AT&T CEO suggests Netflix’s price hike is great news for HBO Max

Illustration by Alex Castro / The Verge

It seems like it's good news for the business of HBO, as it keeps getting more expensive. John Stankey, the chief executive of AT&T, said during the earnings call that the higher price of competitors will help the company grow in the US.

Stankey said that the market was going to come to them on pricing and that they were no longer the high-priced offer.

The company recently raised its prices across all of its plans, bumping its popular standard plan to $15.50 from 14 per month. The plan now costs $20 per month. The most popular on-demand streaming services in the market are now more expensive than the ones that only have ads.

That puts HBO Max in a fairly competitive position, particularly as the cheaper plans lack premium features like support for 4K included on HBO Max. HD and Ultra HD streaming are not included in the $10 plan, and simultaneous streams on that tier are not included.

Stankey said that streaming services that launched their products at lower price points to win over subscribers are likely to have difficulty ramping up their average revenue per user.

The company exited Amazon Prime Channels last year, but its domestic businesses are still doing well. By the end of 2021, domestic subscribers had increased from 45.2 million to 46.8 million, just shy of the 47 domestic subscribers it had prior to the break up. Stankey said the move was beneficial for the business in the long term.

Stankey said that at the end of the day, you want full control of your customers.

WarnerMedia's merger with Discovery is a good example of how direct access to its customer base can help. Stankey said it was better to have them there where you have direct access, control of them, and be able to market to them.

By the end of 2021, the number of subscribers of the two networks had grown to 74 million. It's difficult to compare AT&T's streaming rivals to its own, because the two content arms are grouped together. The business of the company grew by 13 million between the year before and the year after, thanks in part to straight-to-streaming releases and a new ad-supported plan.

It looks like Stankey was correct.