HBO Max may have ads in its future, as WarnerMedia executives John Stankey and Jason Kilar are still considering introducing an ad-supported version of the streaming platform. HBO Max, like many other streaming platforms, has had a less than successful launch but has still managed to create a space for itself in the market. The platform has also been a helpful consolidation tool for WarnerMedia, allowing them to house their separate properties like DC Universe in the same place as their popular HBO content.
HBO Max has also made headlines recently thanks to its involvement in “covid-safe” film releases. After suffering several release date delays, the upcoming Wonder Woman 1984 film was given a home on HBO Max and will debut there in addition to its theatrical release. WarnerMedia seems so confident in this strategy that they plan to release all of their 2021 movies in this format, including huge blockbusters like Dune, The Matrix 4, and The Suicide Squad. Warner is channeling all of their energy and resources into HBO Max, and with all their eggs in one basket, the company is looking for ways more.
According to an in-depth report from CNBC, WarnerMedia is looking for a way to make more money off of their streaming platform. John Stankey, the CEO of AT&T (the parent company of WarnerMedia), is reportedly still considering adding an add-supported option to HBO Max to attract more users. HBO Max currently has a flat rate cost of $14.99 a month, the same price as HBO standard. Supposedly, an ad-supported option would have a lower monthly cost in exchange for ad breaks throughout TV episodes and movies.
While this may seem like a practical strategy (Hulu uses a similar format), former HBO executives have gone on record speaking against this plan. Former HBO CEO Richard Plepler proposed a directly opposite strategy in 2018, but after several conflicts with Stankey, he eventually left the company in 2019. Executives have also had similar disputes with WarnerMedia CEO Jason Kilar. One exec states, “If HBO stood for anything, it was making a product for the customer, not the advertiser. It’s not as though John is unpleasant. He doesn’t throw stuff. He just knows much less about television than he thinks and won’t be debated.”
It may seem after looking at this story that there is a clear-cut answer for how HBO Max should approach this issue. The problem is that there is no perfect streaming platform to compare to. TV journalists like to talk about media execs suffering from “Netflix envy,” but even Netflix spends almost $1 billion more than they make each year. What Stankey and Kilar need to succeed is not a profitable strategy but a consistent one. If they plan to include ads in HBO Max, it better be a decision they’re willing to stick with.
Source: CNBC