Viewers who want to watch Max without ads will soon see a bump in their monthly or yearly subscription price, as Warner Bros. Discovery announced price increases Tuesday.
Effective immediately for new subscribers, WBD raised the price for monthly subscriptions by $1 on Max’s base ad-free tier (increasing to a new price of $16.99 per month) and its Ultimate ad-free tier (now priced at $20.99 per month). Annual prices are increasing by $20 for the base ad-free plan (now about $170 per year) and by $10 for the Ultimate (now about $210 per year).
Existing subscribers will get notice 30 days before their plan renews and see price increases starting from their next billing cycle on or after Thursday, July 4. Current subscribers on annual plans won’t see a bump in price until their plan renews.
Notably, the Max with Ads plan is keeping its existing price of $9.99 per month or about $100 per year.
In addition to getting a commercial-free experience, those that pay more for the base ad-free plan also get 30 downloads for mobile viewing. The Ultimate ad-free Max plan allows four concurrent device streams (compared to two allowed on both the cheaper ad-free plan and plan with ads), 4K UHD, Dolby Atmos audio as available and 100 downloads to watch on the go.
And for an undisclosed limited time, subscribers to Max plans also currently get access to the live sports Bleacher Report add-on at no extra cost.
Another streaming service price increase isn’t entirely unexpected nor is WBD’s move to keep the same price point on its ad-supported plan.
TVREV analyst Alan Wolk has previously pegged a strategy for SVODs where they raise prices on ad-free plans and create a wider gap between the cost of ad-supported offerings – in part with the aim to drive uptake for the latter where streamers want to build up larger bases as there is lucrative advertising revenue to be made.
As Wolk wrote in a recent column on StreamTV Insider, the reasoning behind the so-called Wider Gap Theory for SVODs, is that “the best way to push more people to your ad-supported tier is to make the price gap between tiers much, much wider.”
“Because if it’s just five dollars, and people are signing up to watch a specific show, that five dollars is going to seem well worth it. But $20? That’s worth taking a second look,” he wrote.
The monthly price increases of just $1 for ad-free Max plans also goes to another tactic the analyst previously called out, where streamers entered the subscription game with underpriced initial offerings “to create a loyal user base, at which point you slowly ‘boil the frog’ by gradually raising prices at a pace the user hopefully won’t notice.”
A price bump to ad-free Max could also make a forthcoming bundled offer with Disney that includes Max, Hulu and Disney+ more attractive – although official details on price and timing haven’t been disclosed. A direct-to-consumer bundled offer for the trio of services is expected to launch this summer, with options for both ad-free and ad-supported plans.
On WBD’s first quarter earnings call in May when plans for the bundle were disclosed, JB Perrette, WBD CEO of Global Streaming and Games, said the company was working to make it “priced very attractively” compared to the cost of a standalone Max subscription and price of the existing Hulu-Disney+ bundle, the latter which costs $9.99 with ads and $19.99 ad-free.