These 3 Streaming Services Crushed It Last Quarter

Americans are streaming more video than ever before amid the COVID-19 pandemic. The average U.S. household now subscribes to 2.5 streaming services versus 2.1 a year ago, according to an estimate from analysts at UBS. Americans signed up for 9 million total new subscriptions last quarter, way up from the 2 million subscriptions added in the third quarter last year.

Here are the three most popular streaming subscription additions from the last three months, according to the analysts.

A silhouette holding a remote in front of dozens of screens.

Image source: Getty Images.

HBO Max

AT&T (NYSE:T) added 1.7 million HBO subscribers in the third quarter. In fact, HBO Max was an even bigger winner as household subscribers eligible for HBO Max offset losses from commercial subscribers. The company added 650,000 direct subscribers and 1.5 million wholesale subscribers through its distributors.

The company activated another 4.5 million subscriptions for HBO Max, bringing the total to 8.6 million. That’s still just a fraction of the 28.7 million eligible subscribers, though.

Net additions of 1.7 million may lead the way among major streaming services, but it might be less than investors want to see. Last quarter was the first full quarter since the company launched HBO Max. Other streaming services have seen much better launches recently, particularly those with similar content and marketing budgets, and the brand recognition of HBO.

HBO Max has been held back because AT&T was unable to negotiate distribution deals with the two biggest connected-TV platforms in the U.S. What’s more, it launched without much in the way of new original content, due to production shutdowns during the COVID-19 pandemic. After finally striking a deal with Amazon and resuming production, it should be able to make progress in improving HBO Max activations. Considering the importance of HBO Max to AT&T’s overall video strategy going forward, activations is the key metric to watch for now.

Hulu

Hulu added 1.1 million subscribers last quarter. The vast majority of the Walt Disney (NYSE:DIS) streaming service’s net additions were for its Live TV service, which accounted for about 700,000 additions.

Disney has increased its investment in content for Hulu over the last few months, including its FX on Hulu initiative, to bring FX’s acclaimed series as well as new original content to the platform. Meanwhile, it’s been able to add hundreds of thousands of live TV subscribers as consumers shift from traditional pay-TV services. It likely benefited from the return of live sports last quarter, an area of focus in the marketing for Hulu + Live TV.

UBS appears to have overlooked Disney’s ESPN+ subscriber additions last quarter. The sports streaming service ended last quarter with 2.8 million more subscribers than three months earlier, reaching 10.5 million total subscribers. Many of those subscribers are likely subscribing through the bundled offering with Hulu and Disney+.

Disney’s streaming services are firing on all cylinders a year after the Disney+ launch. The company recently reorganized in order to put a greater focus on streaming content. Management will provide an update on its future plans for streaming at an investor day next month. Look for updates on subscriber outlooks for all of its streaming services, as well as plans for increased content investments and break-even operating profit timelines.

CBS All Access

ViacomCBS (NASDAQ:VIAC) added an estimated 900,000 new subscribers to its flagship streaming service last quarter. The company reported 17.9 million total domestic streaming subscribers between All Access and Showtime. 

CBS All Access got a boost from the addition of ViacomCBS’s 3,500 episode library of content from Nickelodeon, BET, Comedy Central, MTV, and Smithsonian, plus the almost 200 films from Paramount that it added in late July. The additions are a preview of what’s to come from Paramount+, which will replace CBS All Access early next year. It also made a deal to bundle its two subscription services with Apple‘s Apple TV+.

The streaming service could have another big net addition number in the first quarter of next year. CBS will carry the Super Bowl in February, which has historically driven record sign-ups for All Access. The official launch of Paramount+ could also drive new sign ups as ViacomCBS puts more marketing behind the broader service.

Investors will see subscription streaming subscriptions reflected in the company’s affiliate revenue, but management also breaks out revenue attributable to all of its streaming services, including the ad-supported Pluto TV. It noted subscription revenue growth accelerated last quarter to 78%. 

ViacomCBS — like many other media companies — plans to increase its investments in streaming. “We’re executing a plan which will bring more content, more marketing, and more distribution to the table,” CEO Bob Bakish said on the company’s third-quarter earnings call. Look for continued acceleration in subscriptions, but with increased investments in content and distribution.

Americans are streaming more

Media companies like AT&T, Disney, and ViacomCBS are all leaning into streaming and investing more money into content and marketing. The efforts are paying off. While net additions might not top 2020 — when everyone was stuck at home — 2021 will see another year of investment and growth across the board for media companies investing in streaming.

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