AT&T raises subscriber forecast for HBO Max as streaming booms

(Reuters) - AT&T Inc said on Friday it expects up to 150 million global subscribers for its video services HBO Max and HBO, and $15 billion in revenue for the businesses by the end of 2025, as more people turn to cheaper streaming services for entertainment.

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Shares of AT&T were up 2% to $30.16 in morning trading.

The U.S. wireless carrier has invested heavily to break into the streaming video market dominated by Netflix Inc and Walt Disney Co’s Disney+.

WarnerMedia Chief Executive Officer Jason Kilar said during a virtual investor presentation on Friday that he believes HBO Max is already the No. 2 revenue-generating standalone video service in the United States.

The company said it expects $14 in average revenue per user for HBO Max in the United States by 2025, up from $12 this year.

Netflix, the world’s largest streaming service, booked $6.64 billion in revenue in its fourth quarter.

HBO Max, which launched in May, includes 10,000 hours of content from brands and libraries such as Warner Bros, New Line Cinema and Cartoon Network.

New movies this year, such as the upcoming “Godzilla vs. Kong,” will be released HBO Max at the same time as they debut in movie theaters, whose business has been slammed by the pandemic.

“We’ve worked tirelessly for the right to partner with the world’s best talent,” Kilar said. “Consumers are using and loving HBO Max.”

A lower-priced version of HBO Max supported by advertising will launch in the United States in June, but will not include new movie releases, Kilar said.

HBO Max will also expand internationally to 60 markets including in Latin America and Europe, the company said.

Reporting by Eva Mathews and Munsif Vengattil in Bengaluru and Sheila Dang in Dallas; Editing by Krishna Chandra Eluri, Devika Syamnath, Jonathan Oatis and David Gregorio