HBO Owner AT&T Q2 Earnings Slashed $830M
Telco and entertainment giant AT&T – also the owner of HBO – has reported a notable US$830 million slash in Q2 earnings prompt by the coronavirus pandemic.
Results include a 22.9% revenue drop in its WarnerMusic entertainment division, following a significant dip in movie ticket sales.
Early this week, Warner Bros announced it had indefinitely suspended big-budget action spy film Tenet.
The company is said to be more focused on directly pushing movies onto its HBO Max streaming service as lockdown restrictions promote in-home entertainment.
“There’s no question the longer this goes on there’s going to be some content on the margin that we look at and say that it might be better served to be distributed in a different construct,” said AT&T Chief Executive, John Stankey, in a statement.
The economic impact of COVID19 has continued to dampen advertising dollars in the entertainment industry, also accelerating the decline of AT&T satellite TV division.
The company reports 36.3 million US subscribers for HBO Max and its existing HBO streaming service – marginally up from 34.6 million at the end of December 2019.
HBO Max has reportedly said its on track to hit its US subscriber goal of 50 million – 55 million by 2025, but adds relations with Amazon has made user uptake more difficult.
“We still have work to do to educate and motivate the exclusively linear subscriber base,” said Mr Stankey in a conference call with analysts.
“We have tried repeatedly to make HBO Max available to all customers, using Amazon Fire devices including those customers that have purchased HBO via Amazon”
“Unfortunately, Amazon has taken an approach of treating HBO Max and its customers differently.”
In Australia, many HBO programs fall under the umbrella of pay-TV provider, Foxtel, also playable on its BINGE streaming service.
BINGE has reportedly gained a 7% local market share in just two months from launch, putting it on equal footing with Foxtel’s more affordable streaming service ‘Foxtel Now.’
Some commentators have also questioned the validity of recent Roy Morgan streaming subscriber numbers, alleging the growth of BINGE to Foxtel may have been underrepresented.