What's happened
HBO Max is increasing subscription prices across all tiers, citing quality and underpricing. The ad-supported plan rises $1 to $10.99/month, with other tiers seeing larger hikes. The changes are immediate for new customers, with existing subscribers affected from November 20. The move aligns with industry-wide price increases.
What's behind the headline?
Strategic Price Adjustment
Warner Bros. Discovery’s decision to raise HBO Max prices reflects a broader industry trend of streaming services seeking profitability after years of aggressive subscriber growth. The CEO’s claim that HBO Max was 'underpriced' is a calculated move to justify the hikes, which are likely to improve revenue margins.
Industry Context
The timing coincides with other major streamers like Disney+ and Apple TV+ increasing their prices, indicating a shift towards sustainable pricing models. This trend is driven by the high costs of content creation and licensing, which have outpaced subscriber growth.
Potential Impact
While the price hikes may reduce subscriber growth, they could also position HBO Max as a premium service, attracting viewers willing to pay more for quality content. Warner Bros. Discovery’s consideration of a sale or restructuring suggests the company aims to leverage its content assets for maximum valuation, possibly at the expense of consumer affordability.
Future Outlook
The industry will likely see further price adjustments as companies balance content costs with profitability. HBO Max’s move signals a shift from growth-at-all-costs to a focus on sustainable revenue, which could reshape consumer expectations and competitive dynamics in streaming.
What the papers say
The articles from The Independent, NY Post, Ars Technica, and TechCrunch all confirm the price increases for HBO Max, with slight variations in the details. The Independent emphasizes the immediate effect for new customers and the upcoming change for existing subscribers, while NY Post highlights the context of previous hikes and industry trends. Ars Technica provides detailed pricing figures and notes the strategic reasoning from CEO David Zaslav, who considers HBO Max 'underpriced.' TechCrunch echoes these points, emphasizing the industry-wide pattern of price hikes and Warner Bros. Discovery’s broader strategic considerations, including potential sale talks. Despite minor differences in phrasing, all sources agree on the core facts: HBO Max is raising prices, citing quality and underpricing, amidst a competitive and costly streaming landscape.
How we got here
HBO Max launched in May 2020, competing with streaming giants like Disney+ and Netflix. Previous price hikes occurred in January 2023 and June 2024. Warner Bros. Discovery CEO David Zaslav has publicly stated that the platform was 'underpriced,' prompting the recent increases. The company is also exploring strategic options, including a potential sale, to maximize shareholder value amid industry consolidation.
Go deeper
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David M. Zaslav is the president and chief executive officer of Discovery Inc., a position he has held since January 2007.
Most recently under Zaslav, Discovery acquired Scripps Networks Interactive, in a transaction which closed in March 2018.
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Warner Bros. Discovery is an upcoming American multinational mass media and entertainment conglomerate. The company will be formed though the merger of WarnerMedia and Discovery, Inc., which is expected to be completed by mid-April 2022.
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HBO Max, is an American subscription video on demand streaming service from AT&T's WarnerMedia. The service launched on May 27, 2020.
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Netflix, Inc. is an American technology and media services provider and production company headquartered in Los Gatos, California. Netflix was founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California.