AT & T’s T, + 0.62% WarnerMedia plans to price an ad-supported version of its HBO Max streaming service at $ 9.99 a month starting in June, according to a CNBC report on Wednesday. HBO Max currently costs $ 14.99 a month and, at $ 1 more a month than Netflix Inc. NFLX, + 0.19%, it is the most expensive streaming service. A $ 9.99 a month plan would make it more competitive with its Hulu rivals ($ 5.99 with ads, $ 11.99 without ads); AMZN from Amazon.com Inc., + 1.20% Prime Video ($ 12.99 / mo); and DIS from Walt Disney Co., -0.68% Disney + ($ 7.99 per month).
Citing sources familiar with the matter, CNBC reported that the ads would appear only on programming that is exclusive to HBO Max, and the HBO-branded content will not have commercial breaks. However, the ad tier will not include new Warner Bros. movie releases, which will premiere on HBO Max for 31 days from the same day they are released in theaters. That may be less of a problem in the long run, because the movie streaming plan is only scheduled to last until the end of the year; Starting in 2022, Warner Bros. films will reopen exclusively in theaters. Executives at WarnerMedia had scoffed at the launch of an ad-supported tier for HBO Max for months. The cheaper price is expected to attract a wider audience, amid stiff competition from other streaming services. Earlier this month, AT&T reported that global subscriptions to HBO Max increased by 3.3 million in the first quarter, to 63.9 million, above expectations. The company expects 150 million subscribers by 2025, when the service is finally expected to break even. Shares of AT&T are up 7.6% year-to-date compared to the SPX of the S&P 500, an increase of -0.08% to 11.4% this year.