Jason Kilar, CEO of Warner Media, is in the spotlight after AT&T raised its guidelines for the growth of its streaming service.
The company said Friday it expects HBO and HBO Max to grow from 61 million subscribers by the end of 2020 to between 120 million and 150 million subscribers worldwide by the end of 2025, up from the previous forecast of 75 million to 90 million. That growth will be driven in part by the service’s launch in 60 international markets in June and a lower-cost ad-supported service, also debuting in June.
Kilar told CNBC on Friday that the increased guidance is due to “the market response in the first nearly 10 months, combined with the things we think will be very useful in Latin America and Europe, where we already have a presence. both on the programming side and the distribution side. ”He added,“ It’s not just what we think will happen outside of the US, it also depends a lot on where we see the US market in the next few years. to go.”
Kilar predicts that HBO Max will be one of three streaming giants to emerge, along with Netflix and Disney +, hitting 100 million subscribers earlier this month. And HBO Max’s upcoming ad-supported service – Netflix and Disney don’t offer one – will give the company an advantage by offering a lower price.
“To be able to deliver the HBO Max quality experience, which is of the highest quality in terms of quality, to be able to offer it at a lower price and let the consumer decide which version they want,” said Kilar. “I think it will certainly play a role in the American market.”
The company has not yet decided which markets will include an ad-supported version.
Kilar also said the ad-supported version of HBO Max will actually be more profitable than the traditional subscription service.
“It won’t be on the first day, probably give us four quarters, maybe eight quarters to get to our scale when it comes to ad sales and ad placements and whatnot. But if you look at what the odds are – and I say this is based on marketers and how much you put your dollars on the table – to be part of this very light ad environment where the effectiveness is quite high. “
What’s next for theatrical releases?
Kilar announced in December – to the dismay and confusion of content and theater chain creators – that HBO Max would be streaming Warner Brothers theatrical debuts the same day they hit theaters.
That strategy was put in place just during the 18 theatrical releases planned by Warner Brothers this year, Kilar told CNBC
“We feel very good about that decision, we feel very good about that strategy. I wish I could go back in time and instead of having day one or two days of conversations before announcing that news, I wish we would have had a week or two. ”He admitted,“ I think we could have done better in terms of that communication and those conversations with the storytelling partners and directors and producers and their representatives. ”
Kilar said that looking beyond 2021, the studio will use two different strategies for two different types of photos.
“One of them will be the big and epic films you’ve come to expect from us, which have an exclusive theatrical run. I think the series will be shorter than it was in the past. The world of DC and Harry Potter and things like that. big, epic movies that I think they deserve that will get an exclusive theatrical release. But there will be other movies, a huge number of movies going to HBO Max the same day. Movies were made available to exhibitors and movie theaters across the whole world. “
Between the movies that hit theaters exclusively and the ones that go straight to HBO Max, Kilar says they’ll invest more in producing movies for both formats.