WarnerMedia is set to launch an ad-supported tier for its HBO Max streaming service this June, and executives are hoping that having a cheaper option will help boost subscriber growth.
AT&T didn’t provide additional information in a press release sent out, including price or exact launch date, but noted that HBO Max will also launch in about 60 markets outside of the US in 2021. Pricing announcements will be made in the coming months, WarnerMedia CEO Jason Kilar told analysts gathered for AT&T’s analyst day. Considering we’re half-way through March, a couple of months is basically launch.
The main difference between the ad-supported tier and the normal plan is access to same-day theatrical releases, Kilar added. Customers on the ad-supported plan won’t be able to watch Dune on HBO Max when it lands, for example. Kilar also confirmed that ads won’t play on HBO original titles like Euphoria, The Sopranos, and Game of Thrones.
An ad-supported plan is just one way to help grow HBO Max’s subscriber base. The expensive pricing tier ($15 a month) might be off-putting to a number of consumers. Kilar recently spoke about the incoming advertisement supported tier at the Goldman Sachs conference, noting that “most people on this planet are not wealthy.”
“And so if we can wake up and use price and be able to kind of invent and do things elegantly through advertising to reduce the price of a service, I think that’s a fantastic thing for fans,” he said, as reported by Variety.
Executives seemingly have a lot of hope that an ad-supported tier will help subscriber count skyrocket. AT&T is raising subscriber targets for both 2021 and 2025, and the company now expects to end 2021 with roughly 67-70 million subscribers worldwide and end 2025 with anywhere between 120 and 125 million subscribers.
That’s a massive increase compared to what executives touted previously — 75 to 90 million — in October. HBO and HBO Max ended 2020 with a combined 41 million subscribers, but with one giant asterisk. Of the 37.7 million cable HBO subscribers, less than half actually activated their free HBO Max upgrade.
Two of the biggest issues impacting HBO Max from the get-go were price and awareness. With the company trying to figure out a better approach to communicating what HBO Max is (and how it differs from HBO), and a cheaper plan soon available, executives are clearly expecting things to pick up. Of course, that’s on top of measures taken to boost subscribers, including dropping new movies in 2021 on HBO Max the same day they’re available in theaters.
Kilar did not comment on other streaming initiatives within WarnerMedia — the industry has speculated CNN could receive a streaming service to tap into a younger viewing base. But he did confirm sports will not be made available on HBO Max this year. Sorry, basketball fans.
Update March 12th, 11:57AMET: The story has been updated to include more information from WarnerMedia CEO Jason Kilar.