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HBO Eyeing Digital HD Card in the U.K.

16 Feb, 2015 By: Erik Gruenwedel

With a major domestic branding-affirmation campaign underway to pique HBO interest among non-subscribers, the premium channel’s home entertainment unit is considering adopting its Digital HD gift card retail strategy in the United Kingdom.

A traditional naysayer to licensing content (and long-term digital distribution opportunities to Netflix), HBO has doubled-down on mining physical media revenue through expanding digital prowess.

Launched last month at Costco Wholesale, the $23.99 HBO Digital HD card acts as a starter kit for consumers wanting to test the waters of digital content ownership (and UltraViolet functionality). The card also doubles as a gift card, since the recipient can choose among select HBO programs he or she wants to stream from the cloud.

HBO also began offering digital access to complete TV episodes of select programs as bonus material on Blu-ray Disc releases. And later this year HBO will bow a standalone over-the-top video service.

In the U.K., which is considered the third-largest packaged media sellthrough market in the world after the United States and Japan, HBO discs continue to resonate among consumers. Indeed, sales of HBO discs have increased in the U.K. against a global backdrop of declining catalog discs, according to Sofia Chang, EVP and GM at HBO Home Entertainment.

With both Amazon Prime Instant Video (which has HBO catalog) and Netflix firmly entrenched, the U.K. is an ideal retail market to expand the HBO Digital HD card.

In an interview with Cue Entertainment in the U.K., Chang said HBO is working with various packaging concepts to determine how best to market the cards during non-holiday periods. Ideas include selling digital access to one show instead of a selection of programming.

“This would be more about buying for yourself as opposed to for others,” Chang said.

The executive reportedly was also in the U.K. to laud Warner Home Entertainment, which sells and distributes HBO discs in the region. In fact, HBO has the largest TV market share among U.S. studios operating in the U.K., behind the BBC.

Top-selling U.K. discs includes “Game of Thrones,” “True Detective,” “True Blood,” and catalog titles “The Wire” and “The Sopranos.” Game of Thrones: The Complete Third Season reportedly generated £25 million ($38.4 million) in revenue in 2014 — tops for any TV product in the U.K.

With “Thrones” broadcasts in the region via satellite distributor BSkyB — the largest commercial pay-TV operator in the U.K., Chang eyes the period drama’s mushrooming appeal to pay dividends at retail.

“‘Game of Thrones’ is now like a year-round brand with the way the releases are staggered through broadcast, digital and physical, there is always something going on,” Chang told Cue.

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