As Plepler pointed out, the company has had much better luck reaching out to digital partners than potential traditional partners. HBO Now is available through multiple digital players, including Roku, Chromecast, Apple TV, and Android devices. Cable providers, however, have steered clear, worrying that offering a standalone streaming service could cut into their profits.
Plepler countered that argument by claiming that tapping into the millions of broadband-only households that Comcast Corp., Charter Communications Inc., AT&T Inc., and others (including HBO’s own former sibling, Time Warner Cable) already do business with would open the door for HBO Now — while also earning a cut for the telecos. He was also quick to highlight the fact that less than one percent of HBO Now’s customers were pay-TV customers; therefore, he expects broadband providers to be able to expand their reach rather than to see their subscribers defect to streaming.
“Why wouldn’t you want to take a product like HBO … and make it a part of your package, and share the revenue with us?” asked Plepler. Apparently, the questions have been met with varying reactions, though. “We’re having better conversations with some than others,” shared the CEO.
For HBO, the decision to launch HBO Now came in response to changes in how people watch TV today, especially the rise of cord-cutting. “What people really want are bundles that don’t have 500 channels,” he said, explaining that pay-TV is shifting toward offering smaller bundles.
HBO Now launched in April and has become available on an increasing number of devices since then. Although the service was not yet profitable as of August, Time Warner execs revealed that everything was on track and that HBO Now is expected to become “highly profitable.” Getting broadband providers onboard would certainly be a big step.
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