asked if he was planning on going out, Kilar objected, “I get this question a lot. I haven’t shared my plans but will do so later this year.