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State of the Screens

HBO Must Get Bigger and Broader, Says Its New Overseer

By July 18, 2018No Comments
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

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.