Cable Operators

HBO Gets ‘Go’ Signs

1/02/2012 12:01 AM Eastern

After more than a year of wrangling, HBO
has clinched deals for its authenticated TV Everywhere
services — HBO Go and Max Go — with the last two big
holdouts: Time Warner Cable and Cablevision Systems.

The premium programmer will ring in 2012 with the
TV Everywhere services soon available to 98% of U.S. subscribers,
according to HBO co-president Eric Kessler.

The goal of HBO Go, as with other TV Everywhere services,
is to encourage subscribers to keep paying for the TV
service by bundling in unlimited access to a trove of content
on other devices.

However, Kessler said it’s still too early to determine
how effective HBO Go has been in retaining subscribers
or attracting new ones. “But given the positive response,
we think it can mean nothing but good things for the [subscriber]
life cycle down the road,” he said, speaking at
VideoNuze’s Nov. 30 VideoSchmooze event in New York.

None of the companies would comment officially on
what the sticking points were between HBO and TWC and
Cablevision. But industry sources indicated the issues related
to branding, promotion and distribution rights covering
the MSOs’ own TV apps.

Even among affiliates that offer HBO Go, there’s still negotiating
to be done. Comcast and DirecTV, for example,
currently do not allow their subscribers to log in to the service
through Roku’s Internet set-tops.

According to sources familiar with Comcast’s strategy,
HBO has not yet agreed to all of the
conditions the MSO requires of TV
Everywhere partners, such as how
subscriber information is handled
on third-party devices and websites.

TWC and HBO will run a brief
beta trial, after which the services
are expected to launch sometime
in January to all Time Warner Cable
customers who subscribe to HBO.
“We’re very pleased to have completed an agreement that’s
good for our customers,” Susan Weinstein, TWC’s group vice
president of content acquisition, said in a statement.

Cablevision said it expects to launch HBO’s TV Everywhere
services in “the next few months.”

Bright House Networks, for its part, expects to launch
HBO Go and Max Go for subscribers in mid-January
through its agreement with Time Warner Cable, which lets
it take advantage of the larger MSO’s programming deals.
Bright House is hosting a “countdown sweepstakes” on its
Facebook page, offering prizes to customers.

As of press time last week (Dec. 29), TWC, Cablevision
and Bright House subs were not yet able to log in to HBO
Go. The service is currently available through 11 affiliates:
Comcast, DirecTV, Dish Network, Charter Communications,
Cox Communications, Verizon FiOS TV, AT&T Uverse,
Suddenlink Communications, WideOpenWest, RCN
and Massillon Cable.

As of November 2011, HBO had delivered some 98 million
streams through TV Everywhere services, according
to Kessler. Most of that streaming has come since the programmer’s
launch this May of HBO Go apps for iPhone,
iPad and Android smartphone devices, which have been
downloaded about 5 million times.

Over the course of a year, HBO has 10 million subscriber
transactions (adds and disconnects) through its affiliates.
The programmer has about 29 million U.S. subscribers. “As
with all subscription businesses with a life cycle, you’re
trying to extend the life cycle,” Kessler said. “If you can increase
the life cycle by a month, two months, three months
… times our wholesale rate, that’s a lot of money.”

So far, HBO has found the threat of cord-cutting to be
“minimal” and largely the result of macroeconomic conditions,
Kessler said. He noted that HBO subscribers watch
14% more television — 19 hours more per month — than
non-HBO households. “We’ve found HBO subscribers are
the last people to cut the cord. They just love television.”

About 55% of HBO Go viewing is on desktops or laptops,
with the remaining 45% on mobile devices. Of the mobile
usage, 55% is on iPads; 25% to 30% is on iPhones; and the
remainder on Android phones. Kessler said HBO plans to
debut an app for the Android 3.0 operating system (Honeycomb)
for tablets in the first quarter of 2012.

In terms of what subscribers watch, 70% to 72% of HBO
Go viewership been original programming, compared
with 33% on linear and 43% on video-on-demand. The
movies HBO Go users watch are mostly recent: 80% are
movies produced in 2009 or later, according to Kessler:
“They are not watching library content.”

HBO Go offers more than 1,400 titles online, including
every episode of every season of original HBO shows, including
current series Game of Thrones, True Blood and
Boardwalk Empire and older ones such as The Sopranos, Sex
and the City
and Deadwood, as well as movies, HBO original
films, miniseries, sports, documentaries and specials.

Max Go offers more than 400 titles of Cinemax programming
online, including hundreds of movies and the adultoriented
Max After Dark series.

November

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