According to reports, WarnerMedia CEO Jason Kilar said in an interview this week that the company’s streaming video service HBO Max breakthrough in 2021, a leader in the streaming video industry alongside Disney and Netflix. However, in terms of paying subscribers, HBO Max still lags behind.
It’s going to be a troika, so to speak, Killar said. If you look at the number of paying subscribers in the U.S. market, after the top three, the number of paying subscribers has dropped significantly, WarnerMedia reported last week. HBO Max and HBO had 74 million paying subscribers by the end of 2021, up from 61 million in 2020. Those who pay for the HBO TV channel can watch the streaming video service for free.
Despite Killar’s enthusiasm, HBO Max still lags far behind Netflix and Disney. In early October, the two companies reported 214 million and 118 million paying subscribers, respectively. And there’s a flaw in WarnerMedia ‘s numbers: 74 million paying subscribers include those who pay to subscribe to HBO’s cable channel. The company has been encouraging these users to sign up and use HBO Max for free. Killar said the “vast majority” of those 74 million paying subscribers use HBO Max, but declined to give specifics.
WarnerMedia launched HBO Max in 2020 in an attempt to compete with Netflix and establish itself in the digital entertainment industry. AT&T, the parent company of WarnerMedia, hired video industry veteran Kirar, who co-founded streaming video pioneer Hulu, to expand the business.
However, while WarnerMedia holds the richest content library in the entertainment industry, including Warner Bros. Studios, the HBO network, and a slew of cable channels including CNN, HBO Max has had a slow start. For months, the service was hampered by technical glitches, ignorance of users, and stalled talks with Roku. The latter has prevented users of Roku set-top boxes from watching HBO Max.
Over the past year, WarnerMedia has added 13 million paying subscribers. That’s thanks to a slew of programming content, including new seasons of Succession and Uneasy. The company also has a bold strategy to release all Warner Bros. movies through HBO Max without adding any other fees.
Disney’s Disney+ had 118 million paying subscribers in October, up 44 million from a year earlier and growing much faster than HBO Max. However, Disney’s service costs are lower than HBO Max, and its expansion into the Indian market has also helped Disney. Paid users in the Indian market pay less than $1 per month.
Killar said WarnerMedia will spend more than $18 billion on content this year to keep pace with rivals. Statistics show that the eight largest media groups in the United States plan to spend at least $115 billion this year to purchase new movies and TV shows to enrich the content library of their video services.
Disney and Netflix are expected to spend more than $33 billion and $17 billion on this, respectively, this year. “What you’re seeing is that companies in this position are investing heavily, and we’re one of those companies,” Killar said.
HBO Max has been unable to launch the service in the UK due to a licensing deal with Sky UK. Regarding when HBO Max will come to the UK market, Killar said: Bringing HBO Max to the UK is our expectation. I want to be honest about that, but we do have a very important contract in the UK.
WarnerMedia will change ownership for the second time in three years. Last May, AT&T agreed to spin off WarnerMedia and merge it with rival Discovery Channel. AT&T bought WarnerMedia three years ago, and the sale marks AT&T’s retreat from Hollywood.
The deal is expected to close this year and is awaiting regulatory approval. Kilar was largely unaware of AT&T’s deal to spin off WarnerMedia. Industry watchers expect him to leave the company after the deal closes. Asked if he was leaving, Kirar’s answer was vague: “I get asked that question a lot. I haven’t announced my plans yet, but it will be later this year.”