WarnerMedia CEO on HBO Max’s Upcoming Ad-Supported Option: ‘Most People…Are Not Wealthy’

HBO Max with commercials is expected to launch in the second quarter of 2021

Last Updated: March 4, 2021 @ 6:48 AM

WarnerMedia CEO Jason Kilar makes a darn good living (as the chief executive of the AT&T subsidiary, his compensation is not public), but he knows not everyone is in the same income bracket. That’s why he’s so excited about HBO Max’s upcoming ad-supported option, which will cut the commercial-free service’s relatively expensive price tag.

We do not yet have the cost structure — or an exact launch date — for the ad-supported HBO Max option, which is supposed to roll out in the second quarter of 2021.

“It turns out that most people on this planet are not wealthy,” Kilar said Thursday morning during the Morgan Stanley Technology, Media & Telecom Conference. “If we can wake up and use price and be able to invent and do things elegantly through advertising to reduce the price of a service, I think that’s a fantastic thing for fans. And I do think once they see it — because I’ve seen the service in the terms of the designs that we’ve come up with — I think people are going to be so excited about how we’ve been so thoughtful about the insertion of advertising and how it’s a very organic nature of the experience.”

Later, Kilar said he believes the typical household will have “less than seven” streaming services in the end, and “maybe even less than six.”

“I feel very good about our ability to be in that small group,” he added.

HBO and HBO Max combined for 41.5 million subscribers at the end of 2020. That is two years ahead of WarnerMedia’s publicly shared schedule.

HBO Max’s ad-supported option, which is expected to come this year, has not yet launched. A commercial-free HBO Max, which is more like traditional HBO and its earlier streaming options, costs $14.99 per month.

Among the other majors, Netflix costs $13.99 per month and Disney+ is a bargain (but is mostly for kids) at $6.99 per month. Neither of those have ads.

CBS All Access rebranded as Paramount+ on Thursday, it has both ad-supported and ad-free options. As does NBCUniversal’s streaming service Peacock, though that one also has a limited free offering. With commercials, Peacock Premium runs $4.99 per month. Ad-free it’s $9.99 per month. Paramount+ carries the same price points.

Amazon Prime Video is included with an Amazon Prime account, which costs $12.99 per month but also includes free two-day shipping on all Amazon.com retail purchases.

Hulu as a standalone service (it can also be bundled with Disney+ and ESPN+) costs $5.99 per month with ads or $11.99 per month. Discovery+ costs $4.99 per month with ads or $6.99 per month without.

Kilar was the original Hulu CEO. He took over WarnerMedia during the early stages of the (U.S.) coronavirus pandemic.