HBO Max plans to add a cheaper ad-supported tier in June
HBO Max will offer a more affordable, ad-supported option this summer. The announcement comes as WarnerMedia’s parent company, AT&T, provided an update on its strategy and financial outlook for 2021.
HBO Max launched in May of last year and quickly became one of the market’s most popular streaming services. AT&T said it anticipates between 120 million and 150 million HBO Max and HBO subscribers across the world by 2025 — up from its initial projections of 75-90 million. Offering an ad-supported option will surely help attract more subscribers.
AT&T also said it plans to expand HBO Max to 60 markets outside the U.S. beginning in June; the service is currently only available in the U.S. It’s an aggressive expansion but necessary as HBO Max looks to attract a global audience as it battles Netflix, Disney+, and others. Both the ad-supported and regular streaming tiers will presumably be offered when HBO Max expands to other territories.
It’s unclear how much HBO Max’s ad-supported option will cost when it becomes available. The service’s current price is $15 per month, and it’s also offered for free or at a reduced cost to AT&T customers. Just to give some context, Hulu offers an ad-supported plan for $5.99 per month, so perhaps HBO Max’s ad-supported option will be comparable.
In addition to the presence of commercials, there will be a few differences between the two plans. The ad-supported option won’t be able to watch major theatrical releases the same day they hit the platform. That includes titles like The Suicide Squad, Matrix 4, and Dune.
However, AT&T said commercials wouldn’t be inserted into some of HBO’s most popular originals, such as Game of Thrones. The ad-supported option will likely insert commercials into shows like Friends and in movies, mirroring the cable experience.
We’ll bring you information on the service’s ad-supported tier, including price and launch date, as soon as it’s available.
Update 1: Ad-supported tier to cost $10/mo
Sources speaking to CNBC reveal that the upcoming ad-supported tier on HBO Max will cost just $9.99 per month. WarnerMedia will attach ads to programs exclusively available on HBO Max rather than in all popular HBO shows. The company reportedly originally planned to sell a $4.99 per month tier that only allowed access to content exclusive to HBO Max, but they ultimately nixed the idea in favor of a combined product with HBO.
Pay-TV distributors tell CNBC that they are “displeased” by the existence of the lower-cost tier but are nonetheless “prepared” to market it to non-HBO customers and broadband-only subscribers. More details will likely emerge of the new tier as we get closed to its launch in June.