
Just days after Netflix said it was raising
prices -- anywhere from $1 to $2 a month -- HBO Max said it was offering a 20% discount across many of its
subscription streaming options.
Any connection?
Price sensitivity is no joke. Consumers are well aware of what virtually all streaming services cost -- anywhere from $4.99 on the low
end for Apple TV+ to a high of $19.99 a month for the 4K-enabled Netflix option with multiple TV set usage.
Now, streamers can get limited ad-supported HBO Max for $7.99 a month (it had been
$9.99 a month). Perhaps the more glaring news is that HBO Max's ubiquitous ad-free option can be had for $11.99 a month for the next 12 months. It has been $14.99 a month.
This $14.99 price
seemed to be in the direct line of sight of Netflix executives. Late last week, the subscription video-on-demand service said it will gradually raise its price for its most widely used
“standard” option to $15.49 -- $1.50 more than its current $13.99 number.
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For sure, Netflix had other issues -- like raising its price to garner extra billions needed to produce
new content. Still, at just 50 cents more than the highest-priced streamer out there -- HBO Max -- Netflix was positioning what the marketplace could sustain. This could be construed as a great deal,
especially considering that Netflix offers more original content than many top competitors combined.
In turn, HBO Max -- still a relative newbie streamer -- might think it can endure 12 months
of sharply lower monthly fees with the chances to boost subscribers. Many businesses -- especially in a startup phrase -- account for a certain level of losses in their initial years. So what’s
a few more lines of red ink -- especially if you can make gains in the long run?
HBO Max, as well as its linear TV network HBO, has a lot going for it content-wise. The storied Warner Bros.
studio has a massive amount of high-profile content, including DC comics content, the “Harry Potter” franchise, “The Matrix,” “King Kong” and Looney Tunes.
No doubt it believes -- along with Disney+ -- it will be a main competitor to Netflix in the years to come. That would be the main story to tell consumers -- as well as a good supporting-cast story
about price.