HBO Max To Launch $10 Ad-Supported Tier This June - Report
Would you sit through commercials to save $60 a year?
If the $15 monthly charge for HBO Max is too much for you, then WarnerMedia might have an answer for you this summer--if you're willing to watch a few advertisements. HBO Max will ask $10 a month for its previously-announced ad-supported tier this June, according to a report from CNBC.
If you want to go watch Mortal Kombat and Godzilla vs. Kong right now, HBO Max is going for $15; that's the same price you'd pay for the premium channel on your local cable service. HBO Max doesn't offer a free trial right now, unlike major competitor Netflix.
CNBC notes that a $10 tier would give the growing service a potential leg up on Netflix; the streaming giant is asking $13.00 per month right now. The other interesting wrinkle is that WarnerMedia won't show you just any ads. Instead, the service will only attach ads for HBO Max-exclusive programming. That means that while you would be seeing ads, they'd be for Doom Patrol and Peacemaker--not for migraine medication for moms, or car insurance sold by tall birds.
WarnerMedia and parent AT&T insist that this isn't a response to slow growth. According to AT&T CEO John Stankey, the HBO average revenue of $11.72 per user in the U.S. is "really impressive." He told CNBC that an ad-supported tier would expand the HBO Max audience, and that this has "always been the plan."
CNBC notes that pay-TV distributors like Comcast aren't thrilled that HBO is undercutting its own $15 service with a $10 service that has all the same stuff on it, since they get anywhere from 30% to 60% of the take from that $15 fee. With that said, broadband-only customers are increasingly common, and distributors are reportedly prepared to start marketing the cheaper service to those users and users who have thus far resisted the pull of stuff like Game of Thrones, Westworld, and WarnerMedia's upcoming slate of simultaneous HBO Max/theatrical releases.
Backing up Stankey's statement that this has been in the works for quite a while, CNBC also notes that difficult negotiations around this ad-supported model were a major hurdle in getting the service onto Roku and Amazon streaming boxes.
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