Time Warner‘s premium channel is approaching the point where a change would pay off, but there’s no need to hurry, according to data from an online survey of 2,501 adults out today from Morgan Stanley’s Benjamin Swinburne. Some 44% of broadband-only subscribers in the poll say that they’d be willing to pay a monthly fee for HBO GO. That “ultimately lifts HBO‘s earnings power,” the analyst says. Wouldn’t it face tough competition from Netflix which has about 32M domestic subscribers vs HBO’s 30M? Not necessarily. About 40% of Netflix users also have HBO, which suggests that lots of people consider the services complementary. They also reach slightly different audiences: HBO customers tend to be richer and older than Netflix ones. And people like HBO’s shows. More than 35% of respondents said that HBO has the best original programming while less than 20% picked Netflix in the field of premium services.
As you’d expect, the big question is how much broadband-only subscribers would be willing to pay for HBO GO. Some 18% said they’d shell out $5 or less each month, while 21% would go up to $10, 4% would go to $15, and 1% would pay more than $15. If that’s not good enough for HBO’s number crunchers, then the company can sit tight and continue to just serve people who subscribe to cable or satellite TV. Even though we’re starting to see pay TV cord cutting and shaving, growth “has held or accelerated for HBO, Showtime, Starz, and Epix as [distributors] have increasingly turned to premiums to differentiate their video products,” Swinburne says, and “our survey shows unchanged intent to cancel premium services.”