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Week In Review: Ad-Supported HBO Max Is Here, CNN+ To Launch Too

1. Ad-Supported HBO Max Is Here

Warner, soon to be Warner Brothers Discovery, rolled out the ad-supported version of HBO Max this week, promising ad loads of around four minutes (or around one-quarter of what you’d get on network TV), the ability for advertisers to buy ad blocks on certain shows and more.

For consumers, saving that $5 each month means no 4K, no downloading and no first run movies but no ads on HBO programming either.

Why It Matters

At $10/month, ad-supported Max is now in the same price ballpark as other services and if you’re really only watching it for the HBO programming, you won’t even be bothered by ads.

At least not during the show you’re watching anyway. You will get them when you’re watching NBA games on TNT, but given the choice of an ad or listening to the announcers blathering for an extra two minutes, trying to fill the space created by a time out, you may not mind the ad.

As for the negatives, I doubt most people are going to notice the difference between 1080p and 4K. Cinephiles might, but the average person, watching in their living room and not their “media room” won’t see the difference.

Downloading could be a thing in a few months when travel starts up again in earnest and you’re looking for something to watch on the plane, but (a) there are plenty of other services to download from and (b) if it’s really important to you, you can upgrade just for that month.

Speaking of churn, HBO is offering annual subscriptions to both ad-free and ad-supported Max for $150 and $100 respectively. This is something that we’ve been predicting (the annual subscription offering, not the price) as all of the various Flixes need a way to cut back on churn, especially Flixes with ad-supported versions, as it makes it much, much easier to guarantee an audience six months from now if a sizable chunk of your audience is locked in for a year.

In a similar vein, VCBS made some tweaks to ad-supported Paramount+ this week too, dropping the price to $5/month but eliminating the feed from your local CBS station and the ability to download.

But…it seems that while this new plan, dubbed the Paramount+ Essential plan will be available to new subscribers, if you already signed up for the $6/month Limited Commercial plan, you can keep paying the extra dollar and keep that plan, which does include the feed from your local CBS station.

Which must make the AT&T people happy in a “Ha! They’re even more confusing than we are!” sort of way.

Just as baffling is why they’d want to eliminate the local CBS feed, given that it seems the CBS local stations need those cord cutters more than the cord cutters need them and that they’d want to put them (and their ads) in front of as many people as possible.

But what do I know?

What You Need To Do About It

If you’re Warner, good job on a less confusing roll out this time, though no one seems all that sure what is going to make a new show “HBO-worthy” in that it will still be shown sans commercials. Our friend Simon Pullman, a top entertainment attorney, suggested that “HBO shows” would be those new shows that ran on HBO’s linear cable feed (yup, that hasn’t gone away) but how the determination is made as to which new HBO Max originals wind up on linear HBO is anyone’s guess. So Warner team, when you figure that out, please let us know.

If you’re Paramount+, maybe reconsider the live local CBS thing. I get that you don’t want to encourage cord-cutting just yet and that you’re hoping the bulk of ad-supported Paramount+ subscribers still maintain their pay TV subscriptions, but that’s likely just temporary and you want to encourage your local affiilates (Though to be fair, “temporary” in the TV industry can mean four to five years.)

If you’re a consumer and you mostly watch HBO Max for the HBO shows and you’re not a big downloader, then the ad-supported version might be just the ticket.

2. CNN+ To Launch Too

Warner, according to numerous reports, had been looking to sell off CNN, and so had not done anything to launch CNN on streaming.

Now that the deal with Discovery is in place and CNN is not going anywhere, the WSJ is reporting on the impending launch of CNN+, their streaming app. According to the Journal, the new app will feature exclusive content like new shows from CNN favorites Anderson Cooper and Don Lemon. 

Whether this means that the live CNN news feed that runs on cable would be available on the new app was not addressed.

Why It Matters

That live news feed makes all the difference in the world.

So many people still cling to cable because they don’t want to give up access to the news in case of a disaster, an election or some sort of emergency. 

And for many people, CNN is the news.

Having an app like CNN+ to bundle together with HBO Max and Discovery+ would be a smart play, though I wonder if it would not be even smarter to include the CNN live feed in the same interface as the Discovery+ and/or HBO Max apps, given consumers’ well known dislike for having to move from app to app to watch what they want, and the general tendency to watch a news story while also watching something else and switching back and forth.

On a more macro level, how and when live news feeds show up on the various Flixes and how they are promoted is worth watching.

Paramount+ has made a point of promoting the fact that it has both the national CBS News feed as well as local station feeds, ABC News is available live on Hulu and NBC has made some MSNBC shows available on Peacock, but has not gone so far as to include the live feed. (I’m thinking this is somehow related to Peacock being owned by Comcast and not wanting to mess with cable carriage deals.)

But the ready availability of live national news feeds on streaming will go a long way towards convincing the many people who are considering giving up their traditional cable packages that the time is nigh.

While cord cutting is picking up some, the 1.9 million households who gave up pay TV in Q1 2021 still represent only 2.4% of the almost 80 million households that continue to subscribe to pay TV.

Hardly the “massive wave” we keep reading about.

What You Need To Do About It

If you’re Discovery Warner, definitely get the live CNN feed in there somewhere (provided you can–there may be existing contracts that forbid this). That will get you a whole lot of subscribers, especially if you bundle CNN+ together with Discovery+ and HBO Max, both individually or together.

You might also want to consider launching local versions of CNN on CNN+, or at least local newscasts a few times a day. It would be an excellent way to convince viewers they no longer need pay TV to keep up with what’s going on in their area, something that continues to keep many tethered to cable.

If you’re one of the other networks, time to start promoting the fact that you too have a live national news feed. Given that many Americans, rightly or not, consider CNN to be overtly partisan, CBS and ABC News in particular seem to have a shot at picking up many of those viewers.