The Streaming War Continues: How HBO Max Is One-Upping Netflix By Lowering Prices

Not long after its rival Netflix (NFLX) – Get Netflix Inc. Report announced that it was raising subscription prices across North America, HBO Max chose to take the opposite approach — by offering potential subscribers 20% off its monthly plans.

WarnerMedia-owned HBO Max has, at present, two types of monthly subscriptions: an ad-supported version for $9.99 a month and an ad-free version for $14.99 a month. For those who sign up before the end of January, both plans will cost $7.99 or $11.99 a month for the length of a year. Warner, in turn, is owned by the larger AT&T T.

“New and returning HBO Max customers can subscribe to: 1) the HBO Max Ad Free monthly plan at a discounted rate of $11.99/mo. plus applicable taxes for 12 months OR 2) the HBO Max With Ads monthly plan at a discounted rate of $7.99/mo. plus applicable taxes for 12 months,” read the offer details.

What’s This All About?

A few months away from the two-year anniversary since its U.S. launch, HBO Max has been growing fast — last week, the company announced that it has reached 74 million Max and regular HBO subscribers at the end of 2021. That numbers was only at 61 million at the end of 2020.

Popular shows like “Succession” and “The White Lotus” and exclusive access to Warner movies like “The Matrix Resurrections” have helped HBO Max carve out a niche of subscribers hungry for content not offered anywhere else . (The discounted plans do not include access to any 2022 movie premieres.)

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Content investment, along with various promotions and offers, are likely a way to close the gap between the two larger streaming platforms.

But while it is now firmly rooted in the “big three” of American streaming services, HBO Max is still far below Netflix’s 214 million subscribers and Disney Plus’s 118.1 million subscribers. Last week, HBO Max committed to spend $18 billion on adding new content to its streaming platform in 2022.

“It’s fair to say it’s becoming a three-horse race at the front of the pack,” WarnerMedia CEO Jason Kilar recently told Financial Times. “With regards to storytelling…and when you look at the subscriber numbers, things drop off a fair bit after the first three horses.”

The Streaming War Continues

Netflix, in turn, recently raised the prices of its standard plan to $15.49 from $13.99 in the U.S. and C$16.49 ($13.18) from C$14.99 in Canada. The basic plan, which only allows subscribers to stream on one screen, now costs $9.99 ($1 more than before) while the expanded plan costs $19.99 ($2 more than before.)

The company justified the increase by saying it, too, was looking to fund more original content — its commitment for 2022 was at $17 billion. While HBO expands, Netflix must find a way to continue to draw in new subscribers at a time when many people subscribed years ago.

“We’re updating our prices so that we can continue to offer a wide variety of quality entertainment options,” a Netflix spokesperson told TheStreet last week. “As always we offer a range of plans so members can pick a price that works for their budget.”

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