Time Warner is warming to the idea of selling standalone subscriptions to HBO Go.
Time Warner CEO Jeff Bewkes said during a talk at a Goldman Sachs conference on Wednesday that the company has had success with a trial run that offers some broadband Internet customers a cheaper cable package with just a few channels and HBO. Time Warner owns the premium channel.
As of now, people who don't have cable but want to watch "Game of Thrones" or "Last Week Tonight with John Oliver" have to either buy a cable package or borrow a login to HBO Go, the channel's streaming service, from another customer. But Bewkes seemed to imply there may come a time when cord-cutting customers will able to buy a subscription to HBO Go the same way they buy a Netflix membership, without having to pay for TV channels or a cable modem at the same time.
Bewkes told the group that the "broadband opportunity is getting quite a bit bigger," saying that customers are willing to pay a little more for Internet if it comes with a handful of cable channels including HBO, according to transcript sent to The Huffington Post by HBO.
"[It] is becoming more viable, more interesting," Bewkes said at the conference. “We’re seriously considering what is the best way to deal with online distribution, but I don’t have anything to announce about it today.”
Right now, HBO’s deals with pay-TV providers remain lucrative. And if people can get HBO without cable, they may buy only Internet and downgrade their cable packages.
"We would want to move in such a way that continues to give our partners the ability to sell their product," Keith Cocozza, an HBO spokesman, told HuffPost. "We're just not ready yet."
But as Hulu grows and Netflix beefs up its original programming with shows such as “Orange Is The New Black” and “House of Cards,” HBO is under pressure to expand its reach.
For now, HBO has remained focused on getting more viewers hooked on its programming. In January, HBO CEO Richard Plepler said he didn’t mind that people shared their passwords to let non-subscribers access HBO Go.
“It presents the brand to people and gives them an opportunity, hopefully, to become addicted to it,” Plepler said at a BuzzFeed Brews talk. “What we’re in the business of doing is building addicts, building video addicts.”
Gene Hoffman, chief executive of Vindicia, a company that helps content creators bill subscribers, told HuffPost that as Netflix and Hulu continue racking up customers, it will be harder for HBO to compete if it remains tied to a cable provider.
“HBO right now is a pawn in a battle to get extra dollars out of broadband customers," Hoffman said, "and it’s not in HBO’s interest to remain a pawn in that battle long term.”
The rising number of HBO “addicts” may be convincing the company to push its product broadly to Internet customers. But, as Capital New York media reporter Alex Weprin points out, standalone subscriptions will require customers to pay up to get their fix. And HBO, like Netflix and Hulu, would have to find a way to crack down on freeloaders using someone else’s password.
@AlexCKaufman The rub: right now HBO doesn't care about freeloaders. If they offer this service, they will start to crack down.
— Alex Weprin (@alexweprin) September 11, 2014