- AT&T CEO John Stankey told CNBC on Thursday he's confident in the future of HBO and HBO Max.
- "I actually believe the glory days are still in front of us. They're not behind us," he said.
- HBO and HBO Max added 2.7 million U.S. subscribers in the first quarter, AT&T announced in its better-than-expected first-quarter earnings results.
AT&T CEO John Stankey expressed confidence Thursday in the future of HBO as the telecom giant's pay TV unit competes in the crowded field of digital streaming.
"I actually believe the glory days are still in front of us. They're not behind us. They're different days, and the product is different," Stankey said on CNBC's "Squawk Box" shortly after AT&T reported better-than-expected first-quarter earnings results.
HBO, which was founded in 1972, has "gone through reinvention over its years, and this is just the next chapter of reinvention," Stankey added.
In the first quarter, AT&T added 2.7 million U.S. subscribers for HBO and HBO Max, the latter of which is its online streaming option that launched in America in May 2020. The services now have a combined 44.2 million subscribers in the U.S. and almost 64 million worldwide.
Netflix — founded in 1997 as a DVD rental by mail company and a decade later introduced streaming — finished the first quarter of this year with 208 million global subscribers, according to its earnings report released Tuesday. In March, Disney+ topped 100 million subscribers in just 16 months after its debut.
Stankey said he likes where HBO Max is positioned in the increasingly competitive streaming landscape, particularly as the service will soon expand into international markets, and as a cheaper, advertising-supported version launches in the U.S. in June. The ad-supported pricing has not be announced yet, though Stankey did say it'll be lower than the ad-free HBO Max cost of $14.99 per month.
"Our domestic business is still scaling," said Stankey, who took over as AT&T's chief executive in July. He had been president and chief operating officer.
"We fully expect that there's a receptive market for, at least, two-thirds of U.S. households that are going to want more than one streaming service," he added. "Netflix is a very capable and solid product that I'm sure many households are going to choose to have, and we'd like HBO Max to be one of those products."
Stankey touted HBO and HBO Max's average revenue per user of $11.72 in the U.S., saying it's "really impressive, the ARPU is as strong as it is." At the same time, he said AT&T believes the ad-supported HBO Max will expand the pool of potential subscribers, while setting it apart from some of its rivals.
"Whether a customer chooses to buy the ad-supported product or buy the straight subscription product, it's accretive in the same ways to our business," Stankey said. Giving consumers the choice to choose which version of HBO Max they prefer "is a strength" and "by no means an admission of something didn't work out the right way. It's always been the plan," he added.
Shares of AT&T closed Thursday up more than 4% at $31.36. The stock is up 9% in 2021.