Warner Bros. Discovery (WBD) has finally increased the monthly price of HBO Max by $1 two years after releasing the service.
Reports indicate that it is a part of the firm's future plans to fund new investments in content and improve the overall customer experience. However, it could also hint that the era of rapid expansion at any cost in the streaming industry is coming to an end.
First-time Price Hike
According to Variety's report, HBO Max ad-free monthly subscriptions in the US will raise the cost from $14.99 to $15.99 plus applicable taxes starting Thursday, Jan. 12. This represents an increase of about 7%.
Starting with the following payment cycle on or after next month's second Saturday, Feb. 11, the monthly pricing for existing HBO Max members who are paying $14.99/month will climb to $15.99/month.
"This price increase of one dollar will allow us to continue to invest in providing even more culture-defining programming and improving our customer experience for all users," the company stated.
WBD already hinted at an upcoming price increase for HBO Max before.
HBO Max's ad-free tier presents an "opportunity," according to JB Perrette, president, and CEO of worldwide streaming and gaming, who made this claim to investors back in November 2022.
He said that by 2023, "it will have been three years since pricing has moved, which we think is an opportunity, particularly in this environment."
Perrette added that they believe they have a pricing edge on the commercial-free HBO Max service and can raise rates from where they are now.
Saving Costs, Minimizing Losses
Warner Bros. Discovery, founded after Discovery's 2022 purchase of WarnerMedia, has made a number of programming cuts in an effort to save costs, thus the price increase.
Among these are the cancellations of HBO Max's Minx Season 2 and HBO's The Nevers. There was also the termination of several exclusive feature titles and original series, as well as 200 older Sesame Street episodes.
A total of 256 Looney Tunes cartoons and three seasons of The Flintstones were also taken off HBO Max.
When AT&T bought WarnerMedia, in May 2020, they released HBO Max at $14.99 per month.
WBD representatives did not immediately comment about whether the price of the ad-supported HBO Max package, which was launched in June 2021 at $9.99/month, would also be rising.
Further Projects
The media giant is also getting ready to roll out a new platform in the US that combines HBO Max and Discovery+ in the early months of 2023. The company has not yet released information about the product's price, packaging, or name, but "Max" seems to be the frontrunner.
Last month, WBD estimated the acquisition might cost them up to $3.5 billion in content impairment and development write-off penalties.
