HBO Max’s US subscriber growth beats Netflix in first quarter

HBO signed up 2.8m US subscribers directly to its Max streaming service in the first quarter, as blockbuster films such as Godzilla vs Kong attracted Americans to the challenger to Netflix. 

The company counted 9.7m retail subscribers to HBO Max by the end of March, compared with 6.9m at the end of 2020. This does not include people who have access to the WarnerMedia-owned service for free through their cable subscription.

The additions were well ahead of those of Netflix, which lured only 450,000 new subscribers in the US and Canada in the same period, fuelling concerns that the streaming giant has been hit by increasing competition in the market it pioneered. 

After years of watching Netflix dominate the streaming landscape, the world’s largest media and tech companies have sought to fight back with their own services. In the past year and a half, Disney, Apple, WarnerMedia, Comcast and others have launched new streaming platforms as they battle for a piece of the future of entertainment. 

With 74m subscribers in the US and Canada, and 208m worldwide, Netflix is the clear leader. However, the company on Tuesday warned that it expected its customer base to remain “roughly flat” in North America during the quarter ending in June, sparking concerns that the group has reached its peak in its largest market.

“Investors should be concerned about [Netflix] subscriber growth in the US and Canada,” said Michael Nathanson, analyst at MoffettNathanson. “New subscriber acquisition growth feels like a significant issue.” 

WarnerMedia is looking to mould one of Hollywood’s most valuable catalogues — spanning the Warner Bros film and television studios, the HBO network and a portfolio of cable channels — into a consumer-facing streaming platform to compete with Netflix. 

The company last year launched HBO Max in the US for $15 a month. With 9.7m direct sign-ups, and a total subscriber base of 44m to both HBO and HBO Max, Warner’s growth has been slower than that of rival Disney, which last month reached 100m subscribers to the Disney Plus service.

However, the group touts its higher subscription price compared with rivals as a plus. WarnerMedia made $11.72 per subscriber on average in the latest quarter, well above the $4 on average Disney makes from its streaming subscribers. 

WarnerMedia plans to launch HBO Max in Latin America and parts of Europe later this year. The group is also releasing all Warner Bros films this year on HBO Max at the same time they debut in cinemas, as part of the effort to attract sign-ups.

News of its subscriber growth came as parent company AT&T reported net income of $7.6bn on $44bn of revenue in the quarter.

Netflix earlier this week dismissed increased competition as a threat to its business, even as it reported a sharp slowdown in sign-ups. On an earnings call, co-founder Reed Hastings said the group was “a little bit wobbly right now”. 

“There’s no real change that we can detect in the competitive environment,” he said. “It’s always been high and remains high which is what gives us confidence that it’s intensely competitive, but it always has been.”