June 2, 2021
Hitting an "early June" launch target, the ad-supported form of HBO Max launched Wednesday at $9.99 per month, $5 less than the original ad-free version that debuted just over a year ago.
The ad-supported version of HBO Max debuts with a maximum of four minutes of commercial time per hour, and no ads will appear during HBO original programming. HBO Max, which has more than 35 brands on board for advertising in June, claims its cap of four minutes of ad time per hour is "the lowest commercial ad load in the streaming industry." According to Bloomberg, HBO Max's ad cap does come in just below the five minutes of ads per hour or less of ad-supported tiers of Discovery+ and NBCUniversal's Peacock.
Figure 1: The ad-supported form of HBO Max will offer a set of options for advertisers, including the ability to deliver a commercial message when users pause their streams.
(Image source: WarnerMedia)
HBO Max will offer a range of advertising formats and options. In addition to offering a "Brand Block" that lets advertisers "own a block of content" on the streaming service, WarnerMedia also plans to market a "Pause Ads" option that allows an advertising message to appear when viewers pause their stream. Also in the works is a "Branded Discovery" option that will allow advertisers to be integrated with the service as users search for HBO Max content.
The ad-free and ad-supported forms of WarnerMedia's HBO Max service include a catalog of content from properties such as HBO, Warner Bros., DC, Turner Classic Movies and Cartoon Network.
However, the ad-supported offering will snip some of the features and capabilities that are available on the more expensive ad-free version of HBO Max. For example, HBO Max with ads does not allow downloads for offline viewing and limits streaming video quality to 1080p (some HBO Max titles are available in 4K/HDR format). HBO Max with ads also does not include the slate of 2021 films from Warner Bros. that are debuting simultaneously in theaters and on HBO Max's ad-free service. However, the ad-supported and ad-free HBO Max services will offer those new Warner Bros. movies when they hit the more traditional HBO premium TV release window.
WarnerMedia hopes the ad-supported offering will pump subscriber numbers for HBO Max and reach into a portion of the market that does not want to pony up almost $15 per month for the ad-free version. AT&T-owned WarnerMedia ended Q1 2021 with 44.2 million HBO Max and HBO subs in the US, and plans to launch HBO Max in 60 international markets by the end of 2021. AT&T expects to have 120 million to 150 million HBO Max subs (a number that includes both ad-free and ad-supported subs) by the end of 2025.
To spur more signups and keep churn in check during this period, HBO Max is offering new and returning subs the option to save 15% if they buy HBO Max with ads for $99.99 per year or ad-free for $149.99 per year.
HBO Max with ads enters the picture amid a proposed deal that will see AT&T merge its WarnerMedia division with Discovery. The intended result will be a new publicly traded company to be called Warner Bros. Discovery and to be led by current Discovery CEO David Zaslav.
HBO Max with ads to debut in early June, cost $9.99/month HBO Max heads south, adds mobile option AT&T exits content big time in tie-up with Discovery HBO Max base expands as AT&T's pay-TV totals fall again — Jeff Baumgartner, Senior Editor, Light Reading
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