Nearing two years since its launch in the U.S., HBO Max committed to investing $18 billion into growing the platform.
Nearing the two-year anniversary since its launch in the United States, HBO Max has committed to investing $18 billion in 2022 into adding new shows to its growing streaming platform.
Last week, the WarnerMedia-owned streaming platform said that it had reached 74 million Max and regular HBO subscribers at the end of 2021. At the end of 2020, that number was at 61 million. WarnerMedia is owned by AT&T (T) – Get AT&T Inc. Report and is being spun off into a new venture with Discovery Media (DISCA) – Get Discovery, Inc. Class A Report.
Quick Rise To The Top
Hit shows like “Succession” and “The White Lotus,” as well as exclusive access to Warner movies like “The Matrix Resurrections,” have helped it carve out a niche of dedicated subscribers alongside streaming behemoths like Netflix (NFLX) – Get Netflix, Inc. Report and Disney (DIS) – Get Walt Disney Company Report.
That said, taking on the giants may take longer than a few years — in the third quarter of 2021, Netflix added 4.4 million new subscribers for a total of 214 million. The last numbers for Disney Plus pin it at around 118.1 million subscribers.
WarneMedia CEO said that the growth was largely due to the company’s new $9,99 a month ad-supported version of the streaming service, according to an interview in The Hollywood Reporter.
“We have seen very healthy adoption of that version of the service,” WarnerMedia CEO Kilar said. “And it makes sense because when a customer is empowered with choice, where they can either have a higher-priced ad-free service or one that’s more affordable made possible by the presence of thoughtfully executed advertising, I think that’s a really good situation for customers. So we are seeing a lot of consumers choose the ad-supported option, and it’s early days, it’s only been about six months.”
Is HBO Max Part of a Streaming Big 3?
HBO has achieved some success but it’s competing against players including Disney, which has a ner-endless array of world-class intellectual property to pull shows from. And, in addition to having to compete with a company that owns Star Wars, Marvel, Pixar, and countless classic animation characters, Disney also plans to spend More than $9 billion per year on content for DIsney+.
That number, which CEO Bob Chapek cited during the company’s most recent earnings call, does not include the films which play in theaters before moving to the platform.
HBO, of course, also competes with another heavy hitter in Netflix, which while it lacks Disney’s IP, has a big headstart in the streaming space and a huge library of content. Netflix has also made it clear that money is no object as it said in investor documents that it plans to spend $17 billion on content in 2022.
Kilar, however, is not worried and believes his company can compete.
“It’s fair to say it’s becoming a three-horse race at the front of the pack,” Kilar told Financial Times. “With regards to storytelling…and when you look at the US subscriber numbers, things drop off a fair bit after the first three horses.”
