12 MAR 2021

HBO MAX WILL LAUNCH AN AD-SUPPORTED AND CHEAPER OPTION IN JUNE

The company also updated its subscriber forecasts for the streaming service, and now expects between 120-150 million worldwide HBO Max and HBO subscribers by the end of 2025.

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AT&T will launch a cheaper and ad-supported HBO Max option in June, the company announced ahead of its investor day. The WarnerMedia parent company also updated its subscriber forecasts for the streaming service, and now expects between 120-150 million worldwide HBO Max and HBO subscribers by the end of 2025. Previously, in October 2019, the group had forecast 75-90 million.

An HBO Max subscription is currently US$14.99 per month, which is the same price that cable subscribers pay for HBO. Offering a cheaper alternative to its $15 service should allow the OTT to more rapidly scale and meet its new, more ambitious subscriber goals. HBO Max had 30.8 million total wholesale subscribers by the end of the fourth quarter.

With the upward revision, AT&T now also expects HBO’s revenue to more than double over the next five years. In 2020, WarnerMedia’s HBO segment had $6.8 billion in operating revenue. “As HBO Max scales at a global level, the company plans to increase investment, with expectations for peak dilution in 2022 and break even in 2025,”  AT&T said in the update.

The group also said it expects to end 2021 with between 67-70 million HBO/HBO Max subscribers worldwide, which would be a 10-15% increase from about 61 million at the end of 2020. The tally of worldwide HBO Max and HBO subscribers comprises United States, HBO Max subscribers and domestic and international HBO subscribers, and excludes free trials, basic, and Cinemax subscribers.

The newer, cheaper tier also will not show commercials inside the original HBO programming that has never run with advertising on one of HBO's own platforms before, according to Jason Kilar, the CEO of AT&T's WarnerMedia unit that operates HBO Max. “We will not be having advertising inside of the HBO original series,”  Kilar assured. The only other big change, besides its cheaper price, is that the ad-supported version will not include the theatrical day-and-date premieres from Warner Bros.

Also in June, AT&T plans to expand HBO Max to 39 countries in Latin America and the Caribbean, followed by 21 countries in Europe in the second half of the year, the company announced.