AT&T takes hit on HBO Max

US telco AT&T reported a decline in revenue in the fourth quarter of 2019, impacted by its investment in subsidiary WarnerMedia’s forthcoming streaming service HBO Max.

John Stankey

In its financial results for 2019, AT&T said consolidated revenue for the final three months of last year slipped to US$46.8bn from US$48bn the previous year, hit by foregone content licensing revenue in preparation for HBO Max.

Revenue at fellow subsidiary Turner, meanwhile, increased by 1.6% in the fourth quarter year-on-year, thanks to subscription revenue gains.

Excluding the HBO Max investment, revenue in the last three months of 2019 would have equalled the prior-year quarter at US$48bn.

AT&T also noted a 945,000 net loss in premium TV subscribers and a 219,000 net loss in its TV Now subscribers in the quarter.

For the full year, AT&T’s consolidated revenue increased to US$181.2bn from US$170.8bn in 2018. AT&T reaffirmed its 2020 guidance of 1% to 2% growth in revenue.

At the release of the company’s financial results, chief operating officer John Stankey said Turner’s TNT and TBS would shift further towards unscripted programming as WarnerMedia focuses on high-end scripted shows.

“You’ll see the content shift start to occur a little bit – a little bit more unscripted content come in, things that cause people to go into the office and talk about it around the water cooler,” Stankey said.

“That will probably start to supplant hours. It might have been more general entertainment-oriented content that you are going to see showing up on SVoD platforms, like HBO Max moving forward.”