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HBO could one day be offered as a standalone service, not tied to any specific level of pay-TV subscription, Time Warner chief Jeff Bewkes said yesterday.
Such an a-la-carte offering by the leading premium pay-TV channel could boost HBO’s subscriber level above its stagnant 30 million and add some ka-ching to its bottom line.
But such a move would be cold comfort for cable companies who’ve come to rely on HBO’s allure to move customers up to more profitable digital tiers.
The 38-year-old channel has been a part of cable packages since it started, but with over-the-top platforms like Netflix, Google TV and Apple TV gaining in popularity and overall cable subscriptions falling — HBO is expected to report the loss of 1.5 million subscribers this year — Bewkes is putting cable on notice that he has other options.
If HBO was “overly hindered by having to be part of $60, $80 or $100 packages, we could [sell the channel] through existing distributors” or via new digital platforms, said Bewkes, speaking at a UBS media conference yesterday.
Before any radical change is offered to viewers, Bewkes will first see how a new product, HBO Go, fares in tandem with pay-TV partners.
HBO Go can be accessed on multiple screens if consumers provide a password that proves they are cable, satellite or telecom subscribers. For example, customers of Verizon FiOS, Comcast and AT&T’s Uverse can also watch HBO online.
The premium TV service, which spawned such pop culture icons as Tony Soprano and Carrie Bradshaw, is also working on tablet applications that would make it available on Apple’s iPads by the next quarter — and on smartphones at some point in 2011.
But if that plan doesn’t boost subscriptions beyond the current 30 million subscribers, then HBO might well cut the cord itself. The channel is in the midst of renegotiations with a major distributor it declined to name.
Even with its subscriber fall-off, HBO argues it is still on track for a year of record revenues. The company says most of the subscriber losses this year were promotional, meaning the customers were not paying for it.
Separately, Bewkes addressed investor concerns about highflying Netflix, whose current market cap of $10 billion is bigger than any individual Hollywood movie studio.
The movie-rental outfit could “be in competition [with other media companies], but they’ll have to buy all the rights” — meaning it will have to pay the same rights fees other cable channels buy for syndicated shows as part of multimillion-dollar packages, Bewkes said.
Netflix’s business model is “not sustainable” at its current $8-a-month price if it’s aiming for higher quality content, he added.
Netflix rose 4.3 percent, or $8.02, to $193.47, while Time Warner added 1.5 percent, or 46 cents, to $31.10.