It certainly sounds like exciting progress. AT&T (NYSE:T) CEO John Stankey publicly commented at a recent investor conference that 12.6 million people have activated the company's new streaming service HBO Max. That's up from 8.6 million as of the end of the third quarter, and up from zero before the product launched in late May. Not bad, all things considered.

But don't confuse "activations" with "paying customers." A whole slew of people are eligible for free access to HBO Max, and most of these new 12.6 million users may be of this ilk.

Pie chart made up of people.

Image source: Getty Images.

Most may not be paying for HBO Max

It's tough to get a read on just how many existing AT&T customers could enjoy HBO Max at no additional cost to them. But it numbers in the "tens of millions," according to some perspective supplied by the company shortly before the service launched.

Customers of AT&T's top-tier internet, television, and wireless phone services like its Unlimited Elite plan don't have to pay for it, although not all of them will be able to get it for free forever. AT&T TV's Ultimate package, for instance, only offers one year's worth of the streaming service for free. Consumers who subscribe to HBO through a conventional cable provider like Charter Communication's Spectrum or Comcast's Xfinity -- as well as through AT&T's satellite cable service DIRECTV -- have also probably been granted free access to HBO Max. That covers most of the cable-watching country. So, we still don't know exactly how many people these offers might encompass, but "tens of millions" doesn't seem to be a stretch.

And there's the rub. If most of the tens of millions of people who could watch HBO Max's shows and movies for free still haven't even activated the option seven months after it debuted, how many are actually paying for it?

To this end, as of September, AT&T noted only 3.6 million "retail" HBO Max subscribers had signed up. These are people who don't qualify for free HBO Max by virtue of an existing relationship with AT&T, and are purchasing it directly through AT&T's Warner Media arm. That's just not very many, particularly in light of the fact that Comcast just announced that its nascent streaming service called Peacock now serves 26 million viewers after launching around the same time as HBO Max.

Granted, most of those Peacock subscribers seem to be utilizing the completely free, ad-supported version of the platform. Comcast is still monetizing them, though, using lots of content that's also being monetized in more traditional ways.

This reality only underscores the odds that most of the 4 million new HBO Max viewers aren't paying "retail" customers. Consumers seem to be saying they'll gladly tolerate television commercials, but they're not interested in paying for yet another streaming media service.

AT&T shareholders need not sweat... yet

Muted paid interest in HBO Max doesn't inherently spell doom for AT&T's newest pet project. The streaming platform's big strength was always going to be as a customer-retention tool for AT&T's other services. That's not changed.

Nevertheless, it can't be fully leveraged as a retention tool if most of AT&T's 176 million wireless subscriber connections and a huge chunk of its nearly 32 million cable TV and broadband customers aren't tuning in. HBO Max's prospects as a stand-alone revenue growth engine are respectable, but not quite earth-shattering.

To this end, investors will want to track down the number of retail HBO Max subscribers that are on board when AT&T posts results for the quarter ending this month. That's arguably the best measure of the platform's competitiveness within the premium SVOD space. As it stands now, based on what we actually know, AT&T isn't knocking it out of the park.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.