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The CFOs of AT&T and Discovery touted their companies’ early streaming momentum during a virtual investor conference on Monday.
WarnerMedia owner AT&T feels “good” about the early success of streaming service HBO Max, including subscriber and engagement trends, and its hybrid film release strategy for 2021, AT&T CFO John Stephens told the Deutsche Bank Media, Internet & Telecom Conference.
Addressing Warner’s hybrid distribution model for its 2021 film slate, he said: “We announced we would do it for a year and we are in that process now. What we have seen is not only good viewership of those movies on HBO Max but engagement that follows. That has been encouraging, so real success with it so far.”
With a limited opening of cinema circuits in the U.S., “we pivoted in that COVID environment,” Stephens said. With “the expectation that reopening will be gradual, it was a thoughtful, worthy investment in HBO Max,” he added. If AT&T’s Warner Bros. had decided to hold all movies scheduled for this year, “you are going to be in a position where all the studios have been holding movies and the flood of the theaters, even if they are fully open, would change all the economics anyway.”
Looking ahead at hybrid releases for the rest of the year as the economy reopens after lockdowns due to the coronavirus pandemic, Stephens said: “We will continue to learn from it. … We are pleased with how it’s worked so far. … We think it has worked out well for all involved.” And he added: “I do believe that there will be some gradual return, probably later im the year, to theaters and moviegoing, and that’s real positive.”
Discovery CFO Gunnar Wiedenfels also told the same conference on Monday that the company was happy with the early trends of its Discovery+ streaming service. Asked about his previous comment that the streamer would reach 20 percent profit margins, he said he was “very convinced we can at least hit that number,” adding that “we’ll definitely break even earlier than peers.”
Asked about the $5 per month price for the service and $7 without advertising and whether the firm could raise the cost, Wiedenfels said: “I think it’s too early to talk about pricing power,” adding: “Right now these are the right price points for us.”
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