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HBO CEO: 'HBO Now' Additive to Cable

29 Apr, 2015 By: Erik Gruenwedel

Standalone subscription streaming service HBO Now has only been functional about three weeks but so far its potential negative impact on the multichannel video program distribution ecosystem is non-existent, HBO CEO Richard Plepler told analysts April 29 on Time Warner’s fiscal call.

The $15 monthly over-the-top video service is targeting a broadband-only market estimated at 10 million to 15 million. HBO contends the OTT service will reach an untapped market and encourage its adoption in the existing bundled channel system. Yet, critics contend HBO Now could undermine existing HBO cable subscriptions.

Plepler said initial signs indicate little attrition among HBO cable subscribers due to the OTT service. He said warming over concerned MVPDs remains a work in progress. 

“[HBO Now] got out of the gate very fast … and we are having what I would call very productive discussions with our traditional [cable] partners,” Plepler said.

The CEO said he expects to have deals in place by the end of the year with other MVPDs regarding HBO Now.

“I think they [pay-TV operators] understand and appreciate [that] there is a lot of growth for them as well as for us [with HBO Now],” Plepler said. “It’s an expansion of the pie.”

Meanwhile, when asked about ESPN’s lawsuit challenging Verizon’s new smaller-channel bundle FiOS Custom TV service, Time Warner CEO Jeff Bewkes declined to address the situation specifically — underscoring his changing mindset about pay-TV and subscription streaming.

“To the extent that distributors are able to create packages that are more attractive to consumers, that’s great,” Bewkes said. “As the world moves to offering more on-demand ways to see your favorite shows, all the networks are bringing video-on-demand into their network offerings.”

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