HBO CEO Richard Plepler Says Amazon Prime Deal Is Subscriber Catalyst
Time Warner remains tight-lipped on details of a coming HBO online-only service, but CEO Jeff Bewkes outlines how the company wants to win back pay TV subs amid the continuing cord-cutting debate.
HBO CEO Richard Plepler on Wednesday lauded a subscription VOD deal that the Time Warner-owned premium network struck last year with Amazon Prime covering older shows, while Jeff Bewkes, the CEO of parent company Time Warner, outlined how his team wants to win back cord-cutters.
By providing more exposure for HBO original series, it helps increase interest in subscriptions, he said on Time Warner's earnings conference call. The deal "only has a catalytic effect" of driving people "back to the network," he said, rather than cannibalizing subscribers. He argued the Prime deal contributed to subscriber growth at HBO last year.
“We had the biggest sub growth last year any time in 30 years," Plepler said. "I think there [are] a lot of factors that contributed to that. Amazon might have been one of them, because people have an opportunity to see what they previously haven’t seen."
"HBO grew its domestic sub base by 3 million. This is the largest gain in three decades, although most were free subs," said Wells Fargo analyst Marci Ryvicker in a report.
Plepler and Bewkes remained tight-lipped on details of a coming HBO online-only service though, simply reiterating that it would be priced as a premium service. Analysts have also predicted that pricing would come in above prices that pay TV operators charge for HBO.
Bewkes on Wednesday also reiterated that the HBO push would initially focus on people outside traditional TV, meaning people currently without pay TV subscriptions. Both reiterated that details would be announced later in the year.
Asked about pay TV cord-cutting, Bewkes said on Wednesday that his company in 2014 saw "some" basic cable subscriber declines and expects that trend of "modest" declines to continue near-term.
Bewkes said the company was working closely with all distributors to make available "more vibrant VOD offers" and more and better user interfaces. Bewkes predicted they would "make a difference" in terms of pay TV user retention. Plus, he said outside of traditional pay TV, the value of the company's content and networks was growing thanks to such initiatives as the HBO online-only service.
Turner CEO John Martin reiterated that some consumers have cut the cable cord because they "can’t afford" a subscription or don't see "enough value" in current services. But he said "a portion" of these consumers would like to sign up again if pay TV packages were "more affordable and [had] greater flexibility."
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