April 29, 2021
WarnerMedia’s June debut of an ad-supported version of HBO Max will reportedly cost subscribers $9.99 per month, compared to $14.99 for the current ad-free option that launched last May. HBO and HBO Max ended the most-recent fiscal period with 44.2 million combined subs. The platforms are projected to have from 120 million combined subs by 2025.
CNBC reported the price point, citing sources familiar with the situation.
“Whether a customer chooses to buy the ad-supported product or buy the straight subscription product, it’s accretive in the same ways to our business,” AT&T CEO John Stankey said on the company’s recent fiscal call. The executive said the ad insertions are not reflective of a failed SVOD platform, but rather a way to mine incremental revenue. Max will only add commercial spots to exclusive programming, not HBO shows.
WarnerMedia had originally considered charging $4.99 for the ad-supported option, but reconsidered, arguing a higher subscription price is a sign “of strength,” according to Stankey.
“It’s always been the plan,” he said.
Rival ad-supported plans from Paramount+ and Peacock cost $4.99. Hulu’s ad-supported plan costs $5.99 monthly.