Time Warner (s TWX) has been aggressively touting its TV Everywhere strategy, which enables cable subscribers to view certain online content from cable networks that they’ve already paid for. And it’s invested heavily in building its HBO Go and Max Go video offerings so that partners like Comcast (s CMCSA) and Verizon (s VZ) can give their subscribers access to these value-added services.
But on today’s earnings call, an interesting thing happened: Chairman and CEO Jeff Bewkes didn’t outright dismiss the possibility of going direct to consumers with an online offering, saying the premium cable network could do so if its distribution partners don’t roll out authenticated services quickly enough. In response to an analyst asking if HBO could market its online offering direct to consumers, Bewkes said:
“[O]n the question you raised about HBO going direct, we do have the ability to do that. And it’s not something that we have decided to do today because… we have a very good relationship… [with] all the different distributors… If that doesn’t work well, or speedily enough, then we have the option of adding a direct sale of HBO.”
While Bewkes essentially said the company had no immediate plans for a direct-to-consumer offering, what’s surprising is that he didn’t dismiss the idea out of hand. After all, Time Warner — more than most other media conglomerates — has been aggressively banging the drum for authenticated video services tied to its distribution partners’ cable subscriptions. Along with Comcast, Time Warner originated the idea of TV Everywhere, and has been a big advocate of the initiative ever since. So the possibility of a consumer-facing online video offering seems like a bit of an about-face for HBO.
What’s clear is that if Time Warner does make a play for HBO subscribers with an over-the-top offering, it won’t be doing so by partnering with Netflix, (s NFLX) as cable networks Starz and Epix had. In fact, it would most likely be offering the service as a competitor to Netflix’s Watch Instantly streaming service. Time Warner executives have been fairly critical of other content owners for making their broadband video content available online through Netflix and Hulu. Referring to Warner Bros. digital distribution on the call, Bewkes said:
“[W]e absolutely evaluate everything… [but] 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… And as you can tell by the things we’ve done and not done, we don’t agree with some of the moves that our studio competitors have taken. We think it’s bad for the value of their content.”
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