Netflix and HBO Max’s Q1 subscriber growth results show how crucial international expansion is to the streaming wars

Godzilla vs kong
‘Godzilla vs. Kong’ Warner Bros.
  • Netflix missed its Q1 growth targets by 2 million subscribers, but still gained about 4 million.
  • HBO Max, which is only available in the US, added nearly 3 million subscribers in Q1.
  • It shows how crucial international expansion is to the streaming wars.
  • See more stories on Insider’s business page.

Netflix had a disappointing first quarter that sent its stock tumbling 10%.

Netflix added about 4 million subscribers total worldwide – 2 million shy of its initial projections for the quarter – including 448,000 in the US.

But the service still gained more subscribers overall than WarnerMedia’s HBO Max, which is only available in the US. HBO Max gained almost 3 million subscribers in Q1.

The difference between the two shows how crucial international expansion is to the streaming wars, as Netflix’s worst miss since 2013 still put it above HBO Max on new net additions. HBO Max is set to launch in Latin America in June.

AT&T, the corporate parent of WarnerMedia, said during its Q1 earnings report on Wednesday that Max now had 9.7 million retail subscribers (those who subscribe directly to Max), an increase of 2.8 million from the previous quarter. It didn’t disclose “activations” as it previously has, which account for HBO customers who have accessed their Max subscription.

Netflix has 207 million subscribers worldwide, with 67 million in the US.

Zack snyder justice league
‘Zack Snyder’s Justice League’ HBO Max

The results come after a quarter in which WarnerMedia made bold moves to help boost Max subscribers. Its decision to release movies simultaneously in theaters and on HBO Max this year was particularly met with backlash in Hollywood.

Movies like “Godzilla vs. Kong” and “Tom and Jerry” have been box-office successes despite also streaming. (“Godzilla vs. Kong” has passed $80 million domestically and is approaching $400 million at the worldwide box office.) “Zack Snyder’s Justice League,” the long-awaited director’s cut of the superhero teamup movie, also debuted exclusively on Max in the US after a years-long fan campaign.

Moving forward, there’s some good news for both Netflix and HBO Max, despite the mixed results in Q1.

Netflix missed subscriber expectations, but churn decreased. As Insider’s Ashley Rodriguez reported, retaining existing subscribers could help Netflix sustain its edge in the streaming space during what will be a challenging year after pandemic-related growth in 2020.

And data has shown that WarnerMedia’s hybrid theatrical/streaming strategy has helped Max. “Wonder Woman 1984,” which debuted on Max and in theaters at the same time, generated 4.3 times the signups compared to the average weekend in December, according to the analytics firm Antenna.

As more Warner Bros. movies are released throughout the year under the same strategy, including “The Suicide Squad,” “The Conjuring: The Devil Made Me Do It,” and “Dune,” Max could benefit.