Hot on the heels of AT&T announcing HBO Max will be spun off alongside Warner Bros to form a new company with Discovery, the telecommunications giant announced this week it will also begin offering a cheaper version of the streaming service. HBO Max with Ads will officially launch on June 1st with a price tag of $9.99 per month. That represents a $5 discount from the current plan, but it also comes with some tradeoffs.
The first major tradeoff is right there in the name. Unlike the full version of HBO Max, the new offering will require users to watch ads. According to Next TV, the company is promising the lightest ad load among the major streaming services, as well as new ad formats and additional innovations to come. Advertisers have already committed $80M to the project, though it’s hard to know what that will look like from the consumer perspective.
The second major tradeoff is users of the HBO Max with Ads plan will not get access to the new release Warner Bros movies that are streaming on the same day they hit theaters. That’s, of course, a major con to this version initially, but long-term, it’s probably not a huge problem as it seems likely the service will discontinue that method of releasing movies in 2022. For the next seven months, however, it should be a major consideration in deciding which tier to choose.
Of course cheaper ad-supported versions of major streaming services are relatively common at this point. Hulu and the more recently launched Peacock both have premium versions and also offer users savings if they’re willing to watch ads, and there are also many free services that run entirely off ads including Plex. Because of that, this new offering feels like a pretty standard next step in the streaming service playbook.
That being said, right now all HBO Max strategies and initiatives should probably be considered under review. When AT&T’s entertainment properties spin off and merge with Discovery, the new venture will be led by current Discovery CEO David Zaslav and not by Jason Killar, who has been making the decisions for Warner Bros and is reportedly negotiating an exit package. There is going to be a lot of work to do in figuring out how to fit HBO Max, Discovery Plus, Warner Bros, CNN, TNT, HGTV, Food Network and way more together. Because of that, it’s certainly possible that we may see major changes when it comes to price, offerings, etc.
For the time being, however, it’s nice to see customers have options. Not everyone wants new release movies, and for a lot of people, saving $5 a month or $60 a year is worth watching some ads, especially if, as AT&T claims, it’ll be the lightest ad experience in the game.