HBO plans to release a cheaper, ad-supported version of its new streaming service next year

AT&T's WarnerMedia still plans to release an ad-supported version of HBO Max, its newest streaming service, early next year, incoming CEO John Stankey said Wednesday. 

"We believe the long term dynamics will be both subscription and advertising supported. If you think about what consumers like, they like choice," Stankey told CNBC's "Squawk Box." "You don't necessarily mind ads, if they're executed well and they're relevant."

Starting Wednesday, the company is offering HBO Max, without ads, for $14.99 per month. The company first announced its intentions to debut an ad-free service last October, well before HBO Max debuted. But at $14.99 per month, HBO Max is already more expensive than its rivals. Stankey did not say what HBO Max with ads would cost per month.

HBO Max is the latest to join the crowded streaming market, with the recent launch of Disney+ ($6.99 per month) and Comcast's Peacock set to launch broadly on July 15 (free, with ads). The companies are looking to disrupt the well-established video companies like Netflix ($12.99 per month for the standard plan), Hulu ($5.99 per month, with ads) and Amazon (free with Prime subscription). 

HBO Max set to debut Wednesday with 10,000 hours of content, including movies, original content and classic shows. In addition to HBO shows, HBO Max will include shows and movies from across WarnerMedia's portfolio, including Warner Brothers movies, TBS and TNT shows, "Sesame Street" and "Friends."

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

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