GOT12

HBO Must Get Bigger and Broader, Says Its New Overseer

Big changes for HBO? HBO was one of the crown jewels for AT&T when they acquired Time Warner for $85.5B. Now the question is what changes are coming now that it is part of the AT&T family.

Key goal: Increase the amount of time that subscribers spend on the platform through the increased production of content.

Quote from John Stankey- CEO @ Warner Media:
“It’s going to be a tough year… It’s going to be a lot of work to alter and change direction a little bit.”

“We need hours a day,” Mr. Stankey said, referring to the time viewers spend watching HBO programs. “It’s not hours a week, and it’s not hours a month. We need hours a day. You are competing with devices that sit in people’s hands that capture their attention every 15 minutes.”

HBO subscribers:
1) Non-U.S. — 88M (62%)
2) U.S. — 54M (38%)
3) Total — 142M

HBO subscribers (U.S. only):
1)
Traditional — 49M (91%)
2) Online — 5M (9%)

Potential setback: Justice Department appeals Time Warner-AT&T merger approval

Flashback #1: Streaming-only homes drive 5M increase in HBO Now subs

It took HBO 2 years to reach 2M subscribers. They added the next 3M in 1 year!

Higher margin. Cable companies keep ≈ 50% of the monthly HBO fee. This means that HBO is keeping a greater share of the subscription revenue from their direct customers.

Flashback #2: ‘Game of Thrones’ Finale Sets Ratings Record

Linear TV vs. Streaming:
1) Linear TV — 12.1m (73%)
2) Streaming — 4.4m (27%)
3) Total — 16.5M

How does this compare to an event like the Super Bowl?

Total Viewers:
1) Super Bowl: 113m (7X)
2) Game of Thrones: 17m

Television:
1) Super Bowl: 111m (9X)
2) Game of Thrones: 12m

Streaming:
1) Super Bowl: 2m
2) Game of Thrones: 4m (3X)

Share from Streaming:
1) Super Bowl: 2%
2) Game of Thrones: 27%

More #1: Steve Case: Media M&A Frenzy Reflects Original ‘Vision’ of AOL-Time Warner Merger

More #2: ‘Either it happens or TV gets decimated’: Insiders are split on AT&T’s chances of building an ad platform for the entire TV industry

More #3: How AT&T could use Time Warner shows and movies to compete with Disney and Netflix

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