The chief executive of Warner Bros Discovery (WBD) says he feels the company’s cornerstone streaming platform HBO Max is underpriced when compared to the value it brings consumers.
At an industry conference in San Francisco this week, Zaslav said he wants the price of HBO Max to increase over time, and that the company will effectuate small price increases that bring it closer to the actual value it provides.
Historically, HBO and its streaming apps have been priced at $15 per month — but that changed in 2023, shortly after HBO Max hit the market. That year, WBD raised the price of HBO Max’s ad-free plan to $16 per month, a move that was justified by the inclusion of live sports from TNT. Last year, WBD again hiked the price of HBO Max — then called Max — to $17 per month.
“The fact that this is quality — and that’s true across our company, motion picture, TV production and streaming quality — we all we think that gives us a chance to raise prices,” Zaslav said.
Zaslav didn’t say what price he had in mind, though at least one former executive has set a target price of $20 per month for ad-free access to HBO Max.
Implementing a higher price point might be hard for the company to justify if it moves forward with its planned divestiture of its cable networks business. Earlier this month, WBD Chief Financial Officer Gunnar Wiedenfels said the cable business, which will be called Discovery Global, will pull its slate of TNT Sports programming from HBO Max when the separation is complete next year. (Wiedenfels will become the CEO of Discovery Global.)
But a higher price might be a bargain for consumers if the company abandons its plan to spin off the cable networks and takes a serious look at a merger offer that Paramount is reportedly preparing. That deal would bring together a number of assets — assuming it survives regulatory scrutiny in one piece — including CBS Sports and TNT Sports, which would boost the value of Paramount Plus and HBO Max if both services bundle together and maintain their sports offerings.
A cheaper, ad-supported version of HBO Max — which doesn’t include live sports — has maintained its price point of $10 per month since it was introduced. That tier will become more important over time, as WBD pushes freeloaders off its platform and demand they sign up for their own plan.
Right now, WBD doesn’t feel it is in a position to implement a password-sharing crackdown as aggressively as its peers like Netflix and Disney Plus.
“We haven’t been pushing on the password sharing and the economics yet,” Zaslav said, adding that the company is still working to develop content-driven relationships with TV and film fans who might be watching their content without paying before they ask them to convert into a customer.
“People are really starting to love HBO Max. That’s the key,” he affirmed. “We want them to fall in love with our content, with our series, with the differentiated offering outside the U.S.”
—
Read more:
