Seeking to accelerate the subscriber growth of its most valuable asset, Time Warner, Inc. is reportedly looking to expand the availability of broadband-only packages that feature access to HBO.
Time Warner caused a stir in October when it made the top premium cable network available through Comcast's (NASDAQ: CMCSA) $50-a-month "Internet Plus" package, a 25 Mbps service that also featured multiscreen access to 45 other linear channels.
Looking to seize a market of 10 million American broadband subscribers who don't simultaneously pay a video services bill, Time Warner may launch HBO through similar broadband-only packages offered by other ISPs, reports Bloomberg, citing unnamed sources.
HBO is the largest subscription programming service in the world, with nearly 127 million customers. But Netflix (NASDAQ: NFLX) is expanding fast, having just eclipsed 50 million subs globally and still deploying rapidly across Europe and Latin America.
Making HBO available through Internet-only means poses threats to Time Warner's pay-TV partners, who could see cannibalization of their core video subscriber bases. Comcast, however, has been strategic in its deployment of Internet Plus, putting it into markets like San Francisco, where the upside usurps the downside.
For Time Warner, the potential of expanding HBO's reach beyond video services is particularly relevant in regions like Europe, where only about 40 percent of homes have pay-TV services.
As Bloomberg notes, HBO Nordic has been available without a video subscription for several years, generating 380,000 subscribers not just for broadband services, but for pay-TV ones, as well.
Bloomberg's report comes as an analyst last week told one of the news service's radio programs that 21st Century Fox, which is trying to buy Time Warner, is mainly interested in expanding HBO by taking it further out of the pay-TV bubble.
- read this Bloomberg report
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