Time Warner Inc., chairman and CEO Jeff Bewkes said his Home Box Office would consider a broadband-only service, but would be reluctant to offer the premium channel to customers without an existing pay TV connection.
Bewkes, at the Goldman Sachs Communacopia conference Wednesday, said offering its HBO GO online service as a bundle with a cable high-speed data service would create an product “you can’t refuse,” adding that such an offering could give the premium channel an inroad into the 70 million households that subscribe to pay TV but not HBO, not just the 5 million to 6 million that don’t have a pay TV service.
“Where do you think the likely next subscriber is?” Bewkes asked. “Is it the 70 million homes that have bought 200 channels of stuff and they haven’t bought HBO? Or is it the 5 or 10 million that didn’t buy either HBO or that? It’s pretty obvious; it’s the 70 million homes. We’re working more on that. If a way to get them is through a broadband offering, our distributors would be properly interested in that. They haven’t yet.”
HBO leads all other premium networks with about 30 million subscribers.
While Bewkes was protective of the distributors that help pay the bulk of HBO’s freight, he also appeared a little miffed at the hubbub some key MVPDs have created over rising programming costs. Bewkes stressed that Time Warner‘s Turner networks will continue to secure double-digit carriage fee increases through 2016, and added consumers get access to hundreds of channels on multiple devices for less than a daily double latte at Starbucks.
“It’s $3 a day,” Bewkes said of the average costs of cable programming for consumers. “You don’t think that’s a deal?”
He added that most distributors still manage to have healthy businesses despite the cost of content.