AT&T for the last time reported results for its entertainment business, with its Q1 2022 earnings out this morning. The company, which unloaded its WarnerMedia division earlier this month, still operated the business in the first quarter. The company said HBO Max and HBO ended March with total global subscribers of 76.8 million, up 12.8 million year-over-year, and up 3.0 million from the prior quarter. Furthermore, HBO and HBO Max domestic subs reached 48.6 million as of March 31, up 1.8 million from 46.8 million as of the end of 2021 and an increase of 4.4 million year-over-year.
The growth for HBO Max and HBO is a stark contrast to Netflix’s Q1 results reported on Tuesday, with a loss of 200,000 subscribers — and a likely hint as to how some of Netflix’s potential growth was lost.
Netflix shares down more than 20% after losing 200,000 subscribers in first quarter
However, AT&T also reported that WarnerMedia’s operating income declined 32.7% year-over-year to $1.3 billion. The company said during the earnings call, “The declines in earnings at WarnerMedia reflect increase investments incurred in launching CNN+ and expanding new territories at HBO Max.”
HBO Max expanded to 15 countries in March. This statement could also support the claim that CNN+ spent approximately $322,000 in 2021, estimated by Kantar. CNBC recently reported the big bet on CNN+ may not be paying off, with fewer than 10,000 people using the service on a daily basis at present, its sources said.
With the Discovery-WarnerMedia mega-merger officially closed as of early April, the company said revenue at WarnerMedia, including Warner Bros., the Turner networks and HBO, rose 2.5% in the first quarter to $8.7 billion. Meanwhile, ad revenue fell 3% to $1.7 billion due to lower linear television audiences.
“We’re excited about the potential for continued HBO Max growth as the service launches in more new territories,” CEO John Stankey said in the earnings call. “Warner Brothers Discovery is well-positioned to lead the transformation we’re seeing unfold across the media and entertainment landscape. And like many of my fellow AT&T shareholders, who own a stake in this new and promising enterprise, we’re excited to continue to watch their success and the value they create as one of the leading global media companies.”
In addition, subscription revenues were $4.0 billion, up 4.4%, which reflects the growth of HBO Max. Telecom giant AT&T allows some of its users with AT&T unlimited plans to stream HBO Max at no extra charge.
Content and other revenues were $3.1 billion, an increase of 3.4%, “driven by higher theatrical revenues, higher HBO Max licensing, and partially offset by lower TV licensing,” the report wrote.
The telecom company also shared ARPU (average revenue per user) for its domestic subscribers of $11.24, versus $11.15 in the fourth quarter of 2021 and $11.72 in the first quarter of 2021.
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