HBO Max will debut cheaper version in June, with commercials

It’s about to get easier to afford some version of HBO Max.

AT&T will launch an advertising-supported version of its streaming service in June to supercharge its growth in the competitive direct-to-consumer space, the company said Friday.

Executives laid out the plans at AT&T’s investor conference, during which the Dallas-based phone giant also significantly boosted projections for HBO Max’s subscriber count.

The regular HBO Max, which launched 10 months ago, costs $15 a month, which is more than its main competitors. The Disney+ monthly fee is going up to $8 soon, while Netflix’s most popular plan costs $14. Lower cost offerings include NBCUniversal’s Peacock, Discovery+ and Apple TV+.

HBO Max’s version that includes commercials should help it appeal to cost-conscious customers who are already bombarded with subscriptions and who weren’t already subscribers to HBO, the premium pay-TV channel.

AT&T has not said what the ad-supported HBO Max will cost.

Even at its high price, HBO Max is growing. AT&T said HBO Max and HBO ended 2020 with 61 million subscribers, and the company expects the services to increase to 67 million to 70 million subscribers by the end of this year.

AT&T expects HBO Max and HBO subscribers to hit 120 million to 150 million worldwide by the end of 2025, up from the 75 million to 90 million the firm projected in October 2019.

“We grew more in the last seven months of last year than we did in the previous decade,” AT&T Chief Executive John Stankey said in an interview with CNBC.

Some of that growth will come from the ad-supported version and its international expansion.

AT&T plans to debut HBO Max in 60 countries outside the United States in 2021, including 39 Latin American and Caribbean territories in late June and 21 European markets during the second half of the year.

Disney+ this week said it has 100 million global subscribers. It expects the service to grow to as many as 260 million customers by 2024. Netflix has more than 200 million subscribers.

AT&T is betting on premium content to grow HBO Max, including new movies.

The service debuts Zack Snyder’s cut of “Justice League” this week, and this year will be the streaming home of movies like “Dune” and “Matrix 4.” The HBO Max with ads will not have the theatrical movies that premiere on streaming at the same time as they hit the big screen.