HBO appears to be getting nervous about cord-shaving. At the Goldman Sachs Communicopia conference in New York Wednesday, Time Warner CEO Jeff Bewkes hinted that it might make HBO Go available to non-HBO subscribers so long as they had some kind of pay-TV subscription.
Bundling HBO Go with a cable-based broadband package would be an offer “you can’t refuse,” Bewkes said:
Where do you think the likely next subscriber is? 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 currently has about 28 million subscribers in the U.S. Up to now, Time Warner has been reluctant to make HBO Go available beyond the universe of current HBO subscribers, not wanting to do anything to conflict with pay-TV distributors who not only pay Time Warner handsome per-subscriber fees to carry HBO but also provide most of the marketing and customer support for the premium channel at their own expense.
That marketing hasn’t produced a lot of new HBO subscribers lately, however. Over the last five years, HBO’s subscriber base has stagnated within a narrow range of 39.5 – 41.0 million worldwide. And while cord-cutting has not had a major impact on the premium channel to date, cord-shaving has to be a growing cause of concern. According to consumer data released last week by Altman Vilandrie & Co., the number of consumers who report paring back their pay-TV subscriptions has doubled since 2010, with 26 percent now reporting dropping one or more cable service.
Offering the HBO Go app to non-HBO cable subscribers might get some of those shavers to put down the razor.