HBO added 2.7 million subscribers during the fourth quarter according to Time Warner Inc.’s latest earnings report, “about 800,000” of which, or just under one-third, came from HBO Now, it’s standalone over-the-top offering. That suggests that, barely eight months in, HBO Now has emerged as an important contributor to HBO’s overall subscriber growth.
Since HBO Now is sold direct-to-consumer at $15 a month, moreover, those subscribers are likely worth more to HBO on a revenue basis than pay-TV subscribers, for which revenue is shared with operators.
Time Warner officials pronounced themselves pleased with the results so far.
Wall Street, however, had a different view. Analysts were expecting as many as 1.4 million OTT subs by now and investors responded by sending shares of Time Warner down by nearly 5 percent.
To be fair, Warner announced its results on a day when media shares got slaughtered across the board and Time Warner’s losses were in line with other media victims. On the other hand, Time Warner’s results, along with Disney’s the day before, were major triggers for the sell-off, as investors continue to fret about subscriber losses among among cable networks as consumers cut the cord or shift to cheaper, skinnier bundles.