WarnerMedia has set its latest distribution deal for HBO Max, setting an agreement with Hulu for the forthcoming streaming service to be available to subscribers to the Disney-owned streaming service.
The arrangement follows the basic outline of the “add-on” model that had previously existed on Hulu for premium channels like Showtime, HBO, Starz, etc. It will allow a majority of Hulu’s nearly 31 million subscribers to add HBO Max through Hulu’s basic or ad-supported tiers as well as its SVOD/live TV bundle. The deal follows a flurry of similar announcements by WarnerMedia with Charter Communications, YouTube TV, Google and Apple ahead of the May 27 launch of HBO Max.
The vast majority of existing “HBO on Hulu” subscribers will get free access to the streaming service, which will retail for $15 a month. New and existing Hulu subscribers will be able to subscribe to HBO Max directly through Hulu for that same $15 monthly rate.
As launch day approaches, WarnerMedia has also taken another step to try to goose subscriptions, offering HBO Max for $12 a month via its new partner platforms. That is a significant development in the history of HBO, whose stand-alone streaming service, HBO Now, hit the market in 2015. Because of “most-favored nation” concerns that could have lowered fees across the board, former HBO parent Time Warner and then WarnerMedia and AT&T largely avoided discount pricing. The prevailing sentiment at the time was that pricing needed to convey the prestige sensibility of the network. That notion that has largely been superseded by internet distribution, and at $15 HBO Max is at the top end of the streaming spectrum.
The Hulu deal also highlights the fact that the rise of streaming has cast traditional rivalries in a different light. Disney, a direct competitor with WarnerMedia in many businesses, including direct-to-consumer streaming, took full control of Hulu in 2019. WarnerMedia sold its 10% stake in Hulu to Disney at that point. Over prior years, since early in Hulu’s 13-year run, units of WarnerMedia have supplied programming to Hulu and its networks are distributed via Hulu’s live bundle.
Hulu’s rising subscriber numbers, including its live offering, which now has 3.4 million paying customers, will be updated as part of Disney’s quarterly earnings report next Thursday.
WarnerMedia has said it is targeting 75 million to 90 million subscribers globally by 2025. The company last fall said it would be integrated on AT&T platforms, including DirecTV, which will give it a substantial base at launch.
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