HBO Now passes 2M subscribers amid strong quarter for Time Warner

Silicon Valley on iPad HBO Now app
In 2016, HBO launched OTT products on Microsoft’s Xbox platforms, new Samsung smart TVs, Sony’s PlayStation platforms and Amazon Prime Channels, in addition to its international expansion.

HBO Now has cracked the 2 million subscriber mark after hovering around 1 million subscribers for an extended period of time.

According to Variety, Time Warner CEO Jeff Bewkes confirmed the milestone for HBO’s direct-to-consumer service during today’s earnings call.

“We’re also really pleased with the growth of HBO’s domestic OTT product, and we expanded HBO’s international OTT footprint with launches in Spain, Brazil and Argentina in 2016,” said Bewkes in a statement.

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In 2016, HBO launched OTT products on Microsoft’s Xbox platforms, new Samsung smart TVs, Sony’s PlayStation platforms and Amazon Prime Channels, in addition to its international expansion, according to a news release.

The growth for HBO Now comes amid new quarterly earnings that saw all Time Warner divisions grow. The company’s most recent quarter ended with revenues up 11% to $7.9 billion.

RELATED: HBO Now ranks higher in customer satisfaction than Netflix: report

Operating income for the company increased 22% to $1.7 billion and adjusted operating income jumped 25% to $1.8 billion thanks to strong performances from HBO, Turner and Warner Bros.

At Turner, revenue climbed 7% to $2.8 billion largely due to an increase of 14% in subscription revenues and a 9% increase in content and other revenues. However, advertising revenues fell 2%.

Turner’s subscription revenues growth came from higher domestic rates—in spite of lower domestic subscribers—and growth at Turner’s international networks, partially offset by the impact of lower domestic subscribers. The company benefited from higher licensing revenues but domestic advertising was flat. Operating income for the segment increased 8% to $841 million as programming expenses were mostly flat.

At HBO, revenues increased 6% to $1.5 billion due to a 5% uptick in subscription revenues and a 7% increase in content and other revenues. Subscription revenues grew because of higher domestic rates and international growth while content and other revenues grew because of higher home entertainment revenues. Operating income for the segment increased 9% to $429 million but were hurt by increased distribution expenses related to the timing of home video releases. Meanwhile, programming expenses decreased 2% on lower programming charges but higher original programming costs.

At Warner Bros., revenues jumped a whopping 17% to $3.9 billion on the back of higher theatrical revenues for films including "Fantastic Beasts and Where to Find Them" and "The Accountant," and higher TV revenues coming out of increased licensing revenues and increased production. Operating income for the segment jumped 57% to $574 million.

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