HBO Max, HBO Hit 76.8M Global Subs In Q1, Up 3M From Year End; WarnerMedia Profit Squeezed By CNN+, Streaming Spend

HBO Max and HBO had 76.8 million global subscribers as of March – up by 3 million from the previous quarter and 12.8 million from the year earlier. Domestic subscribers of 48.6 million rose 4.4 million year-on-year, AT&T said, reporting its last quarterly numbers as the parent of WarnerMediar which merged with Discovery April 8.

“AT&T has entered a new era,” said CEO John Stankey.

AT&T said the primarily driven by international as well as domestic retail subscriber gains. Domestic subscriber ARPU was $11.24.

WarnerMedia’s operating income of $1.3 billion fell 32.7% on continued investments in HBO Max and the launch of CNN+. Expenses rose on higher programming and market costs. Ad revenue dipped.

The numbers follow a market rejection of Netflix after it announced slower sub growth and forecasts earlier this week. Investors will be tuned in to numbers from streaming rivals for any signs as to the health of the sector.

WarnerMedia first quarter highlights:

Revenue was $8.7 billion, up 2.5% from the year before year before, driven by higher subscription revenues and higher content and other revenues, partially offset by lower ad sales.

Subscription revenues of $4 rose 4.4%, primarily reflecting growth of HBO Max.

Content and other revenues was $3.1 billion, up 3.4%, driven by higher theatrical and HBO Max licensing, offset in part by lower TV licensing. Advertising revenues fell $1.7 billion, down 3% due to lower linear audiences and tough comps to the prior-year political ads, partially offset by higher sports.

Operating expenses totaled $7.4 billion, up 13% year over year driven by higher marketing costs as well as higher programming costs and incremental selling costs associated with DIRECTV advertising revenue sharing arrangements.

Operating income of $1.3 billion fell 32.7% on continued investments in HBO Max and the launch of CNN+. Operating income margin was 15.1%, compared to 23%.

 

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