Big News: After 3 years, the #ReleaseTheSnyderCut campaign has paid off with the release of an alternative version of Justice League on HBO Max.
Big Question #1: Why did Warner Bros re-release this film?
Quick answer: The goal is to drive HBO Max subscriptions. The fan base for this re-release was so active that Warner Bros spent $70M on the re-cut.
Why this matters #1: The original release lost ≈ $50M, and if spending an additional $70M grows HBO Max, this is a wise investment.
Why this matters #2: HBO Max has a steady slate of 19 film releases through the end of 2021.
Flashback #1: HBO Max Puts “Home Box Office” To The Test
Quick math for Warner Media tradeoff from releasing films direct to HBO Max:
1) $1.2B in lost revenue in 2021
2) $12 monthly average revenue per user (ARPU) for HBO Max
3) $144 in annual ARPU
4) $1.2B / $144 = 8.3M
FYI: Wall Street loves recurring revenue. For example, Netflix is valued at ≈ 9X annual revenue. If HBO Max were able to add 8.3M subs @ $144/year, then the value of AT&T could increase by $11B.
FYI: Warner Media increased its subscriber projection by ≈ 64%.
HBO Max subscriber projection for 2025:
1) Original – 75M – 90M
2) Updated – 120M – 150M
Flashback #2: How Is HBO MAXimizing Growth?