hbo max

Will AT&T See Max Revenue From Ad-supported HBO?

Big news: Details are starting to emerge around advertising with HBO Max.

Related: My thoughts on HBO Max’s Impact on Convergent TV Advertising

Key details for HBO Max advertising:
1) 
Launching in spring 2021
2) 2 minutes/hour for movies
3) 4 minutes/hour for TV shows
4) ≈ $80 CPM
5) $250K quarterly commitment

Big question #1: How does this ad load compare to other offerings?

Ad minutes per hour:
1) 
Linear TV – 16 – 20
2) 
Hulu – 9
3) 
Digital video – 8
4) 
Peacock – 5
5) HBO Max – 2-4

Big question #2: Why does HBO Max want ads?

Quick answer: Advertising will increase the average revenue per user (ARPU) beyond the $15/month subscription.

Quick math on the advertising model for HBO Max:
1) 
Ad minutes/hour – 3
2) 
30s spots/hour – 6
3) CPM $ –  $80
4) $/spot – $0.08
5) Ad revenue/hour – $0.48

HBO Max domestic subscribers (% growth) according to AT&T:
1) 
2019-Q4 – 34.6M
2) 
2020-Q2 – 36.3M (↑ 5%)

HBO Max domestic subscriber projections (YoY growth):
1) 2019 – 34M
2) 2020P – 36M (↑ 6%)
3) 2021P – 38M (↑ 6%)
4) 2022P – 41M (↑ 8%)
5) 2023P – 44M (↑ 7%)
6) 2024P – 47M (↑ 7%)
7) 2025P – 50M (↑ 6%)

Fun: Are you an HBO Max subscriber? 

More #1: WarnerMedia’s New CEO Says HBO Max Has One Clear Edge Over Netflix

More #2: Burn the mills: Why WarnerMedia is willing to chuck deuces to Roku and Amazon

READ NEXT

Want the latest insights from around the video advertising industry?
Subscribe to our State of the Screens Newsletter.

logo

Thank you

We have received your message and will be in touch shortly.

logo

Contact Us