Combined HBO Max/Discovery+ service gets an earlier launch date, price hike is to be expected

After Warner Bros. Discovery reported its third-quarter earnings results yesterday, the company told investors and analysts in a call that the forthcoming combined HBO Max/Discovery+ streaming service will now launch in the U.S. earlier than previously announced. CEO David Zaslav said the yet-to-be-named service is now getting a spring 2023 launch instead of in the summer.

Following its debut in the United States, the service will roll out in Latin America and then in Europe in 2024. While the company has yet to announce how much the service will cost or what it’ll be called, it will get an ad-free and ad-lite plan.

Also, HBO Max’s ad-free plan might get a price hike next year, the company noted during yesterday’s call.

“By 2023, HBO Max will not have raised prices since its launch. So, it will have been three years since pricing has moved. Which we think is an opportunity, particularly in this environment,” JB Perrette, president and CEO of Global Streaming and Games, said.

The $14.99/month price of HBO Max’s ad-free plan has not budged since its launch in 2020. As more streaming services increase its prices for subscribers, HBO Max will likely join in on the trend. And while many subscribers won’t be happy with a price hike, it also makes sense for the streamer. Once HBO Max merges with Discovery+, the higher cost seems justifiable because subscribers will get double the amount of content.

Another reason for the potential price hike is that not enough subscribers are choosing HBO Max’s $9.99/month ad-supported tier, which launched last year.

“We were frankly a little surprised in the HBO Max ad-lite offering that more people have not moved to that offering… We believe there’s actually some pricing advantage for us on the ad-free service, and we can probably move north of where the prices are today,” Perrette added.

Separately, Zaslav mentioned that the company is still “aggressively attacking the AVOD market with our own FAST offering in 2023.” WBD stated last quarter that it was exploring a free ad-supported streaming TV service (FAST). “As a company with the largest film and TV library in the industry, we have a unique opportunity to increase our addressable market and drive real value, and we plan to move quickly,” he said yesterday.

WBD’s future FAST offering will join other media company-owned FAST services like NBCUniversal’s Peacock, Paramount’s Pluto TV, Fox’s Tubi and Comcast’s Xumo.

The company reported a net add of 2.8 million global subscribers across HBO, HBO Max and Discovery+ in the third quarter, bringing the total to 94.9 million. Only 500,000 domestic subs were added.