Speaking in an Advertising Week session with Snap Inc. chief strategy officer Imran Khan and Hearst chief content officer Joanna Coles, HBO CEO Richard Plepler framed the network’s stand-alone OTT strategy as an unalloyed success.
“We put the lie to the idea that the pie couldn’t get bigger,” Plepler said. “People felt that people would drop HBO … but we have had less than 1% cannibalization of our core business.” Annual revenue from traditional MVPD distribution is about $4.5 billion.
Recent reports have pegged the number of subscribers to HBO Now at 3.5 million as of last summer, which puts it in front of the pack of network OTTs though still far from the level of linear HBO or non-linear streaming giants like Netflix.
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Plepler maintained the move into OTT followed in a long legacy of HBO’s innovation, noting it was an early proponent of multiplexing and video on demand in the 1990s and then set out to develop HBO Go in the early 2000s. When HBO Now was first being contemplated, he recalled, there were about 5 million broadband-only homes in the U.S. At the time of the service’s unveiling, in March 2015, that number had crept up to 8 million. Today, Plepler said, about 19.5 million homes have only broadband rather than traditional cable or satellite service.
“What we’ve seen over the past year is that we were more right than we imagined,” he said. The network has managed to persuade what he termed “undecided voters” to try HBO Now. Coles said that at $14.99 a month, “you’re expensive.” Plepler replied, “We think we’re a great value, Joanna.” In a potential HBO tagline, she cooed back, “You’re premium, darling.”
Khan devoted his stage time to touting the potency of brand messages on Snapchat, even if they last only five seconds. He cited several entertainment case studies, including Activision game Call of Duty; Warner Bros.’ Wonder Woman campaign, which enabled users to send Mother’s Day greetings with special themed lenses; and HBO’s own deployment of Snap filters for the most recent season of Game of Thrones. Warners’ Blade Runner is using of the new AR ads, Khan said.
“The world around us is changing,” he said. “If you want to deliver a message to your customer, you have to speak their language. If they want pictures, you have to give them pictures.”
Plepler said the network’s partnerships with Snap have helped it seed interest in “the cachet of the brand.” He said the passion both companies elicit from their core customers makes their team-ups like “merging addictive personalities.”
He told Coles he doesn’t worry about the glut of quality programming across the dial and in the streaming world. “In an age of clutter, when you come inside our curated home, you’re going to see something excellent,” he said. And with that, he handed his fellow speakers customized Game of Thrones T-shirts, which read “House of Coles” and “House of Khan.”
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