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HBO: 'Game of Thrones' Disc Sales Boost 2014 Revenue

11 Feb, 2015 By: Erik Gruenwedel

Pay-TV channel has launch date in place for pending OTT venture

Packaged-media sales of HBO’s most-watched original series, “Game of Thrones,” contributed to the premium channel upping full-year 2014 (ended Dec. 31) revenue 10% ($508 million) to $5.4 billion. Operating income was flat at $1.8 billion.

Season three of “Thrones” sold $23.2 million in Blu-ray Disc units since its Feb. 18, 2014, retail release. It sold another $17.5 million on DVD, according to The-Numbers.com. The show was the only TV program, in addition to Downton Abbey: Season Four, to rank in the top 100 selling DVDs of 2014.

HBO said “Thrones” initial broadcasts in 2014 were watched by an average of 19 million viewers, followed by “True Detective,” with 12 million weekly viewers — the latter a record for a freshman HBO series.

HBO CEO Richard Plepler said the channel’s first-ever SVOD license agreement with Amazon Prime for select catalog programs has “exceeded” expectations while helping monetizing content older than three years.

“We thought it was a wonderful opportunity to have 70 million non-HBO homes have a chance to sample some our best programming,” Plepler said. “We think that will have a catalytic effect driving people back to the [pay-TV] network."

Indeed, HBO (including Cinemax) had the largest domestic subscribers growth in 30 years.

“A lot of factors contributed to that. But I think Amazon might have been one of them,” Plepler said.

When asked about HBO’s pending OTT platform launching later this year, the CEO said a launch date had been finalized, but he didn't disclose it. More importantly, Plepler said the service represented an opportunity for distributors across different channels to market their respective platforms. 

“Quite obviously, it’s a premium product. And will be priced accordingly,” he said.

John Martin, CEO of Turner Networks, said the reason people are leaving the multichannel universe, or cord-cutting, is because they can’t afford it or they don’t think there’s enough value in the offerings that are currently being provided by the MVPDs.

Martin said a portion of the 10 million broadband-only homes in the U.S. would sign up for pay-TV if the offerings were more affordable and provided greater flexibility.

He said Dish Network’s nascent Sling TV online venture ($20/month with no contract) was a good example of melding technology with consumer demand.

“It’s [also] the first [OTT] example,” Martin said, adding that current third-party attempts to market discounted bundled channel packages online are hamstrung by retransmission contracts and largely perceived as subscriber retention tools.

“I think that’s going to change over time,” he said.

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