AT&T getting positive customer, brand feedback for HBO Max with Ads, exec says

A cheaper, ad-supported version of HBO Max is receiving positive customer and brand feedback more than two months after it launched on streaming platforms in the United States, an AT&T WarnerMedia executive affirmed this week.

Speaking at the StreamTV Ad Summit on Tuesday, Julian Franco, the senior executive in charge or product management at HBO Max with Ads, attributed the positive feedback to WarnerMedia's mission of putting the customer experience first, then figuring out how to offer subsidized access to HBO Max's vast content catalog through thoughtful, personalized advertisements.

"Our broader mission is to change the world through story, and the way that I look at how we play into that at HBO to discover and empower the world's greatest storytellers with the best tools and then to distribute those stories to as many people as possible in order to shape culture," Franco said. "So, nowhere in that sentence does it say, 'to households, families and individuals who can afford to see or hear them.'"

Franco said discussions at WarnerMedia for a cheaper version of HBO Max began while the commercial-free version was still in development. He joined the company in 2019 and was immediately pulled into discussions that focused on delivering HBO content and other films and movies from WarnerMedia's entertainment portfolio at a lower price point.

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"We always knew that it was going to be critically important to be able to deliver a materially lower price to as many households as possible, and we also knew that having an ad-supported version was the easiest transactional value that there is between a service and a customer," Franco said.

HBO Max with Ads is sold directly to consumers at a price of $10 a month — a $5 a month discount compared to the commercial-free version of HBO Max. The lower price comes with a few compromises: Subscribers of the ad-supported version are limited to high-definition video quality, aren't able to watch same-day theatrical releases of Warner Bros. movies (a perk that is likely ending next year, anyway), and are not able to download shows or movies for offline viewing.

Those trade-offs are few and far between compared to the commercial-free version of the service. HBO Max with Ads customers still get access to the deep catalog of WarnerMedia content, with ads limited to just four minutes per hour.

On Tuesday, Franco said WarnerMedia arrived at the four-minute advertisement cap after the company reviewed engagement data from the commercial-free version of the service, projecting that "we would get around four minutes [of engagement] per hour if we delivered the delightful ad experience that we are committed to."

"I can say that we've been well, well below [four minutes per hour] since launch, which is really exciting for the customers," Franco said.

Less exciting for customers is the HBO Max with Ads experience on some platforms: Streamers who use Apple TV and Roku devices have complained on social media about random crashes and other glitches, with AT&T executives pinning the problem on developers incorporating more code into the HBO Max app specifically to support the ad-supported tier.

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To their credit, developers have fixed problems almost as quickly as they are discovered, and an AT&T executive last week told the entertainment website Vulture that the company intends to relaunch the HBO Max app in the coming months with the aim of offering a more-stable experience for users.

It is unclear how many customers are subscribed to HBO Max with Ads compared to the commercial-free version of HBO Max — AT&T doesn't report subscriber data for the two tiers independently, and rarely does it reveal how many customers are subscribed to its streaming products compared to those who receive HBO programming through a traditional cable or satellite provider.

But brands are apparently not hesitating to jump at the opportunity to reach HBO Max with Ads customers, however many of them there are: Franco said WarnerMedia has received "an amazing amount of feedback" from companies that have purchased inventory. Advertisers are particularly interested in the "brand block" format, he said, where the start of a show or movie is sponsored by a single company, with little or no ad interruptions throughout the duration of a program.

The format has worked so well on HBO Max with Ads that WarnerMedia is developing a new style of advertisement around it. Franco offered few specifics on the new approach — he said the new ad products are "headed out to market" right now — but that they should roll out to customers later in the year.