HBO CEO Richard Plepler offered broad hints, in a televised interview last week, about his network’s deliberations to bypass cable and satellite distributors and sell its programming directly to consumers. While the discussion was couched in terms of HBO GO expansion and Netflix competition, Plepler’s remarks underscored how extensively HBO is preparing to leverage its brand in some sort of a broadband delivery scheme.
“We’re always thinking about optionality,” Plepler said non-committally about five minutes into the 40-minute interviewwith BuzzFeed business editor Peter Lauria. In the live-streamed interview, Plepler also unveiled plans to deliver HBO Go via Sony’s PlayStation game console.
Predictably, Plepler emphasized “the $4 billion worth of partnerships” HBO now has with MSOs and other service providers. But he was quick to respond that, “If the model changes [in a way] that makes sense, we’ll have the ability to do what we have to do.”
Asked whether HBO would make such a direct-to-consumer move if any MSO puts Netflix on its set-top box, Plepler warily repeated that, “Optionality is always a part of our thinking when and if it makes sense.”
He acknowledged that the company has been testing HBO GO direct-to-consumer delivery in its “Nordic markets,” emphasizing that HBO is also delivered via satellite and cable there.
“It’s a kind of mini-laboratory to see how it worked,” Plepler told the BuzzFeed Brews audience. “It’s doing very well and growing, and bit by bit will get better and better.”
In a subsequent response, Plepler addressed consumer complaints about having to buy a cable subscription in order to watch HBO, acknowledging that audiences say “it’s expensive to get there” [to HBO content]
“Anything that helps us get to the consumer off a cheaper base is terrific to us,” Plepler said, in his most blunt statement about HBO’s direct-to-consumer ambitions.
Plepler’s remarks about other HBO online video initiatives further underscored the company’s exploration of alternative delivery options.
“We’re in the business of building video apps, exposing our product and our shows and our brand to more and more people,” he said, citing the decision to offer the first two episodes of HBO’s “Girls” third season on YouTube.
“It’s a taste of the product in more and more environments and giving people a chance to sample what’s unique about HBO,” Plepler said.
And in response to a question about HBO technology development, he pointed out, “The opportunity to have contact with the consumer is very, very exciting. … To know you are part of the evolution of that product into new spheres is terribly exciting.”
Plepler even spun a response to a question about people sharing HBO GO passwords, such as students using their parents’ authentication codes to access content online, as a positive marketing tool.
“To us it’s a terrific marketing vehicle for next generation of viewers,” Plepler said, adding that such activities are “not material to our business. It has no real effect on the business.”
Although HBO has long pondered direct-to-viewer “optionality” (apparently a favorite Pleplerism now), the changing distribution landscape seems to be pushing the idea higher up its agenda. Clearly, Showtime, Starz and other premium services would respond to any HBO move. The shifting landscape is also exemplified by deals such as the recent launch of World Wrestling Entertainment’s online network
Overall, Plepler’s well-formed denials of imminent HBO direct-to-viewer plans reminded me of the legendary Walt Disney interview in the late 1960s in which the impresario vehemently rejected any real estate involvement in the “Reedy Creek Improvement District” near Orlando.
Disney provided so many details about why his company should not develop a theme park in central Florida that the observant local reporter concluded that it was a done deal and that Disney was spinning a story to stave off real estate speculation that would raise the price of land. Plepler’s feel-good remarks carry a similar aura of inevitability.
My fascination with HBO’s cable-bypass strategy is spurred by a conversation almost exactly two years ago with Barbara Jaffe, who recently retired as HBO senior vice president advanced technology and operations. During a conference panel session, I asked her how soon HBO would sell directly to viewers. She said “never,” and in my typical smart-aleck style, I responded “less than five years.”
Obviously, I was wrong, expecting the move to take longer than it will.
Gary Arlen waxes on digital developments from Arlen Communications (www.Arlencom.com).