HBO Max increases monthly subscription costs to $15.99
Allie Canal, Yahoo Finance media journalist, discusses Warner Bros. Discovery has raised the subscription cost for HBO Max.
Video Transcript
SEANA SMITH HBO Max raised prices on its ad free service for first time since it was launched in 2020. Yahoo Finance’s Ali Canal gives us all the details – Ali, How Much More Will We Be Paying?
ALEXANDRA CANAL If you are a HBO Max subscriber, you will be charged $1 more. The current price is $14.99. $15.99 will be the new price. This price is higher than the soon-to-be launched combo service between Discovery Channel and HBO Max, which will be available later in the spring.
They have raised prices at an interesting time. This combo service might be available at a $15.99 price point. We will have to watch and wait. The company sent an email to subscribers stating that the increase would, quote, “allow me to continue to invest to provide even more culture-defining programming, and improve my customer experience for all our users.”
Keep in mind that Warner Brothers Discovery cut multiple HBO-specific content and projects as a result of the many restructuring challenges facing the company. This greatly upset fans. Investors seem to love this move. They love the pricing power. The stock rose 4% after the news.
This company received some positive Wall Street sentiment earlier this week. Guggenheim upgraded shares yesterday to a neutral buy, while analysts at Goldman Sachs (and Bank of America) indicated that the company has brighter days ahead despite the messy year of 2022.
DAVE BRIGGS This allows you to watch the best TV show, “Succession.” It’s obvious that I pay an extra dollar per month. Wall Street loves Netflix too. Tell us what you can tell us.
ALEXANDRA CANAL Jefferies upgraded the stock to buy-from-hold and raised their price target from $385 per share to $310. This is because of some longer-term catalysts like the recently launched ad tier and crackdown on password sharing. Jefferies estimates that 2024’s revenue and adjusted EBITDA will surpass Wall Street estimates.
That will lead to some positive margin upside, and valuations returning to historic levels. This will be a long process if you’re a Netflix shareholder. While you won’t see any immediate changes this year; perhaps we will see some of the benefits that Netflix is currently providing in 2024.
Keep waiting and you will be surprised. Today’s shares were slightly higher than they were earlier today. They have trimmed some of their gains. However, the current rate is 1%.