2 Comments

Summary:

With HBO’s relationship with cable providers rockier than usual, thanks to its subscriber base dropping by 1.5 million, statements by Chairman and CEO Jeff Bewkes indicate that the premium cable offering may be looking for alternative means of distribution. But that doesn’t include Netflix.

hbo.com screenshot

Even though The Sopranos and The Wire ended years ago, HBO’s pedigree for challenging, even revolutionary television has persisted. However, while its outlook toward distribution is not nearly as groundbreaking as its content, HBO may soon be open to change.

A month ago, Time Warner CEO Jeff Bewkes told investors that because HBO had “a very good relationship” with cable distributors, it was unlikely the company would exercise its option to offer programming directly to consumers. But at a conference yesterday, Bewkes didn’t speak as favorably towards that relationship, as the Wall Street Journal reports:

“Mr. Bewkes said that if HBO becomes ‘overly hindered by having it only available to you in $60, $80 or $100 packages,’ it could be sold separately through the channel’s existing distributors, like cable and satellite companies, or new distributors.”

HBO’s growing interest in expanding its distribution makes sense as working with the old distributors hasn’t done them any favors recently. HBO and sister channel Cinemax have lost 1.5 million subscribers over the last year, which the company attributed to Dish Network promotional offerings and DirecTV’s lack of push.

“New distributors” wouldn’t include Netflix, as Bewkes is one of the Hollywood execs who believes that Netflix is damaging their business model. Back in November, he said:

“We’re not going forward to sales and licensing agreements within like Netflix or Hulu in the context of what is best, in this case, for Warner Bros. on providing the most healthy revenue support for the licensing that we do because there a lot of things that have been proposed in ‘digital’ that are really not in the interest of the studio…”

The term “new distributors” though, indicates that if HBO were to go over-the-top with its content, it wouldn’t be doing so on its own. Who might it partner with? There are plenty of suspects, but game consoles could be key to its strategy, since Microsoft is currently negotiating to bring TV networks to its Xbox Live service.

If HBO is able to strike such a deal for its HBO Go service, that would make Microsoft a cable provider (which isn’t too much of a stretch, given that it has more subscribers than Comcast), and finally make HBO available to cord cutters.

Related GigaOm Pro Content (subscription required):

You're subscribed! If you like, you can update your settings

Related stories

  1. I really hope to see this. HBO should launch it’s own Hulu clone and let customers buy directly. Most importantly it should let us pay for access on a show-by-show basis. That would allow them to know directly what revenue they are getting on a show basis and would also allow them to charge different rates per show. That would allow them to be profitable with show that have a small but rabid fan base vs. broader market shows where the fans are not so strong.

    Share
  2. “New Distributers” could also include iTunes. And who’s to say that they couldn’t do a deal with Netflix where subscribers could pay for an upgraded premium plan that included HBO content. I’d pay extra to have HBO added to my Netflix.

    Share

Comments have been disabled for this post