Thursday, March 05, 2015

HBO Now is coming in time for 'Game of Thrones' — 3 reasons why it’s good for business

Fans, of course, are excited for the option, but Time Warner (NYSE: TWX) should be too, as it builds HBO's business in three key ways:

1. New customers: Time Warner CEO Jeff Bewkes has said that HBO Now is targeting the 10 million Americans who have Internet access but don't subscribe to a TV bundle. But the service could also appeal to the 70 million cable subscribers who don't get HBO. Meanwhile, there's a faction of consumers ready to cut the cord. According to a Parks Associates survey, 17 percent of U.S. broadband households are likely to subscribe to HBO Now, and half of those — 8.5 percent — would then cancel their pay-TV service.

2. New distribution channels: In addition to its cable, satellite and telco partners — the Comcasts and DirecTVs and AT&T U-Verses — HBO will be working with a whole new set of distributors including Apple, Roku, Xbox, PlayStation and Amazon. The company will rely on these new platforms to market the service to consumers.

3. Leverage: With a bunch of new digital distribution channels for its programming, Time Warner could play hardball with cable, satellite and telco companies when it comes time to negotiate rates. No longer is pay television the only place to watch HBO, so the company could comfortably pull the channel if talks don't go its way.

From the article "HBO Now is coming in time for 'Game of Thrones' — 3 reasons why it’s good for business" by Annlee Ellingson.

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