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CEO: HBO Go Could Be Bundled With ISP Subscriptions

21 Mar, 2013 By: Erik Gruenwedel

HBO CEO Richard Plepler

On-demand streaming platform would be offered only to consumers who do not subscribe to a pay-TV service

HBO reportedly could soon make available its acclaimed HBO Go high-definition streaming platform to broadband consumers who don’t subscribe to a pay-TV service, according to CEO Richard Plepler.

HBO currently is bundled as a premium channel to subscribers of multichannel video program distributors, including cable, satellite and telecommunications. HBO Go is a Web-based add-on that enables HBO subscribers to watch new and catalog content on demand without additional charge.

“Maybe HBO Go, with our broadband partners, could evolve,” Plepler told Reuters, adding that "right now we have the right model. We would have to make the math work."

With high-definition resolution, coveted content and intuitive user interface, HBO Go has been suggested as a formidable rival to Netflix, Amazon Prime Instant Video as a stand-alone property. It does that now in Scandinavia where Netflix recently launched service.

Plepler envisions charging ISP subs as much as $15 a month on top of their broadband fees to access HBO Go.

HBO has about 114 million subscribers globally, including 70 million subs outside the United States. The premium TV service generates 25% of its total revenue abroad, which includes subscribers from international ventures, sales of programming to third-party licensors, foreign DVD sales and international sales of other HBO licensed products. HBO just launched two premium movie channels in India, in addition to the ongoing rollout of HBO Go service in Latin America.

Network revenue from HBO and Turner increased 5% ($166 million) to $3.7 billion during the most recent quarter, including increases of 7% ($144 million) in subscription revenues and 3% ($38 million) in advertising. Operating income rose 21% ($240 million) to $1.4 billion.

Earlier this month, Time Warner CEO Jeff Bewkes said he wouldn’t be opposed to offering HBO and Turner networks on SVOD provided they prove to be incremental — not substitutive — of current business models. Bewkes said putting HBO programming on a competing SVOD service wouldn’t generate the incremental revenue required to offset existing distribution channels.

“No one has come along with [the right plan] yet,” he said. “We would look at it. It would have to economically accretive to us. Everybody has theorized about it, but nobody has done it.”


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