HBO Max/Discovery+ combo service gets earlier launch date, price hike expected

After Warner Bros. Discovery reported its third quarter earnings results yesterday, the company told investors and analysts on a call that the upcoming combined HBO Max/Discovery+ streaming service will now launch in the US earlier than announced in advance. CEO David Zaslav said the yet-to-be-named service will launch in the spring of 2023 instead of the summer.

After its debut in the United States, the service will roll out to Latin America and then Europe in 2024. While the company hasn’t yet announced how much the service will cost or what it will be called, it will receive an advertising-free and advertising plan.

In addition, HBO Max’s ad-free plan may receive a price increase next year, the company noted on yesterday’s call.

“By 2023, HBO Max will have had no price increases since launch. So, it will be three years since the price change. Which we think is an opportunity, especially in this environment,” said JB Perrette, President and CEO of Global Streaming and Games.

The $14.99/month cost of HBO Max’s ad-free plan hasn’t budged since launch in 2020. As more streaming services increase their prices for subscribers, HBO Max is likely to join the trend. And while many subscribers won’t be happy with the price hike, it also makes sense for the streamer. With HBO Max merging with Discovery+, the higher price seems justified because subscribers will get twice as much content.

Another reason for the potential price increase is that not enough subscribers are opting for HBO Max’s ad-supported $9.99/month tier, which started last year.

“We were honestly a little surprised with the HBO Max ad-lite offering that more people haven’t switched to that offering… We believe there’s actually some cost advantage for us in the ad-free service and we can probably move north of where where prices are today,” Perrette added.

Separately, Zaslav mentioned that the company is still “aggressively attacking the AVOD market with our own FAST offering in 2023.” WBD stated last quarter that it is exploring a free ad-supported TV streaming service (FAST). “As a company with the largest film and television library in the industry, we have a unique opportunity to grow our addressable market and drive real value, and we plan to act quickly,” he said yesterday.

WBD’s future FAST offering will join other FAST services owned by media companies, such as NBCUniversal’s Peacock, Paramount’s Pluto TV, Fox’s Tubi and Comcast’s Xumo.

The company reported a net addition of 2.8 million global subscribers across HBO, HBO Max and Discovery+ in the third quarter, bringing the total to 94.9 million. Only 500,000 domestic subscribers have been added.

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