How HBO Max Built a Premium Ad-Supported Product, And Their Plan to Reward You For Binge-Watching
Despite the fact that over 60% of customers choose Hulu's ad-supported tier, over the ad-free one, they almost universally despise the ads themselves. Some of the complaints: volume that’s too loud, too many ad breaks, and the frequency of the same ad.
While Hulu has gotten better, bringing ad breaks from 3-4 minutes down to just 90 seconds, its legacy has given ad-supported products a bad rap.
So when people heard that HBO Max would launch a new ad-supported tier, there were plenty of skeptics. At $9.99 a month, HBO Max with Ads, which launched last week, will save customers $5 a month over the ad-free product. You will also forgo offline downloads, 4K video, and same-day theatrical releases.
But unlike ad-supported products in the past, Julian Franco, VP, Product Management HBO Max told The Streamable in an interview, that their “North Star”, was to “create the most delightful ad-supported viewing experience for our customers.”
He said one thing that he believes will separate the HBO Max with Ads experience is that they will “always err on the side of the customer” which for them means to “limit the disruption in stories.”
One way they are doing that is by not including any ads at all in HBO Originals and HBO movies. That means if you want to stream “The Sopranos” or “Wonder Woman: 1984” (which is currently airing on HBO), you can binge away ad-free. Another is by implementing the lowest ad-load in the industry, at just 4 minutes per hour (which takes into account no ads on HBO content), which is a minute less than Peacock and Discovery+, and nearly half that of Hulu and Paramount+.
They are achieving the lower ad-load in a few ways. The first is by selling a “Brand Block,” which includes a bumper and 15-second pre-roll, with a total of 40 seconds of ads throughout a 30-minute show. For a two-hour movie, they could see as little as 60 seconds if it is paired with a “Brand Block.”
While there are ads on Max Originals like “The Flight Attendant,” Franco said that in some cases you could expect to see just two 30 second ad breaks during the show. Another example is “Friends,” which many viewers have been used to seeing in ad-free form, either on Netflix or now on HBO Max. While it traditionally has three ad breaks on broadcast television, on HBO Max it only has two 30-to-60 second ads.
While it is not there at launch, Franco told The Streamable, that they have a feature on their roadmap called a “Binge Reward”, where they will proactively reward bingers with a commercial-free night.
HBO Max vs. Peacock, Paramount+, and Hulu At A Glance
| Service | Price | Ads Per Hour | Simultaneous Streams | 4K Streaming | Offline Mode | Live Sports |
|---|---|---|---|---|---|---|
| Max | $9.99 | 4 min/hr (none during HBO programming) | 3 | No | No | No |
| Peacock | $4.99 (Free for Comcast & Cox Customers) | 5 min/hr | 3 | No | No | Premier League & WWE |
| Paramount Plus | $5.99 | 9-10 min/hr | 3 | No | No | NFL & Champions League |
| Hulu | $5.99 | 9-10 min/hr | 2 | Select shows & movies on certain devices | No | NHL & ESPN+ Upgrade |
Another way they are trying to delight the customer is to find the “best place for an ad break to occur. So obviously not in the middle of dialogue…not in the middle of scenes…and minimal to no ad breaks in the third act because we think (the conclusion) of a movie is best received….without ads.”
But it isn’t just about the quantity or timing of the ads that affect the experience, but the quality as well.
Whether it’s cable or streaming, he said they are trying to do away with the practice of loud, attention-grabbing sound. “A lot of advertisers will just sneak in ads that have louder sound…to get you to look up at the TV…but we’ve spent a lot of time making sure that we level sound between content between content playback.”
They also hope that their ads are just better. “The quality of the advertisers you bring to the product makes a difference.” This is in addition to the fact that they have an in-house creative team to work alongside the brands to make the ads feel more native.
If Netflix has spoiled you from ever wanting ads again, HBO Max is hoping that fewer ads and better ones may help you reconsider. Franco says the key difference when it comes to HBO Max, Customers will notice a difference in “how little they will notice the advertising from a disruptive perspective…and the advertisers that bring that to them.”
HBO Max with Ads is available for $9.99 a month, $5 a month cheaper than the HBO Max Ad-Free plan, which costs $14.99 a month.
The company also has two new plans that offer 16% OFF HBO Max when you pre-pay annually. That means they can get HBO Max with Ads for just $8.49 a month ($99.99 pre-paid annually) or HBO Max without Ads for just $12.49 a month ($149.99).