Earlier this year came word that WarnerMedia and AT&T were prepping an ad-supported tier of their new streaming service HBO Max which would come at a lower price point. In a report, CNBC reveals that this tier for viewers is still on track for its previously announced June start date but also report that the tier will be priced at $9.99, a few dollars less than their competitor, Netflix, at $13.99. Regular, ad-free subscriptions to HBO Max run $14.99 per month and for all of 2021 includes the Warner Bros. theatrical slate like upcoming releases The Suicide Squad and The Matrix 4. It’s unclear if the tier with ads would allow access to these films but check back here for more updates.
“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 Chief Executive John Stankey previously told CNBC. He added that adding this tier was “by no means an admission of something didn’t work out the right way. It’s always been the plan.” According to the outlet WarnerMedia only “plans to only attach advertisements to programming that’s exclusively available on HBO Max” but won’t put commercials in HBO originals, since they weren’t originally meant to have ads anyway.
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The outlet further notes that a $4.99 per month ad-supported tier for HBO Max was reportedly considered at one point but it was shot down.
HBO Max announced last week that their subscriber base has risen to 44.2 million subscribers (a tally based on figures measured at the end of March 2021). Releases like Zack Snyder’s Justice League and Godzilla vs. Kong in the spring saw an additional 2.7 million new subscribers join the service at the end of March.
“HBO Max continued to deliver strong subscriber and revenue growth in advance of our international and AVOD launches planned for June,” AT&T CEO John Stankey told investors on a recent call. The same call revealed that first-quarter revenue for WarnerMedia rose a reported 9.8% to $8.5 billion. With the addition of a subscription tier with ads it’s possible that HBO Max could see an even sharper increase in new users over the summer, but official numbers on that success may not be available until later in the year.
AT&T previously projected that it will have between 67 – 70 million subscribers worldwide by the end of this year, compared to 61 million at the end of 2020, and their ad-based tier could no doubt push them that far.
