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Warner Media CEO Jason Kilar is in the spotlight after AT&T upped its forecast for the growth of its streaming service.
The company said on Friday that it expects HBO and HBO Max to grow from 61 million subscribers at the end of 2020 to between 120 and 150 million subscribers globally by the end of 2025, against 75 million to 90 million. This growth will be driven in part by the launch of the service in 60 international markets in June as well as a lower cost ad-supported service, which will also debut in June.
Kilar told CNBC on Friday that the increase in forecast was due to “the market response in the first nearly 10 months, combined with things that we think will be very helpful in Latin America and Europe, where we have an existing presence., both on the programming side and on the distribution side. “He added,” It’s not just what we think will happen outside of the United States, it’s also on a large scale. part depending on the evolution of the US market in the years to come. “
Kilar predicts that HBO Max will be one of the three streaming giants to emerge, with Netflix and Disney + surpassing 100 million subscribers earlier this month. And HBO Max’s next ad-supported service – Netflix and Disney don’t offer one – will give the company an edge by offering a lower price.
“Being able to offer the HBO Max quality experience, which is number one in quality, so that we can offer that at a lower price and let consumers decide which version they want,” Kilar said. “I think that’s going to play a role in the US market for sure.”
The company has yet to decide which markets will include an ad-supported version.
Kilar also said that the ad-supported version of HBO Max would actually be more profitable than the traditional subscription service.
“It won’t be day one, give us probably four quarters, maybe eight quarters to reach our scale when it comes to sales and ad placements etc. But when you look at the opportunity – and I say this based on the marketers and how much you put on the table – so that you can be a part of this very lean advertising environment where the efficiency is quite high. “
What’s next for theatrical releases?
Kilar announced in December – to the dismay and confusion of content creators and theater channels – that HBO Max would air Warner Brothers’ theatrical debut on the same day they hit theaters.
That strategy was implemented just through the 18 theatrical releases Warner Brothers had scheduled this year, Kilar told CNBC.
“We feel really good about this decision, we feel very good about this strategy. I wish we could go back in time and we could have had, instead of a day or two of conversations before announcing this news, I wish we would have had a week or two. ”He admitted,“ I think we could have done a better job in terms of these communications and these conversations with the storytelling partners, directors and producers and their representatives. “
Kilar said that looking beyond 2021, the studio will be adopting two different strategies for two different types of images.
“One of them will be the big, epic reach movie you’ve come to expect from us, which has exclusive theatrical release. I think the series will be shorter than it was in the past. The World DC and Harry Potter and stuff like that; big, epic movies, I think, deserve and will have exclusive theatrical release. But there will be other movies, a lot of movies that will go to HBO Max on same day that these same films were made available to exhibitors and cinemas around the world. “
Between films that debut exclusively in theaters and those that go straight to HBO Max, Kilar says they will invest more in producing films for both formats.
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