Last week during AT&T’s investor day presentations, WarnerMedia’s CEO Jason Kilar delivered an optimistic outlook for the growth of the company’s HBO Max streaming service. Kilar’s confidence is based on an impressive array of metrics. The company has already exceeded the target it set for HBO Max to amass 40M subscribers by the end of 2022. These subscribers tend to be younger than HBO’s traditional subscribers, with more than 40% under 35 year old. Kilar now projects that HBO Max subscribers would number 120M-150M by 2025. This growth will hinge on three key factors. First, by the end of 2021, HBO Max will offer a lower-cost service that includes advertising, opening up new opportunities to attract budget-conscious consumers. AVOD will also generate significant new income for the business. Second, WarnerMedia will establish HBO Max as a premiere service in international markets, projecting that as many as 50% of its worldwide subscribers will come from outside the U.S. by the year 2025. Third, it will maintain interest in its higher-price, ad-free service by making it the exclusive on-line outlet for new-release Warner Bros. titles, making them available either simultaneously or shortly after their theatrical releases. The Q&A did not touch on details about the company’s future plans to re-establish an exclusive theatrical release window after 2021. Warner Bros. shocked the industry late last year by announcing that its entire slate of 2021 feature films would debut both in theatres and HBO Max on the same day, rather than reserving an exclusive theatrical release window for exhibitors. As exhibition ramps back up after pandemic restrictions are lifted, some analysts have questioned whether WB is leaving significant revenue on the table by skipping over a traditional theatrical release in favor of its day-and-date strategy which makes films available on HBO Max on the same day as their theatrical debut.
See also: AT&T launches investor day with updates on HBO Max, fiber, spectrum, debt (Seeking Alpha)