HBO Max has reportedly solidified both a release date and a price point for its new ad-supported version of the product, with the company planning to charge $9.99 a month and launch in June.
CNBC reported the news, based on information from sources at the streaming company. HBO Max, which has over 44 million subscribers so far, is looking to compete on a stronger platform with Netflix, which is ad-free but charges $13.99 a month, one dollar less than HBO Max’s current ad-free service (HBO Max costs the same as the HBO cable service itself, as purchasing the HBO cable package gives you access to HBO Max at no additional cost).
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HBO is aiming at somewhere between 125 and 150 million subscribers by the end of 2025. Offering a lower-priced alternative to the main service is a main aspect of that goal. The ads will only run on HBO Max original material. The service will not be going back into older HBO shows and adding ads to that content. Initially, HBO considered offering up only the original HBO Max content for $4.99 a month, but decided against that route.
One of the big differences between the two services, though, is that people who purchase the ad-supported version will not be able to access the Warner Bros. movie releases that HBO Max will simultaneously debut on HBO Max for the rest of the year, like Mortal Kombat and Kong vs. Godzilla (and upcoming films like In The Heights and The Suicide Squad).
This new set-up, though, is a concern for Pay-TV distributors that offer HBO Max along with the regular HBO service. Those cable companies get a percentage of revenue from the people that subscribe to HBO Max on its services, so this would be a cut to the revenue of these cable channels (Comcast reportedly receives the majority of the $14.99 that users pay to access HBO Max on the cable service). However, HBO Max plans to offer these companies ad inventory to appease them. HBO plans that each customer will still generate $14.99 in revenue through the subscription fee and the ad fees.
Reportedly, one of the delays in securing deals with Amazon and Roku for HBO Max to run on Firesticks and Roku boxes was clearly the way for a future ad-supported service that neither Amazon nor Roku would object to in the future.
Source: CNBC
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