HBO Max currently costs $14.99 a month and, at $1 more a month than Netflix Inc.
is the most expensive streaming service. A $9.99-a-month plan would make it more competitive with rivals Hulu ($5.99 with ads, $11.99 with no ads); Amazon.com Inc.’s
Prime Video ($12.99 a month); and Walt Disney Co.’s
Disney+ ($7.99 a month).
Citing sources familiar with the matter, CNBC reported ads would appear only in programming that’s exclusive to HBO Max, and HBO-branded content will not have commercial breaks. The ad-supported tier, however, will not include new releases of Warner Bros. movies, which are premiering on HBO Max for 31 days starting the same day they open in theaters. That may be less of an issue long-term, because the movie-streaming plan is only scheduled to last until the end of the year; starting in 2022, Warner Bros. movies will go back to opening exclusively in theaters.
The launch of an ad-supported tier for HBO Max had been teased by WarnerMedia executives for months. It’s hoped that the cheaper price tag will attract a wider audience, amid tough competition from other streaming services.
Earlier this month, AT&T reported global HBO Max subscriptions grew by 3.3 million in the first quarter, to 63.9 million — above expectations. The company expects 150 million subscribers by 2025, when the service is finally expected to break even.
AT&T shares are up 7.6% year to date, compared to the S&P 500’s
11.4% gain this year.