Forgive yourself if you’re confused by the HBO Max subscriber counts AT&T released on Thursday’s quarterly earnings call, where they announced that Max had amassed over 4 million active subscribers by June 30.
This fact was somewhat obscured by the reporting that HBO Max had what AT&T referred to as 23.6 million “wholesale” subscribers, as well as 3 million “retail” subscribers. The “wholesale” subscribers represent customers who subscribe to HBO via their Pay TV provider–but haven’t necessarily even downloaded the HBO Max app yet.
With “retail” subscribers having activated their service, the actual total number of eligible HBO subscribers who activated their HBO Max service in its first month is the total number of activations (4.14 million), subtracting retail Max subscribers (2.975 million), leaving 1.165m from “wholesale” subs.
This means that only 5% of HBO TV subscribers who are eligible for Max have activated so far. With 95% of eligible subscribers not using the service, labeling them as “subscribers” is generous.
Not all Pay TV providers came to terms with AT&T for HBO Max, and they cover a subscriber footprint of 5.9 million HBO subscribers. Then there are the subscribers to HBO Now, HBO’s first direct-to-consumer offering, coming in at 3.9m. Note that this will include Now subscribers using Amazon Fire TV and Roku devices, who aren’t able to view HBO Max on these platforms, owing to their continued standoff with AT&T.
It is likely that this number will increase in the coming months, as AT&T works with Pay TV services to educate subscribers that they have free access to a new streaming service. The discontinuation of HBO Go, the prior way HBO TV subscribers could stream HBO content, on July 31 will also push HBO subscribers already comfortable with streaming to turn on their access to Max.
Should AT&T continue to report on the total number of HBO Max activations to the detailed degree provided in Q2’s earnings, it will be possible to determine how many TV subscribers are only interested in the ‘traditional’ viewing methods of linear, VOD and DVR for HBO.
Two other HBO-related nuggets from AT&T’s call were, first, the confirmation that in 2021 there will be an AVOD version of HBO Max. No further details were available, but expect an AVOD tier to have limited content and possibly exclusive linear FAST channels, similar to what NBCU’s Peacock recently launched.
The other point of interest was concerning total HBO subscribers. AT&T made clear to note that the total number of subscribers to any U.S. platform (HBO, HBO Max and HBO Now) was now greater than in Q4 2019 and Q1 2020. There was, however, no direct comparison between Q2 2019, most likely because current counts would come in below. Recall that Q2 last year saw the greatly anticipated final season of “Game of Thrones,” which will have inflated HBO subscribers beyond the normal le
Save for a new “Game of Thrones” hitting HBO Max in the coming months, VIP anticipates that activation of the service among HBO subscribers with access will continue to be slow. Our prediction for Q3 is between 2 and 2.5 million HBO subs setting up their Max service, with 20 million of those with access continuing to not use it. Maximum activation will not be possible for some time yet.