A monthly subscription of HBO Max is priced at $ 14.99, making it among the most expensive streaming services out there. HBO is working on launching an ad-supported tier of its streaming platform, and if the latest reports are anything to go by, it will be fairly expensive as well.
Ad-Supported Tier of HBO Max Will Launch in June
CNBC reports that the ad-supported tier of HBO Max will launch in June and cost $ 9.99/month. While this is $ 5 cheaper than the ad-free plan, this is still relatively expensive for an ad-supported tier.
Apart from ads, the ad-supported tier of HBO Max won’t offer same-day access to theatrical releases. HBO Max is also scheduled to launch in 60 markets outside of the US this year.
AT&T revealed last week that HBO and HBO Max have a combined user base of 44.2 million subscribers. The company expects the streaming platform to have around 120-150 million subscribers by 2025. The average revenue per user for HBO and HBO Max currently stands at $ 11.72.
With the release of the ad-supported tier, HBO hopes to increase the average revenue per user to $ 14.99. Apart from the subscription fee, HBO will be able to rake in money by selling its advertising inventory. It will also offer pay-TV distributors a lower percentage of the revenue share and make up for it by offering them advertisement slots.
Early last year, WarnerMedia had planned on offering a streaming service with exclusive content from HBO Max with ads for $ 4.99/month. However, executives rejected the idea and instead decided that WarnerMedia would launch a streaming service with content combined from HBO.
Ads Will Only Be Displayed on Exclusive HBO Max Content
HBO’s parent company WartnerMedia plans only showing ads in content that’s exclusively available on HBO Max. No ads will be shown on original HBO shows like Game of Thrones and Euphoria.
The ad-free version of HBO Max was announced last year for $ 14.99/month. This is also the price that HBO charges its pay-TV subscribers for adding the premium channel to their bundle.
Most pay-TV distributors have agreed to the $ 9.99 price and will sell it to customers who only have a broadband connection or have not subscribed to HBO yet. AT&T has also managed to secure a distribution deal with Amazon and Roku for HBO Max after months of negotiations, with the handling of the ad-supported version acting as a major hurdle.
With an ad-supported tier carrying a lower price tag, HBO Max will be able to better compete against Netflix and Disney+. Netflix’s cheapest plan starts at $ 8.99 in the US, with the Premium plan offering 4K streaming available for $ 17.99. Even after a recent price hike, Disney+ is the cheapest streaming service of the three, with a monthly fee of $ 7.99.