Coronavirus impact saps AT&T revenue; 3M sign-ups at HBO Max

AT&T Inc. on Thursday said the coronavirus sapped $2.8 billion from its revenue, mostly in its WarnerMedia TV and film division. Its satellite TV business, DirecTV, continued to bleed customers.

“I expect we’re going to be dealing with some of these economic challenges in the COVID environment as we move forward here,” said AT&T CEO John Stankey said during a call with analysts.

WarnerMedia revenue fell 23% to $6.8 billion due to a pullback by TV advertisers, particularly as there were no live sports, and movie theaters closed.

Hollywood shut down production due to the pandemic, delaying movie releases and series for both traditional TV and streaming services. Stankey said the company hopes to resume film and TV production next month.

The company is hoping to navigate the shift to online video with its HBO Max service, which launched in late May. AT&T said it had 3 million people sign up with the $15-a-month service one month after it launched, while 4 million “activated” their Max account — it's included free for certain AT&T customers and cable subscribers who already pay for HBO.

There are 36.3 million U.S. subscribers to HBO Max or HBO, so only about one-tenth of people who could upgrade to HBO Max have. The company said it had “work to do to educate and motivate” HBO customers that they could switch to HBO Max, which has more content.

HBO “has gotten off to a rather inauspicious start,” wrote MoffettNathanson analyst Craig Moffett in a note to investors.

In the wireless business, AT&T's biggest, revenues were relatively steady, slipping 1% to $17.15 billion. It lost 151,000 customers who pay a monthly cellphone bill. That number included 340,000 people that AT&T kept providing service to even though they had stopped...