WarnerMedia is ready to launch a level of advertising for its streaming service HBO Max in June, and executives hope a cheaper option will help drive subscriber growth.
AT&T did not provide additional information in a press release sent, including price or exact release date, but noted that HBO Max will also launch in around 60 markets outside the US in 2021. WarnerMedia CEO Jason Kilar spoke recently about the announcement received level supported at the Goldman Sachs conference, noting that “most people on this planet are not rich”.
“And if we can wake up and use the price and be able to invent and do things elegantly through advertising to lower the price of a service, I think that’s fantastic for fans,” he said, as reported by Variety.
Executives seem to have high hopes that an ad-supported tier will help subscriber counts skyrocket. AT&T is raising its subscriber targets for 2021 and 2025, and the company now expects to end 2021 with around 67-70 million subscribers worldwide and end 2025 with somewhere between 120 and 125 million subscribers.
This is a huge increase compared to what executives previously proclaimed – 75 million to 90 million – in October. HBO and HBO Max ended 2020 with 41 million combined subscribers, but with a giant asterisk. Of the 37.7 million HBO cable subscribers, less than half activated their free HBO Max update.
Two of the biggest problems that have affected HBO Max since the beginning 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 available soon, executives are clearly hoping things will get better. Of course, this adds to the measures taken to increase the number of subscribers, including releasing new films in 2021 on HBO Max the same day they will be available in theaters.
The real question now is whether people in the ad-supported tier will have to watch HBO’s original ad programming. For anyone who has never watched a syndicated HBO show on a different network, it is certainly a strange experience. Kilar is expected to announce more information about the plans during today’s event for AT&T investors and analysts.