AT&T Signed Up 4 Million HBO Max Customers

AT&T reported second-quarter results Thursday, and the numbers showed customer defections across the board, including in its wireless, broadband and satellite TV businesses. But arguably its most anticipated metric was how many people signed up for its new HBO Max streaming service.

The platform, introduced in late May, attracted 4.1 million customers in its first month, the company reported; in comparison, the rival Disney+ signed up 10 million in the first 24 hours. AT&T said it hoped to have 50 million HBO Max and HBO customers by 2025.

To get there, AT&T will need to convert more of its regular HBO customers to HBO Max customers. Over 23.5 million people who pay for regular HBO are able to switch to HBO Max.

AT&T sells two versions of HBO: One is the premium cable network, and the other is the new streaming product. Both cost the same, but HBO Max has much more content.

Customers may also be confused about HBO versus HBO Max, or may not be aware they can even make the switch — an ongoing marketing challenge for AT&T.

In October, Mr. Stankey called it a gauge of the customer’s brain power: “Why wouldn’t you want twice the content for the same price?” he said at the time. But on Thursday’s earnings call he acknowledged the confusion and said, “We still have work to do to educate and motivate” customers to adopt the newer service.

The company’s traditional TV business, including its satellite (formerly known as DirecTV) and online cable platform, saw a net loss of 954,000 customers, a downturn it blamed on lower household spending because of the pandemic. It was a further sign the company could end up selling that business altogether. A combination with the rival Dish could help both companies, but such a deal would face steep regulatory hurdles.

Elsewhere, AT&T’s wireless division saw a loss of 154,000 customers in its traditional service where people pay a monthly bill. It added about 165,000 new customers to its prepaid plans.

Factoring in resellers and other connected devices like tablets, AT&T now claims 171.4 million total wireless accounts, an 8 percent increase from last year. The phone giant still has plenty of cash coming in the door, allowing it to pay down its enormous debt and shell out dividends.

Revenue at its HBO division was down 5.2 percent to $1.6 billion, a result of more people canceling or cutting back their cable and satellite accounts. But AT&T is spending more — costs were up about a third to $1.5 billion — to invest in HBO Max. Content is expensive.

Advertising revenue for the company’s cable network division, which includes CNN, TNT and TBS (where it airs sports programming), dropped 37 percent to $796 million, the biggest shortfall across the media group.

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