AT&T added 2.7 million new customers to HBO and HBO Max in the first quarter, a boost for the company’s new streaming effort in an increasingly crowded field.
The company’s WarnerMedia division, which includes HBO, recorded $8.5 billion in revenue for the period, a 9.8 percent jump over last year, when theater sales and advertising revenue plummeted during the pandemic. Led by the chief executive Jason Kilar, WarnerMedia also includes the cable networks CNN and Turner and the Warner Bros. film studios.
HBO is the cornerstone of AT&T’s media strategy, and the company sees HBO Max as a way to keep its mobile customers from fleeing, offering the streaming platform at a discount to its phone subscribers.
In its report on the year’s first quarter, AT&T stopped disclosing the number of active HBO Max users, obscuring how many people are actually tuned into the new streaming service.
Over all, AT&T counted 44.1 million subscribers to HBO and HBO Max in the United States at the end of March, a gain of 2.7 million from the previous quarter. Before it stopped breaking out the HBO Max subscriptions, in December, it said it had 41.5 million subscribers: 17.1 million for the streaming service, 20 million for HBO on cable and the rest from hotels or other deals.
HBO Max most likely drove the gain in the quarter, which is notable given how competitive the streaming universe has become. HBO Max is also the most expensive of the major streaming platforms, at $15 a month. Netflix, which reported earnings on Tuesday, remains the leader, with 67 million customers in the United States and nearly 208 million in total.
Netflix’s dominance has started to wane, in part because of newer entrants like HBO Max and Disney+. Netflix added four million new subscribers in the quarter, with a little more than 400,000 in the United States.
Netflix chalked up the comparatively sluggish growth to the production slowdown when Hollywood studios largely stopped making shows and films during the pandemic. The company said it expected a more successful second half of the year, when returning favorites and highly anticipated films become available.
HBO Max most likely got a boost from an unorthodox strategy championed by Mr. Kilar: The sibling company Warner Bros. plans to release its entire lineup of 2021 films on HBO Max on the same day they’re scheduled to appear in theaters. The announcement rumbled throughout Hollywood, angering agents and filmmakers who stood to lose out on crucial bonuses and commissions by short-circuiting the old theatrical release schedule.
Mr. Kilar has said the company was likely to go back to a more traditional distribution plan next year. For the rest of 2021, he is counting on the film slate — which included the recent releases of “Zack Snyder’s Justice League” and “Godzilla vs. Kong,” as well as the Friday premiere of “Mortal Kombat” — to help drive people to HBO Max.
The company also plans a global expansion of HBO Max starting in June, along with a lower-cost version of the service that will include commercials. The company has about 19.7 million HBO customers overseas who it hopes to convert into HBO Max subscribers.