This is an important issue for Time Warner. It makes most of its money from pay TV channels — and could endanger that cash stream if distributors decide to retaliate over the company’s just-unveiled HBO Now streaming initiative. The $14.99-a-month plan will give cord cutters an opportunity to watch HBO without a cable or satellite subscription.
CEO Jeff Bewkes says not to worry, although he still has some selling to do. Most pay TV distributors “are on board,” he told investors at the Deutsche Bank Media, Internet & Telecom Conference. But “we have some who believe it’s competitive with them and that they should have maintained their ability to be the sole place to get HBO.”
Bewkes says that Time Warner has “done what we can” to persuade them that it won’t hurt them — and that it might even help, for example if they package HBO Now with cable broadband services. “They’ll come around because it’s in their interest to take this powerful product and sell it.”
Indeed, he chided exiting cable and satellite distributors who have not done enough to promote HBO. “It very much invigorates their offering of high-end packages.” Some 70 million basic customers do not subscribe to the premium network. “Those should be HBO homes.” It’s a product that “can enjoy more viewership and loyalty if it was offered and promoted correctly.”
The CEO says it made sense for Time Warner to launch HBO Now because “we all know that all users, especially younger users, are going to watch their favorite programming on their favorite device.” He also took a swipe at Netflix, noting that about half of the 10 million homes that buy broadband but not pay TV subscribe to “something that’s like HBO but not as good.” That’s another reason “we ought to make it available.”
Bewkes praised the alliance with Apple, which will offer HBO Now via Apple TV. “They’re so good and energetic in marketing….We thought that was a good partner to elevate and get the value of HBO out there.”
HBO Now will be a carbon copy of HBO Go and will launch sometime before April 12, when the new season of Game Of Thrones begins.