HBO Max has maintained the same competitive $14.99 per month price since it launched back in May 2020, albeit with an ad-supported tier arriving for $9.99 per month in 2021.
But with the incorporation of Discovery Plus set to go ahead next year, it doesn’t look like the pricing will hold for much longer, with Warner Bros. Discovery (WBD) CEO JB Perrette stating the price “can probably move north” in the near future and that probably means it will be for the combined service of both — HBO Max and Discovery Plus.
The comments came on the company’s quarterly earnings call, and are a reaction to Perrette’s surprise that relatively few people downgraded from the $14.99 offering to the $9.99 version.
“I think it says two things, which are both positive for us,” he told investors. “Number one, we believe there’s actually some pricing advantage for us on the ad-free service, that we can probably move north of where prices are today, and secondarily 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 Plus product.”
For anybody thinking they’d downgrade to the $9.99 version if any price rise is aggressively high, there’s bad news here too. Prepare for more adverts on the cheap tier, as inventory is absorbed from Discovery Plus.
“Today, we have two to three minutes of ads on HBO Max ‘ad-light,’ about half of what we have on Discovery Plus, so as we roll out the new combined products, we have almost 100% growth of new inventory available to us as we look to combine the ads of those two products.”
More content means higher prices (whether you watch it or not)
This ultimately isn’t very surprising. Currently, maintaining an HBO Max and Discovery Plus subscription simultaneously costs somewhere between $11.98 and $24.98 per month (depending on how you mix and match ad-supported versions). It would be odd if the two catalogues were merged and the price remained static.
But it would be fascinating the see how much the viewerships of the two services overlap, and what percentage pays for both. Do HBO Max customers want Discovery Plus shows and vice versa? If not, any kind of price increase is a bitter pill to swallow for programming you’ve got no interest in consuming.
The positive spin here is that more ads and higher prices mean more revenue for WBD, which in turn could mean more investment in the best HBO Max shows like House of the Dragon, Hacks, Barry and other such programmes that don’t exist yet.
But if the recent cancellation of Westworld tells us anything, it’s that nothing is completely safe from the axe if enough people vote with their remotes.