Advertisers have committed $80 million to HBO Max’s ad-supported variation, The Information reports.
Why It Matters: Cord-cutting has led large swaths of users into the streaming wars and advertisers are following the eyeballs. The high level of financial commitment here just shows that “marketers are looking to spend money outside of traditional television.
- For the countless streaming services popping up, it’s an encouraging sign for one of the power players in the space.
- HBO Max is joining competitors like Hulu and Paramount+ that offer alternate versions of their service with ads.
The Details: WarnerMedia is selling ad time at prices that range as high as $75 for every 1,000 impressions on HBO Max.
- It’s more than triple the rate it gets for TNT and TBS.
- The ad-supported version will also include a less expensive pricing model.
How important this is depends on one thing — how quickly HBO Max can grow its user base. The company said it expects to reach 120 million to 150 million subscribers worldwide by the end of 2025 as it continues international expansion. At the end of last year, the platform had roughly 61 million subscribers.
Going Forward: The ad-supported version of HBO Max will launch in June. Later this year, HBO Max plans to release The Suicide Squad, Dune and The Matrix 4 simultaneously on the platform and in theatres.
The growth of HBO Max is a big part of the bull case for AT&T ($T) stock. I personally believe that HBO Max is a top-three streaming service in terms of product value and should find meaningful growth.
We wrote an investment article about this very subject, which you can find here.