HBO is about to see whether HBO Now, its standalone service that lets you get HBO without a cable subscription, has hurt its negotiating power with the big cable companies.
HBO is in the process of making new deals with major US distributors, which the company sees as more important for its continued growth in the US than HBO Now, Bloomberg reports, citing a person familiar with the network’s strategy.
But these deals aren’t just a continuation of business as usual. HBO wants the new deals to let it keep more of the subscription money for itself, according to Bloomberg.
One big factor in HBO’s potential success will be how cable companies view HBO Now, which HBO launched in April 2015. Cable isn’t the only place you can get HBO anymore. You can get it on your streaming box, smart TV, or game console. There’s the chance this means HBO has lost some of its lustre in the eyes of distributors, and that its power at the negotiating table has gone down.
But if distributors see HBO as a shining model of must-see TV, of what a powerhouse TV network looks like going forward, HBO could still secure the terms it wants. The question is whether distributors see the impending end of “Game of Thrones” and the flop of “Vinyl,” which was cancelled after one season, as indication of programming weakness, or look to things like the recent success of the “Westworld” as a sign that HBO has still got it.
Regardless, it will be HBO’s first test in the post-HBO Now landscape to see how distributors will negotiate with a TV network that isn’t exclusively theirs anymore.
Bloomberg points out that consolidation in the cable industry might be a boon for HBO. “Charter Communications Inc.’s acquisition of Time Warner Cable Inc. and AT&T Inc.’s purchase of DirecTV replaced two of the weaker sellers of HBO with stronger ones, according to the person familiar with the network’s strategy,” Bloomberg’s Gerry Smith writes.
HBO already renewed a long-term contract with AT&T and is close to one with Charter, according to Bloomberg.
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