AT&T has struggled to gain subscribers for HBO Max to offset the investment they have put into it. It doesn't help that the ongoing pandemic has brought film releases to a halt in theaters. AT&T decided to do something rather drastic without actually telling anyone, which was announcing that Warner Bros. would release its entire 2021 film stale on HBO Max concurrently with their release in theaters.
In an attempt to put out all the fires on their bridges, Warner Bros. began, only after the announcement, to pay actors and directors and actors based on this new release strategy. After the release of Wonder Woman 1984 on HBO Max, this strategy didn't seem to have any tremendous gain for AT&T or Warner Bros., which doesn't bode well for the future of the streaming service.
A BOX OFFICE LOSS AND SUBSCRIBER GAIN
The Hollywood Reporter is reporting that Wonder Woman 1984, which earned $37.7 million domestically and $110.7 million overseas for a total of $148 million, will lose Warner Bros. more than $100 million at the box office according to their sources.
The outlet could not determine if this loss would be mitigated by the gain in new subscribers for HBO Max.
Another report from THR determined the number of activated users added to HBO Max. In early December, just before the release of WW84 on their streaming platform, AT&T CEO John Stankey touted that the service was nearing 12.6 million activated users.
This means that the number of newly activated users, which could be attributed to the addition of Wonder Woman 1984, was 4.57 million, as they reported HBO Max ended the year with 17.17 million activated users.
John Stankey seemed happy with this result, saying that “The release of Wonder Woman 1984 helped drive our domestic HBO Max and HBO subscribers to more than 41 million, a full two years faster than our initial forecast,” but it was not made clear if all of these are brand-new users or users who upgraded their HBO Now subscription to HBO Max, which can be done for free.
A WORRYING SITUATION FOR WARNER BROS.
This isn't great for Warner Bros., no matter how John Stankey tries to frame it.
AT&T claims to have beat their initial forecast by “a full two years,” but with no international presence, other streaming platforms still beating them at home, and one of their biggest blockbusters bombing at the box office, which only garnered them less than five million new activated users on HBO Max. So, it doesn't look good for Warner Bros. and their future releases if they perform the same with such little gain.
Even just imagining that every single one of those 4.57 million activated users is brand new and have paid for HBO Max, that would only be approximately $68.5 million. Of course, the primary goal is to have subscribers stick around to pay monthly, but that isn't going to be 100% consistent.
In a recent survey, only 23% of participants said they signed up to HBO Max just for the Wonder Woman sequel, and that only 14% among that same percentage would continue to subscribe to HBO Max.
Keep in mind that Warner Bros. also paid Gal Gadot and Patty Jenkins $10 million each as compensation due to the hasty decision to have the film release on HBO Max concurrently in theaters. Taking that into account, the profit of these new users could only be as much as $48.5 million.
Warner Bros. will have to do the same for the directors and stars of other releases like The Suicide Squad, making this move on HBO Max seem much less lucrative than initially expected.