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With just days to go before premiering the new season of flagship series Game of Thrones, HBO is reportedly approaching a new milestone for internet-delivered subscribers. The network says it is approaching 3.5 million digital subscribers, according to a report earlier today in the U.K.’s Financial Times.
Time Warner, HBO’s parent company, reported in February that its HBO NOW service had reached 2 million subscribers since its launch in April 2015. The 3.5 million figure, according to the Financial Times (subscription required), is the number of HBO’s “broadband-delivered subscribers,” which includes subscribers to HBO NOW plus add-on subscribers through digital services like Amazon Channels.
HBO has taken a multi-pronged approach to expanding its base during a major shift in how consumers are paying for and watching TV. With 1.9 million U.S. subscribers dropping bundled TV services like Comcast Xfinity and Dish Network in 2016, HBO risks losing those households who subscribed to the premium network as part of their service. HBO’s strategy has been to make its programming broadly available through internet-delivered services like Amazon Channels, Sling TV, DirecTV NOW and — just last week — Hulu.
So is 3.5 million digital subscribers a good number for HBO? Good question.
The number represents only about 3 percent of HBO’s 131 million worldwide subscribers — including 34 million U.S. subscribers — so the two important metric for HBO going forward will be how many of those subscribers leave leave their bundled service behind and how many of them subscribe to HBO through one of the digital services.
HBO’s revenue grew 5.6 percent in the first quarter of this year, but some of that growth is attributable to higher subscriber fees, which may not be sustainable in a market where subscribers are flocking to services like Netflix, Amazon Prime and Hulu that are all cheaper than HBO, which is $15 a month on most platforms.
AT&T’s pending acquisition of Time Warner could also change HBO’s pricing and growth strategy with AT&T by using the premium channel as an inexpensive sweetener for its broadband, mobile and bundled-TV packages. HBO’s already available on AT&T’s DirecTV Now streaming service as a $5-a-month add-on and on its DirecTV satellite service free for the first three months.
Scott Porch writes about the streaming-media industry for Decider and is also a contributing writer for Playboy. You can follow him on Twitter @ScottPorch.
