Posts for 'HBO Now'

Netflix has become the poster child of how over-the-top delivery of premium content can create a hugely valuable business. But in Netflix’s shadow, traditional premium TV networks including HBO and Showtime are being revitalized by OTT delivery which is changing the dynamics of subscription TV.

Both HBO and Showtime recently reported record subscriber levels for 2017, mainly attributable to online growth. HBO and Cinemax gained over 5 million subscribers in the U.S., driving its domestic base to 49 million. Half of the online subs came from HBO Now, its standalone streaming service, with the other half coming from distributors like Amazon Channels and skinny bundles like DirecTV Now.

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I’m pleased to present the 406th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

First up this week, Colin and I share our experiences live-streaming the Super Bowl. Both of us were on the road and were extremely impressed.  Except for latency of up to a minute or so, neither of us experienced any buffering or pixelation. In short, it was nearly a TV-like experience and really demonstrates how far live-streaming at scale has come.

We then shift gears to discuss strong growth at HBO Now, which just reported hitting the 5 million subscriber mark at end of 2017. HBO Now is benefiting from not being a “buy-through” on top of expensive pay-TV services. By going direct-to-subscriber, HBO Now has made its product much more accessible. We suspect that Amazon Channels and AT&T (which strongly promoted HBO Now in 2017), were pivotal to growth.

(Apologies, our audio quality isn’t that good this week).

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I’m pleased to present the 357th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

First up, Colin shares his experiences streaming the Super Bowl on numerous services and devices. Overall the video quality was pretty strong, especially on Sling TV. Colin also used the Fox VR app with Google Cardboard and relays his reactions.

While Super Bowl LI was one of the best-viewed in history, NFL ratings this past season declined across the board and we discuss what’s likely happening. As I wrote earlier this week, the wide adoption of ad-free SVOD feels like a major culprit.

We then transition HBO Now, which Time Warner reported earlier this week now has over 2 million subscribers. Neither Colin nor I are super-impressed with HBO Now’s growth, especially by comparison with Netflix’s performance in the same time period. We both think HBO Now’s relatively high price of $15/month is the key issue.

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Time Warner’s CEO Jeff Bewkes said on this morning’s earnings call that HBO Now has passed the 2 million subscriber mark. That would be an increase from the 800K HBO Now had at the end of 2015.

On the one hand, gaining 2 million subscribers since launching HBO Now in April, 2015 is a positive sign of market acceptance for the SVOD service, which entered the market relatively late. But on the other hand, the pace of HBO Now’s monthly subscriber additions seems static, suggesting the service has not been able to accelerate its momentum.

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When HBO Now launched in April, 2015, its $14.99/month price was well above competing SVOD services such as Netflix ($11.99/month), Hulu (ad-free $11.99/month) and Amazon ($8.99/month or included with Prime for $99/year). On the one hand, an argument could be made that an HBO subscription is more valuable due to HBO’s rich library and therefore should be priced higher than newer competitors. But HBO’s market-skimming high price strategy means its more aggressively priced competitors are growing far faster than HBO, enabling them to have greater scale, which will be the key to future success.

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On yesterday’s Time Warner Q4 ’15 earnings call, HBO CEO Richard Plepler said that HBO Now as at “about 800,000 paying subscribers.” It was the first specific subscriber number the company has shared since launching in April, 2015. While Plepler positioned the 800K as significant, no surprise, given HBO Now’s expectations, there’s been much debate about whether the 800K is in fact, disappointing.

I’ve been bullish on HBO Now’s opportunity since its launch, but I think there are a number of things that held things back during the launch year. Most significant is lack of marketing and promotion. HBO Now came out of the gate strong, launching with Apple TV and establishing a presence both online and offline. In those first few months it was hard to miss an ad for HBO Now.

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I'm pleased to present the 303rd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

In this week’s podcast Colin and I discuss our top 10 online video stories of 2015. A lot happened this year and it’s been tons of fun to cover and try to make sense of it. If you disagree with any of our choices, then as always, we welcome your feedback.

We’re going to try to slip in one year-end podcast next week, but in case you’re heading out early for the holidays, Colin and I would like to thank all of our listeners for tuning into our podcast this year, and wish all of you happy holidays!

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I'm pleased to present the 295th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

First up this week we dig into Yahoo’s decision to write off $42 million related to 3 of its long-form original programs, including the high-profile “Community.” As Colin and I explain, Yahoo faced a lot of headwinds from the start in making these a success. Yahoo’s bellyflop is actually not a big surprise and it’s a yellow flag for others interested in providing long-form content.

We then transition to talking about why HBO Now’s distribution with large pay-TV operators / broadband ISPs is stymied. At the WSJD conference this week, HBO CEO Richard Plepler lamented the company’s lack of progress. But as I explain, HBO Now represents more cord-cutting risk than upside opportunity to most operators (for more color on that, see here). Colin disagrees and thinks operators should be more aggressive. We have a healthy debate.

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Research released late last week by Parks Associates, which revealed high levels of churn for many smaller SVOD services, reinforced for me that many of these services are at risk of being seen as little more than transactional VOD opportunities by consumers. If this occurs it would have huge implications for both the SVOD services and larger ecosystem.

First, to review the research, Parks found that for SVOD services other than Netflix, Hulu and Amazon, the churn rate over the past 12 months was equal to 60% of those who subscribed to such services. For Hulu Plus, 7% of U.S. broadband subscribers cancelled their subscription in the past 12 months (equaling churn of half or more of Hulu Plus’s subscribers). Parks estimated Amazon’s churn at around 25% (though that’s clouded by value of the overall Prime service). Only Netflix fared well, with churn in the past 12 months running around 9% of its subscriber base. Note, none of these SVOD services publicly disclose their churn rates.

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On its Q1 '15 earnings call this morning, Time Warner executives provided the first color on the rollout of HBO Now, HBO's recently launched standalone broadband service. HBO CEO Richard Plepler said the company is "seeing absolutely no intrusion into people inside the (pay-TV) ecosystem, none at all. It's all additive."

Plepler and Time Warner executives have asserted from the start that HBO Now is solely targeting the 10-15 million broadband-only homes in the U.S., although they have periodically alluded to wanting to address ALL 70-80 million non-HBO subscribers (who of course are already pay-TV subscribers). I have argued in the past that, because of how compelling HBO Now is, it will almost certainly drive some level of cord-shaving and cord-cutting and is actually a substantial threat to the sports ecosystem.

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The problem-plagued HBO Nordic service, launched in late 2012, has received a full revamp with help from U.S. technology provider Clearleap. Even though there's been a lot of recent focus on HBO Now's launch here in the U.S., the original standalone HBO streaming service was actually HBO Nordic, which is available in Denmark, Finland, Norway and Sweden.

Unfortunately for HBO Nordic, the service had issues from the start, including buggy apps, lack of support for key streaming devices, onerous terms and conditions, and an incomplete catalog, all resulting in disappointing reviews and frustrated subscribers.

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I'm pleased to present the 268th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

HBO Now launched this week and after giving it multiple tryouts, I'm very impressed. As we discuss, and as I've written previously (here, here and here) I think HBO Now is going to be a big winner, and is going to gain subscribers well beyond the 10 million broadband-only households that HBO CEO Richard Plepler relentlessly says are its target market.

In particular, I think entertainment-focused, budget-minded and younger viewers will find HBO Now very attractive (especially in combination with Netflix and other OTT services). Inevitably this will accelerate cord-shaving, cord-cutting and cord-nevering.

Colin agrees and shares his own HBO experience this week, using it via Sling TV. This is not HBO Now, but rather HBO content integrated into Sling TV (including the linear feed). Colin reports it too was a mostly positive experience. The ability to access HBO via a "skinny bundle" creates still further pressure on the traditional pay-TV model.

All in all, Colin and I believe HBO Now will become a key driver of change in the pay-TV industry. The HBO Now storm is blowing in; just how much havoc it will wreak in the industry is the big open question.

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Today, a deviation from my typical VideoNuze post. Peering into my crystal ball, I foresee a slew of mainstream media articles about HBO Now coming as early as May, just a month following its launch. These articles in the NY Times, USA Today, WSJ, etc. will highlight individuals who have subscribed to HBO Now and how the service is impacting the pay-TV ecosystem.

Importantly, these articles will underscore how, despite HBO's assertion that HBO Now is targeted solely to broadband-only households and is supposed to be beneficial for pay-TV/broadband ISP partners, in reality the service has much broader consumer appeal and hurts HBO's traditional partners.

Below I'm sharing an example of such an article. In it you'll read about Kristin Holter, the Gehls and Bill Aiken. They are fictitious people, but are meant to be very representative of the kinds of people who will subscribe to HBO Now and how their decisions will affect the pay-TV industry.

Using the framework for assessing the potential of new OTT services that I shared last week, HBO Now scores by far the highest for me. Assuming it works as I expect it will, I continue to be very bullish on HBO Now, which I see as having far-ranging ripple effects, especially for non-sports fans. I recognize I'm going a little out on a limb with the below article, but I'm pretty convinced that directionally it's a great example of the type of media coverage HBO Now will be receiving very soon.

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Just A Month Old, HBO Now is Already Roiling the Pay-TV Industry

May 3, 2015

It wasn't supposed to be like this.

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As the pace of new OTT services has ramped up, I've been asked by a lot of industry colleagues and press which ones I believe have the most and least potential. It's a great question, and while I don't pretend to have a crystal ball, I certainly have my own opinions (as VideoNuze readers know!). But even as I've been sharing my thoughts, I've increasingly been asking myself - why is it, for example, that I'm more bullish about some (e.g. HBO Now), more skeptical about others (e.g. Sling TV) and more willing to be open-minded about still others (e.g. Apple's and Verizon's TV services)?

That's led me to think more rigorously about the criteria that I'm personally using to evaluate the potential of these new OTT services. It may be obvious, but when each of us makes judgments about a product or service, we're doing so against some implicit set of criteria. The challenge with all these OTT services is that a lot is still unknown about them and about consumers' reactions to them. On top of this the market is very dynamic. Nonetheless, I think it's still possible to create a set of criteria against which these new OTT services can be more explicitly evaluated (and re-evaluated as more information about them is known).

With that in mind, below I have shared 9 proposed criteria that I think are important in assessing these new (and existing) services' potential (there may be other criteria too!). By scoring each OTT service on a 1-5 scale against each criteria (i.e. 1 meaning "weak" or "not distinctive" and 5 meaning "strong" or "highly distinctive," their respective total scores emerge, forming a picture of potential winners and losers. If you're interested in using these criteria to do your own scoring, I have created a handy Google doc. Feel free to access, export to Excel, modify, etc. I'm interested in your results and comparing notes.

Here are my 9 proposed criteria:

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