HBO Max is finally launching its ad-supported tier, and it’s coming at a higher price for consumers.
At its virtual upfronts presentation on Wednesday, parent WarnerMedia said the service will charge $9.99 per month for the ad-supported version of the product, which will launch the first week of June. HBO Max’s ad-free subscription tier is $14.99 per month.
The price tag is a hefty one for consumers who will still see ads during their watch time, and is much higher than other players in the industry. NBCUniversal’s Peacock, for example, offers a free ad-supported tier and an ad-light tier at $4.99 with more content, in addition to its $10 per month ad-free tier. Hulu’s ad-supported tier is $5.99 per month, and its ad-free tier is $11.99 per month.
The ad-supported service is launching with “most major agency holding companies” and a wide variety of brands on board, said JP Colaco, head of advertising sales for WarnerMedia.
The platform will also release three new ad formats: pause ads, branded discovery ads, which show up natively as people search for programming, and brand blocks, which allow brands to own a block of content with a limited commercial experience.
“HBO Max is setting just as high a bar on quality for advertising as content,”
Colaco said. “We’re committed to having the lightest ad load in the streaming industry coupled with the most premium content.”
The service also touted its new original programming, including a “Gossip Girl” reboot with a more diverse cast and a long-anticipated “Friends” reunion that was delayed last year due to the pandemic.
“Our plan is to not only welcome a large number of consumers to our service, but also deliver the most brand safe, elegant experience for advertisers that exists across all of TV,” said WarnerMedia CEO Jason Kilar, who touched on the recent Discovery merger in his upfront remarks but did not go into details.
WarnerMedia boasted to ad buyers that it reaches 85% of U.S. adults across its portfolio, which includes TBS, TNT, truTV, CNN, Turner Sports, Bleacher Report, Cartoon Network, Adult Swim and HBO Max.
To highlight programming on TNT and TBS, WarnerMedia engaged viewers by placing the networks’ GM Brett Weitz on the train from TNT’s hit drama “Snowpiercer.” He runs into the network’s stars including Samantha Bee, John Cena and David Diggs, who remain in character while he spits facts such as TNT and TBS being the No. 1 and No. 2 U.S. cable networks.
To highlight its reach in sports, WarnerMedia brought viewers to the “Inside the NBA” desk with Charles Barkley and Shaquille O'Neal, who focused on sports’ cultural and social impact over the past year. The network also highlighted CNN’s news reporting and original content, such as “Searching for Italy” with Stanley Tucci.
The company is leaning heavily on its IP to attract brands, claiming that advertiser content that leverages WarnerMedia talent and characters are 20% more effective at driving sales than traditional creative. WarnerMedia’s virtual Fandome event, which brought together all of the characters in the DC Comics universe, reached 22 million viewers across 220 countries and included custom integrations for State Farm, Chevrolet and Lego.
“Our shows create massive fan communities that congregate virtually and in real life,” Colaco said. “[We can] partner with you on epic custom programs and events that galvanize fans, elevating brands to new heights and achieving outcomes.”
WarnerMedia is also still committed to its addressable TV initiatives, despite being spun out from AT&T, and will reach 52 million households with addressable ads by the end of the year.