HBO Max’s Price Too High for Most Americans’ Streaming Budgets

(Bloomberg) -- AT&T Inc.'s HBO Max doesn't debut until the end of the month, but the company is already working hard to convince Americans they can afford it.

The video service will cost $15 a month -- at the high end of what its streaming rivals charge -- but a promotion lets customers get it for $12 monthly for the first year. AT&T executive Jeff McElfresh said last month that the company was looking at several ways to make HBO Max more palatable.

It's no wonder. According to a survey of about 1,000 U.S. consumers conducted by Corus on behalf of Bloomberg, the majority of Americans spend $15 or less on their entire streaming budget. And for now at least, HBO Max isn't the priority.

HBO's platform was considered less essential than Netflix, Disney+, Hulu and Amazon Prime Video, according to respondents. They put it in the same range as CBS All Access, a $6-a-month service that's been a modest success for ViacomCBS Inc. but not the buzzy hit that HBO Max aspires to be.

Netflix's most popular tier is $13 a month. And Disney+, which has quickly racked up more than 50 million users since launching last year, only costs $7.

Streaming services have generally benefited from the coronavirus lockdowns that swept the U.S. and much of the world, with Netflix adding a staggering 15.8 million subscribers last quarter. But the economic slump and widespread unemployment may make consumers less eager to order new services, especially as the crisis wears on.

AT&T is rolling out HBO Max on May 27, and the company has been mulling a range of promotions “to find the right value proposition and the right market-expansion opportunity,” McElfresh said last month.

Quibi, a short-form video app introduced last month, went through the same process. It initially offered a free 90-day trial to new customers.

HBO Max does have some advantages. Most notably, more than 40 million people in the U.S. already pay for HBO, either the cable network or the current online version. And they'll now have an opportunity to pay a similar price for a service with much more content, including classic movies, reruns like “Friends” and new originals.

AT&T can also make a pitch to cord cutters, who are getting rid of cable TV and pouring that money into streaming services. Even budget-minded customers may find they have an extra $15 a month to spend.