Wonder how operators are feeling about HBO’s over-the-top offering HBO Now? Especially about how they’ll be able to compete against the $14.99 price tag (and the first month free) that Time Warner – which owns HBO — has hung on the OTT play?
Scheduled to kick off next month, just in time for the season premier of Game of Thrones, HBO has stirred up a lot of activity… among its pay-TV partners especially.
DirecTV is the latest service provider to jump into the scramble, offering its subscribers a $50 Visa card if they subscribe to HBO on DirecTV and keep it for three months.
The satellite TV provider currently charges $17.99 a month for HBO, and – as do other service providers – it gets to keep about half of that subscription price.
Will the promise of a $50 rebate be enough to convince subs to sign up? Will it hamstring HBO’s exclusive deal (for the first three months) with Apple for HBO Now?
One thing it will do is cut into DTV’s Q2 profits and increase its subscriber acquisition costs. How much is anybody’s guess at this point.
While Time Warner says it’s deploying HBO Now to reach the estimated 10 million homes in the United States that are broadband subscribers only, many of them Millennial cord-nevers and some among the cord-cutting ranks – there’s a general worry that he audience may be a little broader.
Apple has kicked off an online ad campaign to support the HBO Now deal, saying, “You’ll never watch HBO the same way again. In fact you’ll never watch TV the same way again.”
The ad goes on to point out that users can subscribe to HBO from their Apple TV (which is being offered at 30% off, or $69) or iOS device, “no cable or satellite subscription required.” And, the deal doesn’t require a contract.
As they say in the old Westerns: “Them’s fightin’ words.” At least to pay-TV providers who already are feeling the pinch of decaying margins on their video product.
So, there’s no doubt operators are worried. But they’re also maybe a little ticked off.
Current pay-TV subscribers who also subscribe to broadband may see the $15 OTT deal as equal to, or better, than the one they’re already getting from their service provider.
That’s why DirecTV isn’t alone in its special offer for HBO.
Comcast recently dropped its $18.95 price to $15 for current subscribers and offered new subscribers the channel for $10 a month, according to a published report from TVPredictions.com.
Among other providers the site checked:
Verizon, which prices non-promotional HBO at $19.99 a month, recently offered an extended promo price of $9.99 for 12 months (it had been six months).
Time Warner Cable is offering a promo price of $9.99 if ordered online, compared to its standard $15.99.
Cox has a promotion offering six months for $10 a month, bumping up to $15.99 thereafter.
Dish Network charges $19 a month for HBO, and, so far, isn’t offering any discounted deals. That could be, of course, because it’s looking for its own OTT product, the $20 a month Sling TV, to make a deal that would allow it to rep HBO Now… a marriage made in pay-TV and cord never heaven.