Following the platform’s merger with Discovery Plus in 2023, HBO Max subscription prices will almost certainly head “north,” WBD CEO JB Perrette has confirmed. Additionally, the ad load on its cheaper, ad-supported subscription tier could potentially double.
The revelations were made during WBD’s recent Q3 earnings call (opens in new tab) with Wall Street analysts, and came after the company reported lower-than-expectation results. Between July and September this year, the WBD direct-to-consumer portfolio – which includes HBO, HBO Max and Discovery Plus – added just 2.8 million new subscribers. The company’s global subscriber total now stands at just shy of 95 million – some 57 million behind Disney Plus (152 million) and a whopping 128 million behind Netflix (223 million).
Evidently, WBD executives are planning to respond to the slowdown by putting a premium price tag on the company’s still-unnamed super streamer, which is due to launch between March and June next year.
More content, higher price
The standard tier of HBO Max currently costs $15 per month, a price that has remained static since the platform’s launch in May 2020. The ad-supported tier of HBO Max – which debuted in June 2021 – costs $9.99 per month.
It’s not clear whether Perrette’s allusion to prices heading “north” refers to both the standard and ad-supported tiers of HBO Max. However, since the amount of content offered by both versions of the streamer is likely to increase following the creation of WBD’s super streamer, it’s almost certain that prices will be hiked across the board.
That’s Perrette’s justification for the impending increases, anyway. Speaking to Wall Street analysts, the WBD CEO noted that the blending of HBO Max with Discovery Plus will create a streaming product that’s suitable for entire households, rather than just individual users.
This sentiment chimes with what we’ve heard Perrette claim previously about WBD’s in-development new streamer. Speaking in August 2022, the CEO confirmed that the service in question will bring the extensive portfolios of WarnerMedia and Discovery Inc. under one streaming roof to provide “something for everyone”. At present, WBD’s network offering includes HBO, CNN, DC Comics, Discovery Channel, Food Network, HGTV, Magnolia Network, OWN, TBS and TNT.
Explaining how the new streamer will prove greater than the sum of its parts, Perrette has also said: “HBO Max has a competitive feature set, but has had performance and customer issues. Discovery Plus has best-in-class performance and consumer ratings, but more limited features. Our combined service will focus on delivering the best of both.”
Clearly, then, WBD sees its new streamer as a more valuable offering than HBO Max and Discovery Plus as standalone products – and subscribers will be expected to pay for that superior value.
Touching on the subject of ads, Perrette also noted, during the company’s recent earnings call: “Today, we have two to three minutes of ads on HBO Max ‘ad-light,’ about half of what we have on Discovery Plus, so as we roll out the new combined products, we have almost 100% growth of new inventory available to us as we look to combine the ads of those two products.”
In other words, the ad-supported tier of HBO Max – in whatever guise it appears following the merger with Discovery Plus – is getting more ads. Of course, this tier is likely to remain significantly cheaper than the ad-free version of the new streamer, but that won’t come as much relief to the millions of subscribers who are already signed up for the cheaper tier of HBO Max.