REFINITIV STREETEVENTS EDITED TRANSCRIPT T.N - AT&T Inc at Barclays Future of Media Conference (Virtual)

EVENT DATE/TIME: JUNE 03, 2021 / 4:20PM GMT

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CORPORATE PARTICIPANTS Andy Forssell Warner Media, LLC - Head of HBO Max

CONFERENCE CALL PARTICIPANTS Kannan Venkateshwar Barclays Bank PLC, Research Division - Director & Senior Research Analyst

PRESENTATION Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst All right. Welcome back, everyone. For the next section, it's great to have with us Andy Forssell, EVP and General Manager, HBO Max. Prior to that, Andy served as the Chief Operating Officer at Otter Media, and he was acting CEO of Hulu for a while and served as SVP of Content and Distribution at Hulu as well.

Andy, thanks so much for being here. And before we get into the session, I think Andy has a safe harbor disclosure that he wants to refer to.

Andy Forssell - Warner Media, LLC - Head of HBO Max Thanks, Kannan. Oh, there's your video. I was going to say I wasn't seeing video. Thank you very much for that intro. Yes. On safe harbor, just to point out, as housekeeping, safe harbor statement is available. It's downloadable from both the Barclays site and from att.com.

QUESTIONS AND ANSWERS Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst All right. Now that the important work has been done, let's get into it. So I guess starting with the big picture and the obvious question is the transaction with Discovery that was announced last week. You've had some time to think about the go-forward strategy and the approach to the market and so on, and you've been working on the streaming strategy for HBO for a while.

So if you could help put the deal into perspective in the context of what you were working on as well as what it means for you and your team? And how you expect to operate the next 6 to 12 months until the deal actually closes?

Andy Forssell - Warner Media, LLC - Head of HBO Max Sure. Look, in the very big picture, I think none of us should be surprised to see some consolidation. I mean I just think of it in the long term, 10-plus years, maybe even 15, you're going to have a very small number of global services that have user dartboard of choice to pick a number, but 300 million or 400 million global subs, we've always estimated well it could be more than that and thrive economically.

And what that number is, nobody knows, but it's a small number. And you're seeing that set up now. So I'm not -- none of us should be shocked to see some consolidation over time. The one funny thing about this, at least from the team's perspective, nothing changes overnight. It's obviously huge news, but then our mission today is the same as it was a couple of weeks ago, run the business. We've got great momentum that I can talk about in a moment. And we're at least a year away from anything happening.

So certainly, big news and one that we pay attention to. But it doesn't change what we do, which is continue the sort of mission we've been on for the last year plus, really a couple of years as we built the service.

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And I'll just summarize where we've been and where we're going to say, look, the thesis behind HBO Max was simple. You had an HBO programming team that was firing on all cylinders in terms of programming. Last season's Game of Thrones, Succession, so many other shows that they brought to life. But in 2018 and 2019, because they were tied largely to a distribution system that was in secular decline in cable and satellite, we lost 3 million total subs, the total HBO numbers over across those years.

Double the product -- excuse me, double the content, make the product better get more sophisticated in engaging people and living in a digital universe and a direct-to-consumer universe, that was the thesis of HBO Max, and we turned that around, and we've done that.

So you look at the last 4 quarters, after a several million sub decline, we're up 11 million off a base of 30-some -- low 30s, over those 4 quarters, and that is accelerating, not decelerating. And steadily, but surely, that kind of bar chart by quarter goes up. The wholesale piece of it, meaning satellite, telco, cable is fairly stable. It's gone up a bit but low to mid-30s. The retail piece, meaning direct-to-consumer, either directly billed by us, or through our in-app purchase partners has gone up at 250-some percent in that period. That is again accelerating, not decelerating.

So feel great momentum. Happy to talk about any of those demogs. But that's going to continue and then eventually, yes, we've got to figure out how do you combine that with discovery and what does that mean. But for the team, it seems quite a ways off because we've got to wait for the Department of Justice and that type of process to play out.

Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst Yes. I mean in terms of the momentum, I guess, HBO has been around for a long time. It's been around for decades. And like you said, I mean, the 30 million kind of a sub number has been relatively stable and now it's accelerated over the last few quarters. And it's taken a lot of effort to accelerate that distribution growth. Distribution tends to be expensive. When you try to do it on a stand-alone basis, it's the case for everyone.

So when you think about the new strategy, which involves different kind of channels, right? I mean, you have, of course, the ad-supported service, which just launched this week. You have partnerships with distributors that you're working on. And so -- and of course, there are bundling approaches with wireless that are different kinds of distribution approaches that you've leaned into.

Could you give us some sense of which of these distribution approaches you've found the most useful? And going forward, what kind of approaches we should expect as you scale the service around the world?

Andy Forssell - Warner Media, LLC - Head of HBO Max Sure. Well, truly, you mentioned distribution is hard. I think we've transitioned into a period where one way to look at it is that distribution has gotten pretty easy. What is hard is retention because customers now have the big red button, they can push it any time. And you're facing instant accountability, which isn't comfortable all the time, but it's largely a good thing.

Lack of accountability means you cannot be a great programmer and still have good economics for a while before it catches up to you. That's not really good for anybody. And so we're distributing really broadly through wholesale partners through direct means, through the in-app purchase shops. We'll do that worldwide and there'll be a mix. We're certainly comfortable with that. We have great distribution relationships worldwide that we can rely on across Warner Media.

That will continue. Some of the key in our wholesale side, though, is given that accountability and that big red button that people have, you need to see what they're doing and get feedback from them in -- literally in real time. So you see a shift to people viewing even in wholesale relationships through our app so that we can see their behavior.

Now we may not speak to them directly because somebody else owns the customer relationship, we may know their name, we may not. But we know who they are, and we know whether the service is working for them and we know what they watch and how long they watch it, that's critical.

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So the focus, I think, shifts away from pure acquisition and distribution that is stable to, how good are you at retention and understanding what people need and keeping their hand off that big red button as I call it.

Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst And I guess when you think about distribution from that perspective, I mean, like you said, customers can leave anytime and their approaches to wholesale distribution, especially with things like your wireless service, for example, or even on other services, that tends to have lower churn, I would assume, compared to a direct approach to the market. But there, you have a lot more aggregators who will become intermediaries in the process. You guys had issues with Roku, Amazon in the past.

How are you thinking about that dynamic in terms of these aggregators coming in in-between? And especially now when you may not be under the AT&T umbrella and you have to run this independently. Does that process become more challenging, less challenging? How are you thinking about churn and potentially cost from that perspective?

Andy Forssell - Warner Media, LLC - Head of HBO Max Sure. Well, on a distribution piece, first of all, I'll say we had great support from Jason Kilar in the WarnerMedia CEO position and also from John Stankey at AT&T to play the long game last year. And we didn't get to terms that made sense with Roku and Amazon for launch. Did that cost us in the early days because there were devices we couldn't be selling? Absolutely, it did. But we got to really good outcomes with them that I think those partners would agree with. Nobody won or lost. We just got to a set of terms that I think were better, and it took some number of months.

So I feel very lucky that we get to play kind of the long game there and get to the right outcome, and I think those partners would agree. We just launched our ad-supported offering version of HBO Max yesterday. A couple of those deals got done in the middle of the night as the software was going out. It's sort of the nature of business. And we value all those partners, but the good news is there's a wide array, and we're broadly distributed.

And at times, you may have some short-term disagreements or lack of common ground with some of them. But I think ultimately, we're all pulling in the same direction. And our biggest protection we can bring there is make great programming that people care about. And if so, you're kind of -- you're a must-carry and you want to be in that must-carry from a consumer perspective that they really want you. And I have a lot of confidence in our teams that we're going to keep making things that matter to people and that they want to see.

As far as retention, look, again, we've got great data. We pay attention to both wholesale and retail customers that are using our app. We know what they like. We know what they don't like. We know how often they come. You'd be surprised that the wholesale customers are slightly less engaged, but I think the gap is less than most people would assume.

And we obsess over getting to them, having a relationship with them, sending them even an e-mail or an in-product notification that has the right show at the right time based on really smart data and then smart presentation to make them realize it's the right show at the right time to say, "Oh, that's good. I'm going to watch that tonight."

It also helps in that we've had some great first-run films, given the decisions we had to make under a very crazy year with COVID and theater closings and that we had some first-run films that were big attractors. That's helped. And it's also taught us a lot about the interplay of film and television in that think with your consumer hat on, sometimes you sit down in front of that TV and the job you're asking a service to do for you is help me spend a good couple of hours tonight.

Sometimes it's let me find something that I and my spouse or a friend are going to watch over the next 3 weeks because it's a series of plenty of episodes. Those are different jobs. It's been great to watch the interplay between those two. Wonder Woman is a great example. Flight Attendant was a hit show for us before Wonder Woman launched.

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Wonder Woman brought in millions of new subscribers, they all -- I'll oversimplify, but it wasn't obviously all of them, but 2/3 of them watched Flight Attendant, you could watch them after watching Wonder Woman saying, "Oh, let's check this out," and they enjoyed it, they got hooked, they watched it all the way through.

Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst Got it. That's interesting. And so when you think about these titles, especially the day and date releases of Warner Bros. films, what are the long-term expectations around this, in terms of film windowing? Obviously, this was done under circumstances that were very different. But as a steady-state operating model, what should we expect for film distribution broadly?

And I guess, if I could extend that into some of your content deals as well, you have output deals outside the U.S. with different distributors How does that evolve as you expand the footprint globally?

Andy Forssell - Warner Media, LLC - Head of HBO Max Sure. Let me hit that last point, and then I'll go back to film and how we think about the evolution a little bit. The last point is a simple answer. We have a lot of great partnerships with where we're selling content or channels to partners all over the world.

In the long term, it's really simple. HBO Max is likely to be the primary vehicle for distribution, but that's over the next decade. Plenty of those partnerships will last 3, 4 in some cases, 5 more years, and we'll make them successful. But I think you can expect, and I think you can expect us for most of the major media companies that the trend will be towards distributing yourself more directly through these direct-to-consumer offerings because of that accountability that's critical to have to thrive and survive in a more direct-to-consumer world.

And as you look at our rollout, we've talked about 61 markets by this year internationally as we'll take the U.S., add 60 more in Latin America and Europe. Our forward guidance is based on those 61 countries. Many of the countries that typically would have been done first, certainly the U.K., Germany, Italy, Canada, Australia, they're not in that group yet because they are -- we do have distribution deals that are longer term. And again, great partners that we'll continue to work with. But at some point, and we obviously have a map and a detailed plan that rolls over into us using HBO Max as the primary distribution mechanism.

Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst Can I just follow up on that before you get to film?

Andy Forssell - Warner Media, LLC - Head of HBO Max Sure.

Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst So on these content licensing deals, I don't know if you can be specific about this and it's perfectly fine if you can't, but are there any change of control provisions? Does the Discovery deal in any way impact any of these output deals? And is there an option that you guys have to potentially maybe pay and get out of these deals sooner in order to expand your launches?

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Andy Forssell - Warner Media, LLC - Head of HBO Max Yes. So I have no idea about change of control. I just simply don't know that. I know it hasn't come up and I think it probably would have. So I doubt there's anything there, but I do not know.

Look, we've talked -- there were a couple of opportunities where we talked about could we accelerate this, particularly in key markets, but nothing that got to super substantive discussions. Do I think at some point before 2026, when we -- that's the time frame we sort of think of ourselves as fully distributed, one or two of those things may have come up, and we were able to accelerate the time line. I think that's more likely to happen than not happen. But there's nothing definitive in place. So right now, our rollout is based on those deals expiring in their normal course.

Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst Got it. And on the film windowing side, is this a new normal?

Andy Forssell - Warner Media, LLC - Head of HBO Max Yes, sure. So, yes, it's been said many times, COVID accelerated, experimentation accelerated by necessity, evolution. I don't think that means we stay where we are. You're going to see in 2022 a lot of experimentation that's going to be far more wide-ranging than it would have been without COVID. But you're not going to see -- I don't think you'll see replications what we did this year. It was under extreme conditions that we -- I think the right thing to do was a very straightforward uniform approach to the full year.

You'll see Disney experiment, Uni is going to experiment. We will as well next year. And you're going to see a mix of films being first run on SVOD and not in theaters, you'll see films in theaters first run, not on SVOD. You'll see PVOD, you'll be experimenting -- we'll see experimentation across the board. And then I expect '23, '24 to probably start to settle down.

I think the good thing is consumers get to vote. They're going to tell us broad experimentation by literally every player in the marketplace. Consumers are going to respond to that. By the end of '22, I think we'll have a really clear signal on how does that evolution move. We believe there's a place for theaters in the long term. Super important to us that something like that thrive and survive.

Again, consumers and exhibitors will experiment and tell us what form that takes, how often are you eating dinner there versus watching a traditional big box of a room. So a lot of evolution to play out there, but we expect that to have a long life, and it's going to take some experimentation to see what form that takes. And then obviously, SVOD is going to grow, I think transactional probably drops a little more in its various forms. But again, consumers will tell us in '22.

Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst Got it. And just a bit more specific and granular question on this. The decisions that you made for movies this year, are they basically specific for this year? Or your agreements with distributors basically give you the option to continue with these models in the future?

Andy Forssell - Warner Media, LLC - Head of HBO Max Yes. So all the work that was done in December, January and on to cement the plan for this year was definitely very specific to '21. But '22 titles are obviously already in play. And so in parallel, we were talking about '22 and where does that go. And in some respects to reassure exhibitors, yes, this isn't totally the new normal. This is a giant exception that we need to do. We will snap back in some regards next year, but in some regards not.

So I wouldn't -- again, I'd take it as really appropriate and we're confident, and I think our exhibitors, the talent of many people involved at this point would agree it was the right path. We've kept up a supply of films to theaters that they wouldn't have had otherwise. I think it's been a great

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©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 03, 2021 / 4:20PM, T.N - AT&T Inc at Barclays Future of Media Conference (Virtual) interplay between SVOD and theatrical distribution. But it was the right thing for this year, but it's going to be hard to extrapolate. Again, you'll see everybody trying almost all models next year.

Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst Got it. The other thing I wanted to touch on a little bit was ad-supported streaming, and you guys launched the model this week. Now most of the recent ad-supported launches we've seen, whether it is Discovery Plus or even the launches from Paramount, but even completely free services like Pluto, I mean, I think most of them have surprised investors with the kind of growth they've been able to get initially.

Your model is slightly different because your premium content doesn't seem to have advertising. So when you -- could you just frame the AVOD opportunity for you? Why doesn't that create more upside than what you guys have guided to? And why keep advertising away from the most valuable content, where you could potentially get the best price for that inventory? So could you just talk through some of the discussions internally on that?

Andy Forssell - Warner Media, LLC - Head of HBO Max Sure. I think the basic concept behind an ad-subsidized version of an ad-free SVOD product is pretty simple. You're going to get to a larger market, like total addressable markets larger. Netflix is, I think, probably defining the ceiling on what full penetration in the U.S.' Fed market is, and they're riding that up. And in fact, in some cases, they are propelling that wave along with now many of the rest of us.

I think with ad-supported, you add probably 20% to that. And eventually, I look at that market, this is a little hand-waving by me, but I think it's appropriate, we should get back to 100 million-plus homes that we serve during the heyday of cable. I think SVOD and some ad-supported SVOD versions should get back to that. That ceiling shouldn't be any different. And how fast we can all prognosticate about how fast we get there or not, but you're going to get to lower pricing is large markets. So that's very simple.

We're not in a rush, we're growing rapidly. The big thing for us is how do you do it in the most premium way possible? And if you take a look at what we launched yesterday as an ad-supported option, I'll tell you, it is not. I give the tech teams and the product teams and our ad teams a lot of credit. It is premium. Like there's never a hitch. You'll never see anything knitted together. You'll never wait and say, is the ad going to load? It will never happen.

Tweet at me if you ever see anything like that. You're not going to see the same ad 17 times. Again, tweet, DM me if you ever see it and hold us accountable. But it's been really thought out to say, how do you do this right and make it feel really premium. And I think the team did a great job in that. I expect that to make -- certainly to give us some upside.

Our numbers this year, obviously, we've been planning that AVOD offering for quite a while. Our numbers this year and guidance takes into account that, that will be there. It also takes in account that the first run films are not part of that offering this year. That was one hold out there by February of '22, we'll be back to where it will be content parity.

I think that's when it really takes fire because a lot of people have shown, I mean, Hulu has great experience, and I saw this in the early days of Hulu, people are comfortable with ads far more if they make the choice and say, yes, I want this subsidization. I'll take the price break. And meanwhile, not only is our presentation elegant and seamless as I said, but it's going to be a pretty low ad load and our hypothesis there is message recall, brand recall will be higher. The fewer ads you have, there'll be worth more. We'll get to monetize that. Ad partners will agree there's worth more.

That's the experiment we have to prove out in the next year and make it reality and not slip back into what many providers have done with maybe starting with a similar thesis, but said let's add another ad to each break because that's the easiest way to increase revenue. We worry that down that path lies, let's just say, a path to not being premium.

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Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst Yes. And I guess when you think about other pieces of -- other kinds of content that are coming in to HBO Max in the future, sports and news being the prominent ones, they might be a bit more supportive of the AVOD model compared to some of the other premium content that you have on the service.

So could you give us the thinking around sports and news? You guys have signed some recent sports deals. What should we expect there in terms of the kind of product you're thinking about? And would it basically be the kind of broadcast we have gotten used to on television? Is there something different in terms of the kind of content you're planning to put there?

Andy Forssell - Warner Media, LLC - Head of HBO Max Yes. So let me take sports and news separately because they're a little bit different. But before I go there, look, sports and news are still a huge part of what makes cable and satellite TV such a powerful engine. Got 85 million households in the U.S. that are still subscribing to some form of cable subscription or via satellite. And that's larger than any of the SVOD providers right now.

Now is that number going to go up or down? It's going to go down, not up, but that's still very powerful. Sports and news are at the heart of it. And the whole model of sports rights that has been so successful in cable involves leagues selling what -- if you looked at them on their own are kind of odd little slices of sports rights, Thursday night games and football or this conference in baseball.

And so that has been phenomenal in cable because we all subscribed and you had all the pieces, and you probably didn't pay too much attention about the fact that those pieces were spread out. In essence, that's harder. I don't think that rights landscape is going to be nearly as successful in SVOD.

So we -- look, we announced the Premier League in LatAm and Brazil and Mexico. That's not an odd slice of rights, it's a very healthy -- if you look -- it powers the message. If you love the Premier League, you should subscribe to this, no-brainer. You saw the announcement on hockey probably, right? Hockey, that primarily was a real vote of confidence and investment in the Turner networks because sports is so critical and is part of their identity. And to add a major sport there was the kind of statement we wanted to make at both the fans and to the marketplace.

But as the announcement included, will we experiment with that on HBO Max? Sure. I don't have a time line, but absolutely. And it's not just how do we present those games? Is it all live? Is there VOD? But also, what shoulder content goes around it? Should the talent that cometh be different in a digital world? Should you create content around it that feels different than the amazing stuff that we do today on Turner?

News, look, CNN has had the best year ever, it's leading by a wide margin all news networks under Joe Zucker, it's been phenomenally, phenomenally successful. And most of that is powered through the engine of cable. That will continue. Our investment there is huge. But we will look at what can you do direct-to-consumer.

And then to your last question, we don't think it's just repurposing all that and putting it online in some IP-directed format. We think it's going to change. Some of the content needs to change. I won't talk about the details there, but a lot of work going on to say, what does that look like and what does an Internet native version of what CNN does so well look like online.

And then that's something you could do independent. It's something you could do as part of HBO Max. We don't have -- that's all being worked out now. But I guess I'd say is I'm optimistic about the fit between news and general entertainment. They're different needs, but I'm optimistic. Sports is -- I'm not pessimistic. It's going to take some experimentation on what works in SVOD because, again, what worked in cable doesn't necessarily translate.

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Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst Got it. And when you look at these different forms of content, whether it is sports or news or first-run movies or originals, everything seems to have a slightly different purpose. Some of it is acquisition content, some of it is engagement content that people really just keep watching for a longer period of time.

When you look across these buckets, these content buckets, could you help us understand how important each of these buckets has been? So in other words, the first-run movies have they been more powerful from an acquisition perspective than originals? What do you expect from sports and news, for instance? If you could just talk through that.

Andy Forssell - Warner Media, LLC - Head of HBO Max Sure. So I think the films differ title by title. And you're right, and we think of what you're pointing out is very explicit internally at HBO Max. We look at every piece of content and say how much value does it have for acquisition? And how much value does it have for engagement? Those are not totally unrelated, but mathematically, we look at them very separately.

And as we get more and more experience and more and more data that helps us understand how does Casey Bloys, as he programs the overall service, where does he steer? How much is it worth paying for certain things? So you're right to call out those 2 things as very distinct pieces of value that attach to content.

In terms of the films, as an example, it's different title by title. Obviously, Wonder Woman '84 had huge acquisition value and huge engagement value. And both were off the charts, which for the cost of that movie, they'd better be, right? Like it's sure, darn well, it better deliver and it totally did. That was followed by The Little Things, which was the second -- really the first 2020 title with Denzel Washington, really 3 Oscar winners in that movie.

That was reasonably strong because Denzel sells so well in acquisition, but that was huge on engagement. And similar to Flight Attendant, almost everybody that watched, came in for Wonder Woman stayed and watched Flight Attendant and then watched The Little Things, and it got a huge audience. Fantastic movie, but I was struck by the fact that the percentage of audience that movie got on HBO Max versus what it would have done in theaters was much different. In other words, The Little Things really enjoyed the benefit of a huge wave of audience.

So we look at that very closely. I mentioned Flight Attendant. Mare of Easttown is another good example. It's been a huge hit both on the service and on linear. It's a record setter on HBO Max. And yet even before you get to all the linear viewing, which was significant because it's on HBO as well, and that show was instantly very strong on engagement. And then because it's kind of a who done it and it was so engaging and it rightfully got covered well, it became more and more of an acquisition driver over time.

So I don't know if that's a direct answer to your question, but it tells you a little bit about how we think about these things.

Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst Got it. All right. And then I guess in terms of content volumes, that's the other big debate. And we're almost out of time, so this might be a good way to summarize the conversation. But when you think about overall content volumes. Obviously, it's exploding across the ecosystem, and that's driven some deals like the Amazon-MGM deal is one example of this. And the Discovery deal with you guys is obviously another example.

But broadly, do you expect more deals in the space purely from the perspective of content needs or in terms of scale? What do you expect going forward? And more importantly, I guess, scaling content for a service like HBO Max is not just a function of money, right? I mean you can invest money, but then there is a scarcity of talent, there's a scarcity of production, I guess, production capabilities at the back end.

So when you think about scaling content, how easy is it to get to your goals over the long term of spending $15 billion plus to scale your content volumes?

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Andy Forssell - Warner Media, LLC - Head of HBO Max Look, quantity and quality both matter. But I'll tell you, they're probably -- if we could look ahead, I had looked at the programming schedule for 2022 in great detail. There are probably 10 or 12 titles that will drive most of the acquisition. If you look at House of Dragon, the kind of much-heralded Game of Thrones prequel and then Peacemaker from James Gunn, which is -- I've seen pieces of it, it's phenomenal. Those 2 titles alone, first half of the year, second half of the year, will drive an immense amount.

So you need content that matters. So quantity is absolutely important. But in this world, you've got to have content where people say, "I've got to see that." It's hugely powerful. And so look, we were always there on quality over quantity. The good news is we're well funded. As I said, our goal is hundreds of millions of subs worldwide. We're going to have plenty of quantity as well.

But in any given month, there's one or 2 titles that really matter, and I think that's going to be true for all these services. You then need a great product and great content experience that can dig up something from 3 months ago or from a year ago or from 20 years ago or 50 years ago for that matter, and say, "Oh, this is what Kannan should watch next. And let me put it up in a way where he realizes that."

That's huge, but we have decades and decades of great content, right person, right time, we're seeing people are engaged. I mean, we've done 2.5, 3 hours a day on our average active video viewership. That consumption level has been remarkably consistent. And it's consistent whether we have a hit at the moment or not because the experience has gotten better at getting the right show in front of the right person.

Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst Got it. All right. I guess we are out of time. I know you have other meetings to get to. So thanks so much, Andy. This was great. This was very insightful. Thanks for spending time with us today.

Andy Forssell - Warner Media, LLC - Head of HBO Max Thanks, Kannan. Great to chat.

Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst Same here.

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