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HBO Max to Roll-Out Lower Cost Streaming Service in 2021

By Donna Fuscaldo – May 27, 2020 at 1:53PM

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HBO Max wants to give consumers choice which is why it will roll out an ad-supported version of its streaming service next year.

HBO Max, the streaming service operated by AT&T's (T -2.12%) WarnerMedia, will roll out a lower-cost version of its platform in 2021. 

John Stankey, AT&T's new CEO who takes the reins as AT&T's CEO on July 1, told CNBC an advertising-supported version of HBO Max is in the works. As it stands, the service, which went live Wednesday, costs $14.99 a month, making it the most expensive streaming offering on the market. HBO Max is taking on Netflix, Amazon's Prime Video, and Walt Disney's Disney+ in the streaming content market. 

Tiles of streaming content on a screen with a person holding a remote toward it.

IMAGE SOURCE: GETTY IMAGES.

Stankey said by offering a subscription service and a lower cost version that has ads, the company is giving consumers what they want: choice. It's not clear how much cheaper the ad-supported service will ultimately be. Disney+ costs $6.99 a month while Netflix's most expensive subscription plan comes in at $12.99 a month. 

The new entrant into the streaming wars launched with 10,000 hours of premium content including all of HBO's existing content, movies and TV series from Warner Bros, and new Max Originals. Heading into the launch date, HBO Max was able to sign key distributors, including Apple, Google, Hulu, and YouTube TV. But it failed to reach distribution deals with Roku, a leading streaming platform with about 40 million active accounts; Amazon Fire TV; and Comcast, one of the nation's biggest cable providers. That leaves millions of potential customers that HBO Max won't have access to, at least for now.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Donna Fuscaldo has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon, Apple, Netflix, Roku, and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and short July 2020 $115 calls on Walt Disney. The Motley Fool has a disclosure policy.

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Stocks Mentioned

AT&T Inc. Stock Quote
AT&T Inc.
T
$15.32 (-2.12%) $0.33
Apple Inc. Stock Quote
Apple Inc.
AAPL
$145.43 (-0.66%) $0.97
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$100.04 (-0.75%) $0.76
Netflix, Inc. Stock Quote
Netflix, Inc.
NFLX
$240.02 (1.39%) $3.29
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$120.30 (-0.54%) $0.65
Roku Stock Quote
Roku
ROKU
$59.39 (-0.52%) $0.31

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