‘Most People are Not Wealthy’: WarnerMedia CEO Eyes Ad-Supported HBO Max as Antidote to SVOD Cost Fatigue

Maintaining that “most people on this planet are not wealthy,” WarnerMedia CEO Jason Kilar on March 4 said a cheaper ad-supported HBO Max option is a “fantastic thing for fans.”

At $14.99 per month, HBO Max is the most-expensive subscription streaming service on the market. With consumers barraged by competing SVOD options, driving up household spending on par with linear pay-TV, a  less-expensive ad-supported SVOD service may be just what the doctor ordered, Kilar maintains.

Speaking very early from the West Coast on the virtual Morgan Stanley Technology, Media and Telecommunications Conference, Kilar said the pending launch of an ad-supported Max option would help draw budget-conscious consumers.

“It turns out that most people on this planet are not wealthy,” Kilar said. “If we can wake up and use price and be able to invent and do things elegantly through advertising to reduce the price of a service, I think that’s a fantastic thing for fans.”

While Kilar didn’t disclose pricing for ad-supported Max, as the former CEO of Hulu, he understands the marketing. Hulu charges $5.99 monthly with advertising, $9.99 without ads. HBO and HBO Max ended 2020 with more than 41 million combined subscribers in the U.S.

“I’ve seen the [new] service in the terms of the designs that we’ve come up with — I think people are going to be so excited about how we’ve been so thoughtful about the insertion of advertising and how it’s a very organic nature of the experience,” he said.

When asked about Warner Bros. Pictures’ landmark decision to release its entire 2021 slate on Max concurrent with box office launches, Kilar said the data remains in its early days. He said the studio has titles in the pipeline earmarked for theatrical exhibition.

“I think it’s too early to tell if things are changed on a permanent basis with regard to the economics,” he said. “I tend to not think that that’s the case.”

With federal rollout of coronavirus vaccinations in full swing, Kilar said he believes pent-up consumer demand to return to normal and theaters could see a “crazy resurgence” among moviegoers.

“I could easily see that happening,” he said. “And we will be there to serve them in that situation, and proudly so.”

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