As a streaming offshoot for the biggest premium cable network on TV, HBO Max immediately entered the streaming world with digital guns blazing. Still not yet a year old, the entertainment platform has a long way to go before it taps into the sizable customer bases that Netflix and Disney+ enjoy, and the powers that be are aiming to draw in more subscribers with a new commercial-supported subscription plan. A strange idea, perhaps, considering audiences usually try to get away from ads, but there's a key reason for its implementation.
Speaking with journalists as part of the Morgan Stanley Technology, Media & Telecom Conference (via TheWrap), HBO Max CEO Jason Kilar spoke excitedly about rolling out the commercial-laced plan as a new option for customers to utilize. And his big reasoning for unleashing it is because he understands that HBO Max's standard $14.99 plan isn't cost-effective for audiences en masse when other ad-free platforms out there are cheaper. In his words:
It turns out that most people on this planet are not wealthy. If we can wake up and use price and be able to invent and do things elegantly through advertising to reduce the price of a service, I think that’s a fantastic thing for fans. And I do think once they see it — because I’ve seen the service in the terms of the designs that we’ve come up with — I think people are going to be so excited about how we’ve been so thoughtful about the insertion of advertising and how it’s a very organic nature of the experience.
To be sure, this notion isn't exactly revolutionary. Other streaming services like Hulu and Peacock already have multi-tiered plans that accommodate for those who want to pay more to avoid commercials, and those who aren't able to. But even though HBO Max didn't implement cheaper options from the start, the company does deserve some credit for taking the applicable data into account and acting on it. After all, Warner Bros. is likely banking hard on all of its 2021 feature releases and high-profile TV projects (and the long-awaited Zack Snyder's Justice League, of course) bringing a lot of new eyeballs to HBO Max, and it'll help if the monthly subscription costs less than a ticket to the movie theater.
While it's presumably not the easiest task to try and sway millions of cord-cutters to choose a streaming plan that is supported by the very commercials they wanted to avoid on linear TV, CEO Jason Kilar makes it sound like HBO Max is looking to make its advertising stand out and be more organic to the streaming experience. Of course, it's hard to predict what he meant by saying "the designs" that they crafted, and just how truly "thoughtful" its ad approach will be. Could it be innovative enough to not only bring in new costumers, but also convince full-plan customers to switch to the ad-supported option? I'm sure Kilar and his co-execs will be paying close attention.
Unfortunately, while we did get to hear the CEO's justification for the new plan, no actual price details were discussed, and no specific launch date was revealed. It's expected for the update to go into effect in the second quarter of 2021, but more details will no doubt follow soon.
During his updates, Jason Kilar shared his speculations that the average family will end up having around 6 or 7 different streaming services, if not less, and that he thinks HBO Max is perfectly primed to be one of those services. At the end of 2021, the combined customer base for HBO and HBO Max surpassed 41 million, which is ahead of the company's expectations. But time will tell if this new ad-supported plan can add more subscribers to that total. Come for the ads, stay for Godzilla Vs. Kong and the Clone High reboot.
