HBO Now Going to Argentina4 Mar, 2016 By: Erik Gruenwedel
HBO Now, the pay-TV channel’s 9-month-old subscription streaming service, will be launching in Argentina later this year, coinciding with a previously-rumored launch in Brazil, CEO Richard Plepler told an investor group.
Speaking March 2 at at the Morgan Stanley Technology, Media & Telecom confab in San Francisco, Plepler said adding over-the-top video in Argentina is a new strategic dimension that buttresses similar efforts in Latin America.
“We saw a huge opportunity there,” Plepler said.
Indeed, with the Summer Olympics taking place in Rio De Janeiro, Brazil has long been a hotbed for video distribution, including DirecTV and Netflix. Unlike Netflix, which launched streaming service in 2011 to a host of challenges, including credit card issues, HBO is bowing subscription streaming with unnamed local affiliates.
“Brazil is the biggest business in Latin America. 30 million broadband homes, 70 million TV homes. We have 30% penetration there. We think that penetration can go up. We think our basic business can feed into the premium [pay-TV] business, which is about 25%,” Plepler said.
The network is creating 173 hours of original programming in Latin America. Plepler said indigenous programming typically outperforms the best of HBO’s original domestic content.
“So we’re making that investment because we know it drives subscriber [growth] internationally and it drives subscriber satisfaction,” he said.
The executive reiterated HBO is not locked into a singular distribution model, preferring to distribute through affiliates, third-party licensing (China and Canada) or SVOD on a case-by-case basis.
“We follow the money,” he said.
With about 800,000 HBO Now subscribers, the service continues to target broadband-only households while supporting the brand among pay-TV distributors.
HBO’s domestic agenda includes renewing affiliate deals with high-profile pay-TV operators. Plepler said 97% of subs who have HBO in the traditional channel bundle do not leave the bundle for HBO Now. The streaming service will become available this year on PlayStation 4 and Xbox One.
Interestingly, despite market demand for original episodic programming, 71% of HBO viewing is movies across all platforms. Another 62% of on-demand usage is Hollywood movies. And 40% of HBO subs watch only movies. HBO just extended a distribution deal with Summit Entertainment through 2022.
“Look, we help our [pay-TV] distributors grow. They know that. Whether they’re doing it through skinny bundles, basic channel packages, or triple play packages, we make the bundles stickier and we help them expand their video business.To us it’s pretty clear and unimpeachable that [HBO Now] is additive,” Plepler said.