HBO Max Leader Says Price Increase Likely; When Can Customers Expect a Jump?
HBO Max Leader Says Price Increase Likely; When Can Customers Expect a Jump?
The short list of streaming services that have not raised their prices lately may be about to get even shorter. Warner Bros. Discovery held its third quarter earnings call this week, and company streaming chief JB Perrette dropped a hint that the company’s premium streaming service — HBO Max — might see a price increase in the near future.
“By 2023, HBO Max will not have raised price since its launch,” Perrette said. “So it’ll have been three years since pricing has moved, which we think is an opportunity, particularly in this environment.”
If by “environment,” Perrette is referring to the other price increases across the streaming landscape, he’s got a point. Both Hulu and Disney+ will have undergone a price bump by the end of 2022, joining Apple TV+, ESPN+, Netflix, and the live TV streaming services Sling TV, DIRECTV STREAM, fuboTV, and Hulu Live TV as platforms that have gotten more expensive this year.
There are two other factors that will be driving a price increase for HBO Max if it comes. First is the lack of relative success for HBO Max’s cheaper, ad-supported tier. That plan comes in at $9.99 per month, and the ad-free plan is $14.99 per month. WBD Senior Executive Vice President and CFO Gunnar Wiedenfels explained the opportunity the company sees in that.
“We’re frankly a little surprised in the HBO Max ad-light offering that more people have not moved to that offering, and I think it says 2 things which are both positive for us. Number one is we believe there’s actually some pricing advantage for us on the ad-free service that we can probably move north of where the prices are today,” Wiedenfels said.
“Secondarily,” he continued, “that we can drive, particularly as we bring the products together, a lot more adoption of that ad-light tier as we saw with the legacy discovery+ product.”
The two parts of Wiedenfels’s answer provide a hint at just when the price increase is likely to take place. WBD is planning to combine its two streamers HBO Max and discovery+ into a single service sometime in the spring of 2023. Originally, the service was set to debut in summer, but CEO David Zaslav said during the earnings call that the company has been able to speed up its timeline.
“We are excited to announce that we have moved up our U.S. launch date from summer of 2023 to spring. We’ve been very hard at work; we can make the service available to consumers around the globe and get the business running on all cylinders.”
Introducing the price increase when the new, combined service appears makes the most sense. It would be more justifiable to consumers, as the new platform would obviously have more content than is currently available on HBO Max.
Users shouldn’t be surprised if the price increase comes sooner, however. Zaslav has been aggressive in making moves he sees as beneficial to WBD, no matter what public perception of those moves has been. If Zaslav thinks increasing the cost of an HBO Max subscription would do more good if executed more quickly, he would make that move. While it’s most likely to come when the two services combine, a price jump for HBO Max is definitely on the way, and could arrive any day.
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