One of the worst kept secrets in the streaming television industry was that AT&T would eventually offer a cheaper, ad-supported version of its HBO Max service sometime this year.
On Wednesday, the company formally unveiled plans for the subsidized service during a presentation in front of prospective advertisers.
The service, which is expected to be called HBO Max with Ads, will offer much of the same content as the commercial-free version of HBO Max — a mixture of HBO’s original programming alongside content from the WarnerMedia library of shows and movies.
HBO Max with Ads will cost $10 a month, a $5 per month discount from the commercial-free version. Executives promised the ad-supported version will have fewer commercial interruptions during programs compared to similar services that subsidize the cost of programming with advertisement breaks.
“HBO Max with Ads will bring our beloved entertainment brands and franchises to even more consumers at this new, lower price point-while, for the first time, elegantly connecting brands to the premium, iconic [intellectual property] that defines this service,” Tony Goncalves, WarnerMedia’s chief revenue executive, said in a press release.
AT&T’s decision to offer an ad-supported version of HBO Max was not unexpected: Rumors began circulating early last year that the company would seek to lower the price of access to HBO as it tried to draw more streamers to the brand and its associated content.
Last September, The Desk reported on plans to offer a limited amount of HBO’s original content library through the ad-supported streamer, with customers being asked to shell out an extra $5 for a commercial-free subscription if they wanted access to newer programming.
Whether those plans are still in place is unknown — WarnerMedia executives didn’t explain if subscribers of the ad-supported streaming service would have fewer program options compared to those who pay for a full subscription to HBO Max.
At the moment, AT&T says HBO and HBO Max have over 40 million paying subscribers combined, a number that is expected to grow as the latter service launches in other countries throughout the year.
The announcement on Wednesday indicates business as usual at WarnerMedia just days after AT&T announced plans to sever itself from its content subsidiary as part of a shift in focus toward its wireless phone and broadband Internet services.
The new media company, which has yet to be named, is expected to be spun off next year, and then immediately acquired by Discovery Communications in a transaction currently valued at around $43 billion.
