AT&T (NYSE: T) recently announced that it plans to see a major increase in subscribers from now through 2025. It anticipates global subscriptions to go up between 120 million to 150 million for HBO Max and HBO. In addition, AT&T intends to have between 67 million to 70 million HBO Max subscribers by the end of 2021.
HBO Max is expected to expand to around 60 U.S. markets this year.
HBO and HBO Max have had major success and increase in terms of domestic subscribers, going up by 20% (from a combined 34.6 million to 41.5 million per year) in the fourth quarter of the year, according to CNBC.
"As HBO Max scales at a global level, the company plans to increase investment, with expectations for peak dilution in 2022 and break even in 2025," the company said in an update, according to Variety. AT&T also has some international expansion plans in the works, as well as 5G and fiber expansion.
One of AT&T's primary goals includes establishing a strong customer base and respectable values, which ultimately adds to the level of growth that the company will have in the end. Although having a strong consumer base is important, profit is nevertheless still significant to the company.
HBO Max expects profit to increase dramatically, with an average of approximately $14 per customer subscription plan, which is a cost of two dollars more than the $12 of last year. It contains 10,000 hours of content from other brands, such as Warner Bros, New Line Cinema, and Cartoon Network.
In June, HBO Max plans to come out with a much cheaper, ad-supported subscription plan that will differ from the current one. AT&T believes that this particular cheaper, ad-supported plan will enable the HBO Max to experience true growth, in terms of business as well as customer connectivity.
"It turns out that most people on this planet are not wealthy," WarnerMedia CEO Jason Kilar said at a recent Morgan Stanley investor conference, discussing the ad-supported streaming strategy, quoted by Variety. "And so if we can wake up and use price and be able to kind of invent and do things elegantly through advertising to reduce the price of a service, I think that's a fantastic thing for fans. And I do think once they see it, because I've seen the service in terms of the designs that we've come up with, I think people are going to be so excited about how we've been so thoughtful about the insertion of advertising and how it's a very organic nature of the experience."
HBO Max plans to have an enormous shift in terms of success with its number of future subscribers, and a cheaper, ad-supported subscription plan will ultimately propel the company towards that goal.