HBO Max With Ads Will Cost $9.99 a Month, WarnerMedia Says

By Joe Flint 

It's not HBO. It's HBO with commercials.

The ad-supported version of the streaming service HBO Max will launch in early June and cost $9.99 per month, a $5 discount from the $14.99 ad-free version of the service, AT&T Inc.'s WarnerMedia said.

HBO Max is essentially a supersize version of HBO with its own slate of original programming and access to classic TV shows and movies, as well as 2021 Warner Bros. films the day they hit theaters. There is no additional charge to HBO subscribers to sign-up for HBO Max, which launched about a year ago.

WarnerMedia had previously promised to roll out a lower-priced version with ads, as the company competes with Netflix Inc., Walt Disney Co. and others that offer lower monthly prices and have signed up tens of millions of customers.

WarnerMedia executives unveiled the details to advertisers Wednesday during a presentation touting the company's various platforms. The ad load will be the lightest of any streaming service, said JP Colaco, WarnerMedia's head of ad sales.

The event took place two days after parent AT&T struck a deal with programming giant Discovery Inc. to combine their media assets into a new publicly held company. The news, coming less than three years after AT&T acquired WarnerMedia and overhauled the company, sent shock waves through the company and the industry.

Jason Kilar, the current chief executive of WarnerMedia, broke his silence on the deal at the Wednesday event. Appearing in a taped segment at the start of the program, Mr. Kilar said of the deal, "Together, we will form a new company -- and superserve our advertisers, with a promise to unite our beloved brands with Discovery's incredible brands under one banner."

He declined to elaborate on his personal plans, saying that for the moment it is business as usual.

Mr. Kilar and most of senior WarnerMedia management was left out of the loop on the talks and only learned of the deal shortly before it was unveiled, people familiar with the matter said.

People inside WarnerMedia and AT&T have indicated that it is likely that Mr. Kilar will leave the company and not be part of the new management team that will be put together by Discovery Chief Executive David Zaslav.

Mr. Kilar has declined to respond to requests for comment. People familiar with his thinking said for now he is trying to focus on his job at WarnerMedia. He has made supportive remarks to the company about its future in meetings with executives and staff as well as emails.

With the ad-supported version of HBO Max, WarnerMedia's hope is that the lower price and light ad loads will convince consumers to sign-up. WarnerMedia hasn't disclosed how many customers HBO Max currently has, only that combined with HBO there are 44.2 million U.S. subscribers.

While HBO Max content such as original movies and TV shows as well as library content will have commercials, content that is exclusive to HBO will remain ad free. That includes not only original programming such as "Succession" and "Last Week Tonight with John Oliver" but also the theatrical films HBO licenses from movie studios. Older HBO content such as "The Sopranos" and "Game of Thrones" also won't have ads.

Write to Joe Flint at [e-mail]

(END) Dow Jones Newswires

May 19, 2021 14:36 ET (18:36 GMT)

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