Warner Bros. Discovery is increasing the monthly price of HBO Max by $1 as the company seeks to further invest in content and enhance the user experience.
On Thursday, the company announced that the price of the HBO Max ad-free tier will rise to $15.99 per month from $14.99.
This will be the first price increase for HBO Max since its launch in May 2020. The new rate will apply to existing subscribers starting with their next billing cycle, or on February 11.
This price increase comes ahead of Warner Bros. Discovery’s planned spring 2023 launch of its combined HBO Max and Discovery+ streaming service, which will be branded as Max.
Warner Bros. Discovery executives believe there is potential to increase the pricing of streaming services, with the company aiming to achieve profitability in its streaming business soon.
“There’s no doubt that these products are priced way too low,” stated Warner Bros. Discovery CFO Gunnar Wiedenfels during a conference earlier this month.
“And I think this was partly the capital market fueled phase of land grabbing. You couldn’t lose enough money and couldn’t grow subscribers fast enough. I think that’s behind us.”
The company has been cutting costs, such as reducing spending on HBO Max’s original series, as it strives to make streaming profitable.
Additionally, it is addressing a significant debt load from Discovery’s acquisition of Warner, which was completed last year. Warner Bros. Discovery aims to achieve $1 billion in streaming earnings by 2025.
The company is also focusing on improving the user experience and revamping the entire app.
“We’re going to come out with a great product from a consumer experience perspective and that’s frankly the biggest holdback for HBO Max right now. The experience is not where it needs to be,” Wiedenfels said at the conference this month.
