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The advertising-supported tier of HBO Max will launch the first week in June at $9.99 per month, the company said Wednesday.
The name, “HBO Max With Ads,” and the pricing details were announced as part of WarnerMedia’s upfront presentation to advertisers.
The ad-supported tier of HBO Max is seen as a crucial piece of the company’s strategy to grow its streaming business. The company last reported that it had a combined 41.5 million HBO and HBO Max subscribers in the U.S. and 61 million worldwide, but that it expects to have between 120 million and 150 million subscribers by the end of 2025.
The less expensive advertising-supported version is seen as critical to that growth, allowing the company to more easily launch in other countries and enticing subscribers turned off by the $15 price point in the U.S. The company says that HBO series and movies will not have ads, instead focusing the ads on library content and Max Originals programming, as well as ads integrated into the user interface.
“We ultimately want to price it in a way where we are economically indifferent” as to whether consumers choose the ad-free or ad-supported tier, WarnerMedia CEO Jason Kilar said at a conference earlier this month.
“Ours is a rapidly evolving industry and we are transforming with it,” Kilar said, acknowledging that the upfront to follow was taped before the merger was unveiled. “While there is still so much more to come, for the moment it’s business as usual.”
During WarnerMedia’s (pre-recorded) upfront presentation, Kilar said that the ad-backed option will be “the most brand-safe, elegant experience for advertisers, across all of television.”
At $9.99, HBO Max With Ads is $5 per month less expensive than the standard, ad-free version of HBO Max, but it is still priced higher than some competitors. Peacock’s ad-supported tier is $5 per month; Discovery+ is $5 per month, too; while Hulu’s ad-supported tier is $6 per month; and Disney+, which is ad-free, is $8 per month.
It will also launch without a key selling point of the standard HBO Max: Day-and-date release for Warner Bros. films. Those will be reserved for the standard tier.
Of course, the launch also comes at a very uncertain time for WarnerMedia, which unveiled plans to merge with Discovery Inc. earlier this week. That merger, which is not expected to close until sometime in 2022, could see HBO Max merge with Discovery+, or the company create a new bundle similar to what Disney is doing with Disney+, Hulu and ESPN+.
“We will have enormous flexibility in how we package our streaming services,” said Discovery CEO David Zaslav this week, adding that “we will look at the range of options to unlock value here in the U.S. and around the world.”
Zaslav will run the combined company, as Kilar’s future at WarnerMedia remains unclear, however the executive addressed the merger in a brief introduction at the beginning of the upfront.
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