HBO refutes report that HBO Now is struggling

Jon Snow in seemingly hopeless straits in this Game of Thrones battle scene. Image: HBO
"Game of Thrones" has been a recent growth driver for HBO. Image: HBO

HBO repudiated a New York Post report suggesting that HBO Now is struggling to attract subscribers, calling it “inaccurate.”

An HBO spokesperson told FierceBroadcasting that the report is “inaccurate” and pointed toward guidance provided by HBO CEO Richard Plepler during Time Warner’s third-quarter earnings call.

“On your OTT question, we couldn't be more pleased or enthusiastic about what we are seeing this year. We have seen substantial growth with HBO Now. We expect that to continue, of course, across all of our digital distribution, including HBO Go,” Plepler said.

Time Warner CEO Jeff Bewkes, speaking today at Business Insider’s Ignition conference, also pushed back against the report.

According to Variety, Bewkes said that the HBO Now subscriber numbers, which are hovering just over 1 million, may sound disappointing to the Post but not to HBO.

According to the Post, HBO intends to provide updated subscriber numbers for HBO Now during next year's fourth quarter/full year earnings report.

HBO Now, which launched in April 2015 as an Apple TV exclusive, sells for $15 per month. Since its launch, the service has expanded device compatibility to include Android TV, Amazon Fire TV, Roku, PlayStation, Xbox and Samsung smart TVs.

HBO also sells as an add-on tier for virtual MVPD services like Dish Network’s Sling TV and Sony’s PlayStation Vue, where it also retails for $15 per month. The price point matches that of Showtime OTT, which also has around 1 million subscribers. However, within the recently launched DirecTV Now live streaming service, HBO is available as a $5-per-month add-on.

RELATED: HBO for $5 a month? AT&T’s DirecTV Now offerings ‘aren’t going to make any money’

Combined with the $35 per month promotional price for DirecTV Now at launch, the low prices have some analysts questioning how DirecTV Now can function without losing money.

“By stacking their base package with all the best networks—likely a requirement for getting the programming contracts at all—they still have the same problem that was highlighted initially,” research firm MoffettNathanson wrote in a blog post. “Put simply, they aren’t going to make any money.”

AT&T, which is seeking approval of its $85 billion acquisition of HBO parent company Time Warner, seemed aware of the razor thin margins DirecTV Now will face from the outset.

AT&T CEO Randall Stephenson, speaking today at the UBS Global Media and Communications Conference, said DirecTV Now uptake has already exceeded his company’s expectations and that the currently narrow margins will help the service gain scale, which in turn will lead to bigger advertising opportunities within the burgeoning service.

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