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HBO Now Reaches 800,000 Subscribers

10 Feb, 2016 By: Erik Gruenwedel

Warner Bros. eyeing altered theatrical windows utilizing HBO

It’s an on-demand world or bust for Time Warner CEO Jeff Bewkes.

While the executive has infamously sparred over the years with the subscription video-on-demand business model (i.e. Netflix) regarding content access, he recognizes that Netflix’s Reed Hastings and Ted Sarandos’ drive toward content ubiquity is not without its merits.

“Consumers want VOD on whatever show or window they’re watching. And we’re basically moving to satisfy consumer demand,” Bewkes said on the company's Feb. 10 fiscal call.

Indeed, Keven Tsujihara, CEO of Warner Bros., said the studio is looking at the changes in television viewing habits as they relate to theatrical releases and retail’s expedited access to them through shortened windows.

“We continue to look at it. I think the industry is looking at it. And it would also affect the pay-TV window,” Tsujihara said.

Bewkes said smaller theatrical windows would be a boon to HBO’s legacy as a movie distributor. Movies — not original programming — generate more than 70% of all HBO viewing.

“If films get more available in your home on demand, it’s going to make the movie aspect of [HBO] more valuable. That’s a good thing.”

HBO continues to aggressively roll out over-the-top video options overseas, most recently in Latin America and later this year in Spain. HBO Now, the premium network’s eight-month-old domestic streaming service, has reached 800,000 paying subscribers, which keeps it a distant fourth behind Netflix, Amazon Prime Video and Hulu Plus.

HBO CEO Richard Plepler said HBO Now is just one component of the premium channel’s growth strategy targeting incremental subscribers and revenue in-and-out of the pay-TV ecosystem. He said there are no plans to lower the SVOD service’s $14.99 monthly price — the highest among all streaming services.

“We think our [Now] price makes sense and we’ll access it as we go forward. But what we’re seeing is an enormous amount of [HBO] growth in [the pay-TV] ecosystem,” Plepler said, adding that HBO has grown domestic subscribers by 8 million over the past four years, and is open to incorporating the brand in any distribution channel.

“There’s growth opportunities for [pay-TV distributors] and parenthetical growth opportunities for us. That’s what we’re excited about.”

Bewkes said there will continue to be rapid innovation with user-interfaces and content access among pay-TV operators and new platforms.

“It’s becoming crystal clear consumers want the ability to watch their favorite show or their favorite network on demand across whatever platform their watching, whatever window it is, whether it’s a new show current season, whether it’s a 1- or 2-year-old show, they want to see it on demand,” Bewkes said. 

“We want to make sure our networks have the flexibility to meet that consumer demand.”

Bewkes declined to comment on media speculation regarding Time Warner’s possible ownership stake interest in Hulu Plus. He said Time Warner is “actively” pursuing undisclosed opportunities outside the ecosystem … looking for more VOD incorporating HBO, Turner or Warner content.

“We think it’s a good thing that we have new entrants offering more on demand,” Bewkes said.

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