HBO and HBO Max have a combined 45.2 million domestic subscribers as WarnerMedia’s third quarter revenues rose to US$8.4 billion, parent company AT&T reported Thursday (October 21).
Domestic subscribers for Q3 were up 7.1 million over the same period a year earlier, but down from 47 million in the previous quarter following the removal of HBO Max from Amazon Channels. Globally, combined HBO and HBO Max subscribers hit 69.4 million, up 12.5 million year over year and an increase of 1.9 million from Q2.
The company said it expects to reach the upper end of its year-end global subscriber target for HBO/HBO Max of 70-73 million subscribers.
AT&T’s total consolidated revenue in Q3 was $39.9 billion, down 5.7% from $42.3 billion in the same period a year earlier.
WarnerMedia’s reported Q3 revenue of $8.4 billion is an increase of 14.2% from Q3 2020. The company attributed the rise to higher content and other revenues, including the partial recovery from the impacts of the pandemic and higher subscription revenues a year earlier. Total subscription revenue rose 14.7% to $4 billion, mainly reflecting the growth of the HBO Max service. Overall direct-to-consumer (DTC) subscription revenues were up about 25%.
Operating income at WarnerMedia rose to $2 billion, up 15.2% year-over-year, as ongoing investment in HBO Max and incremental ad revenue sharing costs offset higher revenues and lower costs for sports programming.
Content and other revenues rose 31.7% to $3.1 billion on higher TV licensing and higher theatrical revenue. Meanwhile advertising revenue fell to $1.4 billion, down 12.4% from the previous year due to the timing of the NBA season and lower political ad spending.
“We continue to execute well in growing customer relationships, and we’re on track to meet our guidance for the year,” said AT&T CEO John Stankey (pictured). “HBO Max global subscribers neared 70 million. We also have clear line of sight on reaching the halfway mark by the end of the year of our $6 billion cost-savings goal.”
AT&T announced earlier this year that it would merge WarnerMedia, including HBO and HBO Max, with Discovery to form a new company, Warner Bros. Discovery. The deal is expected to close in 2022.