HBO Max Will Reach 50M U.S. Subscribers In First 5 Years, AT&T Projects

HBO Max will reach 50 million U.S. subscribers in its first five years after launching next spring, according to a forecast issued Monday by AT&T CEO Randall Stephenson on the company’s quarterly earnings call.

The outlook came during a big-picture discussion with analysts of the company’s asset mix, financial condition and strategic outlook. The company issued a three-year capital allocation plan along with a mixed set of third-quarter earnings results on the eve of WarnerMedia’s investor day on the Warner Bros. lot, where it will reveal fresh details about HBO Max.

“This is a product that’s going to be very different from any other product you’ve seen in the market so far,” Stephenson said. “This is not Netflix, this is not Disney. This is HBO Max. It’s going to have a very unique position in the marketplace.”

The global extent of HBO Max hasn’t been detailed. That footprint as well as key elements such as pricing and financial models will be laid out Tuesday. Beyond the target of 50 million subscribers and forecasts for a hit to earnings of 10 cents a share over the next three years, AT&T didn’t get too granular on HBO Max details. Its overall outlook suggested an investment of $1.5 billion to $2 billion in 2019, with $1 billion a year in subsequent years. Those figures must be reconciled with the additional billions in programming spending across HBO, Warner Bros. and the former Turner networks.

HBO Max is entering an increasingly crowded streaming arena. Apple and Disney are launching subscription services in the coming weeks. NBCUniversal’s ad-supported service, Peacock, will launch next April. Disney, at its investor day last April, said it aims to acquire 60 million to 90 million global subscribers by 2024. Netflix leads the field with about 160 million global subscribers.

Stephenson said HBO Max will become the “workhorse” of the company’s pay-TV offerings in the years to come, along with legacy distribution platforms like DirecTV. The wireless dimension of AT&T, he argued, confers key advantages on AT&T.

“Our customer relationships are something any streaming company would want,” Stephenson said. “I wouldn’t trade places with anyone.”

Stephenson promised analysts on the earnings call that they would receive a “full dose” of WarnerMedia entertainment chairman Bob Greenblatt at Tuesday’s investor day. “He’s an impressive guy,” Stephenson added.