HBO Max With Ads launches, promising ‘lowest commercial ad load’ in streaming – Deadline

HBO Max’s long-awaited, ad-supported WarnerMedia tier officially launches today, promising “the lowest commercial ad load in the streaming industry.”

The company said the $ 10 per month tier (a notable discount from the industry’s $ 15 price for the ad-free version) will be “rolled out throughout the day.” During its initial presentation to media buyers last month, WarnerMedia said that HBO Max with Ads would go live in early June, but it did not specify a date.

With a maximum of four minutes per hour of ads – and none during HBO programming – the cheapest tier was seen internally as a key stimulus for subscriptions. NBCUniversal’s Peacock and Discovery + are also in the same neighborhood. Discovery said it ended up with 4 minutes per hour of announcements after initially planning five.

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An exception for subscribers at the cheapest tier is access to day-and-date releases of Warner Bros. movies like the Upcoming. Space jam and Matrix suites. These films can only be viewed on opening day by ad-free subscribers, although the ad-supported tier will get them in later release windows.

HBO Max and HBO Regular together had 44.2 million subscribers as of March 31, most of them still linear. Earlier this year, WarnerMedia raised its projections to 120 million to 150 million subscribers globally by 2025, saying the one-year-old service was ahead of initial forecasts. Its expansion to dozens of territories outside the United States also begins this month. HBO Max’s first few months have been bumpy, in part because of the coronavirus pandemic, but also because of a whirlwind of legacy branding and distribution issues and managerial and organizational upheavals.

AT&T announced last month that it will split WarnerMedia into a combined entity with Discovery, in an agreement expected to be reached in mid-2022.

Introducing an ad-supported tier after an ad-free tier was already in the market is a reversal of the path taken by services like Hulu and CBS All Access. The move is somewhat analogous to early cable TV networks including AMC, Bravo, and MTV, which started ad-free before adding sponsor time as they grew. The dual stream of revenue from subscriptions and advertising has been a hallmark of the pay-TV industry, and media companies see a chance to replicate it in streaming, without sharing as much with distributors in a direct-to-consumer model. consumers.

Netflix, Amazon Prime Video, and Disney + enjoy a huge lead in the ad-free streaming market, but a host of ad-supported streaming services have flourished in recent years, especially as the penetration of smart TV and the use of connected television have increased.

“Advertising is a proven way to lower the cost of great entertainment and reach larger audiences,” said Andy Forssell, executive vice president and general manager of HBO Max. “We’ve worked hard to create an elegant and tasteful ad experience that respects good storytelling for the users who choose it, and which we are confident will be available to our ad partners as well. “

Ads on HBO Max, the company said, are “designed to complement and enhance the overall viewing experience and will be thoughtfully presented in the HBO Max content catalog in a manner that maintains the integrity of the programming.”

Over 35 brands across all major categories are expected to upload to HBO Max this month.

WarnerMedia Ad Sales Director JP Colcaco said the new level of HBO Max is an “innovative, best-in-class streaming ad experience” focused on personalization. “Together with our valued partners, we will continue to explore the art of what is possible in video advertising on all platforms,” he added.

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