It seems ever more certain that HBO Max will add a lower-cost tier that includes commercials. While it would seem like this is a first for the premium service, it’s really not that novel. HBO isn’t the first to do it, and the truth is they’ve been doing it for years if you look at it the right way.
Why do this at all?
AT&T has been all about considating its media properties as quickly as they acquired them. The big purchase came with the acquisition of Warner Media, the company that boasts HBO, CNN, DC Comics, TBS, TNT, Bugs Bunny, and several other media properties. Warner had been watching Disney, its largest competitor, leverage its properties for years. Now, with AT&T’s cash, they were able to realize that dream.
When HBO Max launched as an outgrowth of the old HBO NOW app, the goal was to create a portal where all the Warner Media content could live. This wasn’t terribly different from what Comcast would do with Peacock, or what Disney did with its Disney+/Hulu bundles. However, AT&T took what could be considered the “high road” — the high-priced road, at the very least. They offered HBO Max as one of the most expensive mainstream streaming services ever. And it’s been a success. But it’s been out of reach for many people.
Compare the prices
Disney+ comes in at a neat $8 a month. However, if you want to upgrade to the full ad-free tier of Disney+/Hulu (ad-free)/ESPN+ (ad-free) you’ll pay $20 a month, which is more than HBO Max. Admittedly you do get sports content there.
On the other side, Comcast offers Peacock for free if you’re willing to live with ads. You don’t get all the content out there, though. To get Peacock Premium ad-free, you’ll pay $10 a month. That’s less than HBO Max, but Peacock has a lot less content. They do have The Office, though and that’s a big draw.
HBO Max’s two natural competitors both have low-priced tiers. As I write this, HBO Max does not. They’ve recently announced that they will launch an advertiser-supported version of the service for $9.99 a month in June. This puts them a little higher than the competition, but you’re getting a lot of premium content there.
HBO Max already has ads… sort of
OK, that’s a little bit of a misleading statement. What I really mean to say is that there’s already a way to watch a lot of HBO Max content with ads. You’ll find a lot of that content on TNT and TBS if you have cable or satellite. You might not get the profanity-laden programming, but a lot of the recent movies are there.
This model has worked so far, but it’s only been an option for those with some sort of live TV package. By introducing an ad-supported tier to HBO Max directly, more people can enjoy the full spectrum of programming on HBO, even the stuff with swear words.
Will you go ad-supported?
Of course, the decision isn’t just about money. It’s also about just how many commercials you get. Broadcast, cable, and satellite content has an amazing 16-22 minutes per hour of commercials. That’s a lot, especially if you can’t skip it. Pluto, a free live streaming service, has about the same amount on some of their content. On the other hand, Hulu’s ad-supported tier tends to give you about 12 minutes of commercials per hour which is a bit more palatable. I’d expect about the same from HBO Max, although I don’t know for sure. We’ll just have to see together.
HBO runs the risk that some of their existing subscribers will drop down to the advertiser-supported tier, and that the increased revenue from new subscribers won’t make up for that. I’d say that’s a fairly small risk, though. I think a lot of people will relish the opportunity to finally see what the whole Game of Thrones thing was all about, or to see this Snyder Cut everyone’s gabbing about.
I’m going to stay with the full version of HBO Max, since I get it as part of my DIRECTV subscription anyway. What about you?
