WarnerMedia is planning to charge US$9.99 per month for the advertising-supported version of its HBO Max service, set to launch in June, people familiar with the matter told CNBC. The ad-free version of HBO Max, which debuted nearly a year ago, costs US$14.99 per month, which is the same price the company charges pay TV subscribers who add the premium channel to their bundle.
An advertising-supported service at US$9.99 will allow HBO Max to stand out as significantly cheaper than Netflix, whose standard price in the United States is US$13.99 per month. Currently, HBO and HBO Max have a combined 44.2 million US subscribers, and parent company AT&T expects both brands to have between 120 million and 150 million subscribers by the end of 2025.
“Whether a customer chooses to buy the ad-supported product or buy the straight subscription product, it is accretive in the same ways to our business,” John Stankey, CEO of AT&T, told CNBC. “Giving consumers the choice of which version of HBO Max they prefer is a strength and by no means an admission of something did not work out the right way. It’s always been the plan,” he added.
WarnerMedia plans to only attach advertisements to programming that is exclusively available on HBO Max, and will not fill all HBO shows with commercials. Furthermore, this AVOD version of HBO Max will not include WarnerMedia’s 2021 slate of feature films on the same day they are released in theaters.