HBO Max, a popular ad-free streaming plan from Warner Bros. Discovery (WBD), is going up in price.
The price of HBO Max’s ad-free subscription tier will increase from $14.99 a month to $15.99 a month in the United States, according to an email sent to subscribers on Thursday. This is the first time the company has raised the price of a monthly subscription since it launched in May 2020. It also comes before the company’s relaunch, which is rumored to combine HBO Max and Discovery+ programs and be called “Max.”
The platform noted that existing subscribers will notice the price increase in their subsequent billing cycle on or after Saturday, February 11. “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 platform wrote.
On the news, Warner Bros. Discovery shares went up more than 3% in Thursday afternoon trading.
In 2022, macroeconomic challenges, further linear television subscriber losses, a slowdown in advertising, and a variety of restructuring costs put pressure on Warner Bros. Discovery.
As CEO David Zaslav intensified efforts to streamline the debt-ridden business, the company canceled a number of projects that were specifically intended for HBO Max.
“We’re painting a mural on the side of a building, and all kinds of stuff is falling off,” Zaslav told RBC Capital Markets in November. “It looks messy, and it is messy. It’s really hard and it’s really challenging.”
“The best IP in the world” necessitated cost cutting, according to Zaslav.
“We need the best structure and we’ve got to spend money where it’s working,” he said.
Analysts at Goldman Sachs and Bank of America recently predicted that the troubled entertainment giant would see better times ahead, despite a chaotic 2022.
Brett Feldman, a Goldman Sachs analyst, named the company its “favorite media stock” for 2023. He cited important execution catalysts like the company’s upcoming streaming relaunch this spring and recent merger milestones.
Jessica Reif of Bank of America concurred, pointing to the company’s “improving narrative” for the coming year and its potential for the long term.
Warner Bros.’s stock is up about 40% since Dec. 29, after losing nearly 60% in 2022.