HBO Max’s ad-supported tier debuted today, boasting the “lowest commercial ad load in the streaming market.” The company announced that the $10-per-month tier (a savings from the $15 pricing of the ad-free version) is now available.
During a presentation to media buyers last month, WarnerMedia stated that HBO Max with Ads would go online in early June, but no specific date was given. The cheaper tier has been considered internally as a subscription stimulant, with a maximum of 4 minutes per hour of advertisements — and none during HBO programming.
Peacock and Discovery+ from NBCUniversal are also in the same neighborhood. Discovery stated that it settled on 4 minutes each hour after originally planned for five. AT&T announced last month it will spin off WarnerMedia into a combined entity with Discovery, in a deal expected to close in mid-2022.
The addition of an ad-supported tier after an ad-free one was already available is a departure from the path pursued by services such as Hulu and CBS All Access. The move is similar to that of early cable TV networks such as AMC, Bravo, and MTV, which began ad-free before gradually adding sponsor time as they grew. The dual revenue stream of subscriptions and advertising has long been a feature of the pay-TV industry, and media corporations see an opportunity to reproduce it in streaming without sharing as much with distributors in a direct-to-consumer approach.
So how is this not exactly like cable, but with bundles? With no advertising, Netflix, Amazon Prime Video, and Disney+ command a commanding lead in the streaming market. Not everyone was impressed.
Cable. It becomes cable.
— Kneon (@Kneon) June 4, 2021