A day after its Home Box Office announced more detailed plans for its long-awaited direct-to-consumer offering dubbed HBO Now, Time Warner chairman and CEO Jeff Bewkes said partnering with Apple TV on the product will help “elevate” it in the eyes of consumers.
HBO first announced its plans for an over-the-top version of the product in October. At an Apple news event in Cupertino, Calif., yesterday, HBO chairman Richard Plepler said the OTT product -- HBO Now – would be first available exclusively for three months to customers of Apple TV. Apple said it has sold about 25 million Apple TV devices to date, but that could grow as the company said it will reduce the price of the device from $99 to $69.
At the Deutsche Bank Media, Internet & Telecom conference in Palm Beach, Fla., Bewkes said Apple was selected for its marketing prowess and its standing among young consumers.
“They [Apple] are so good, they’re so energetic at marketing, they have such a strong position in global users, all those connected devices, the marketing and retail communication they have with hundreds of millions of people,” Bewkes said at the conference. “We thought that was a good partner to elevate HBO Now and get the value of HBO out there. ”
HBO Now is targeted initially at the 10 million broadband only homes across the country (5 million of whom have some kind of content subscription), but Bewkes said the goal is to capture customers beyond that group. As in the past, he pointed to the 70 million pay TV homes without an HBO subscription, of which he said 10 million to 15 million are primary candidates for premium channels like HBO.
“It’s clear this is a product that can enjoy much more viewership and loyalty if it was offered well and promoted correctly,” Bewkes said.
While some distributors – particularly smaller ones – have griped that HBO Now could cannibalize their customer base, Bewkes said their reaction for the most part has been favorable for the product.
“Mostly there is excitement and the realization of our distributors that all of us together have to go further in VOD packages and marketing, including broadband only for those that want to do that,” Bewkes said. “If you’re weighting it by subs and money, most of our distributors are on board with us and they are going to push it. We have some that think that it is competitive with them and that they wish that they could have maintained the sole place to get HBO. But we’ve been telling them for quite a while, that they have to get ready so they have the capability to offer this on VOD and offer this on broadband. We think that we’ve done what we can and we will continue to that.”
He added that he believes that even those critics “will come around because it’s in their interest to take this powerful product and sell it in every way that their consumers want to get it. They simply have to be more vigorous about it.”