The ad supported version of HBO Max already had $80 million in upfront spending commitments from marketers, months before its June launch, according to WarnerMedia CEO Jason Kilar.
Speaking at parent company AT&T’s investor day Friday, Kilar said that advertising, when executed thoroughly and elegantly, is a powerful way to lower prices for everyone. We will be doing just that.”
The ad supported version of HBO Max will not have the Warner Bros. movies that are being streamed the same day as they are released in theaters. And HBO originals will not have commercials in them, he said.
Kilar said advertisers have already responded to the pitch. “Thanks in part to the safe, addressable, premium environment, unlike any service out there, the pre-launch response for marketers certainly suggests that they agree with these statements, give that we already have $80 million in upfront commitments.”
After a tumultuous time following the acquisition of Warner Media by AT&T, HBO Max got off to a stumbling start, saddled with a high price point.
But Kilar noted said HBO Max is now exceeding internal expectations and is two years ahead of projections in terms of subscribers.
“In fact more HBO subscribers were added in the final seven months of 2020 than HBO added in the previous decade,” he said.
The new projection is that HBO and HBO Max could reach 120 million to 150 million subscribers by 2025, including international expansion into 61 markets this year. (The projection does not include certain markets where HBO is licensed, including the U.K., Germany, Italy and Australia).
About half of the 120 million subscribers would come from outside the U.S., Kilar said.
Originally, AT&T had projected 67 million to 70 million subscribers.
Given its high price point, Kilar said that HBO Max is already No 2 among streaming services in terms of generating revenue, compared to services like Disney Plus, which launched with a lower, more attractive price.
Revenue for HBO and HBO Max at the end of 2020 was $6.8 billion and are expected to more than double to $15 billion by 2025, Kilar said.
Kilar said that HBO Max was meeting its goals of reaching a broader, younger, more engaged audience.
He said 43% of HBO Max viewers are under the age of 35 and that 50% are female, whereas HBO historically skewed male. Engagement in terms of time spent viewing has nearly doubled to 2.8 hours per day from 1.5 hours viewed on the linear channel.
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