AT&T has acquired HBO, so those who were thinking as to when HBO will get better and compete with apps like Netflix or Hulu, now is the time. HBO could witness an increase in the budget of its original content under AT&T, which means, the app will get more eyeballs, and people will get much better content than they are getting right now.
The decision of AT&T acquiring HBO Go came in a few days ago in which the court has placed the control of HBO in the hands of the wireless carrier and TV distributor.
The first step that AT&T took after gaining control of HBO is announcing the increase in content budget. AT&T said that they will be investing a lot more in content development at HBO.
Back in the day, HBO was one of the most sought-after destinations for original television programming, but then, things got changed. Netflix came to the fore and wiped out all others from the digital market. Netflix has laid out a content budget of $8 billion for 2018, which will further become higher in the years to come. There has been a survey taken by a reputed firm in which it was brought out to everybody’s notice that more 39% of consumers thought the best original series were available on Netflix. When it comes to HBO, the number dwindles to 14%, so HBO is in second place, but the gap between first and second spot is huge.
Can HBO ever become Netflix?
A few years ago, Netflix Chief Content Officer made a statement that their goal is to become faster than HBO rather than just competing them. Now, it seems like Netflix has achieved this goal by gaining the interest of people all around the world and by getting recognition from critics and awards academies.
When it comes to HBO, it hasn’t been able to keep up with Netflix. HBO launched HBO Now, which is an overblown streaming service that was launched in 2015. HBO Now has been able to amass around 5 million subscribers since then.
HBO has seen a spike in its customer base over the past year, and its credit goes to HBO Now app, but in the same period, Netflix added around 24 million.
AT&T Chief Content Officer has said that the company is looking to focus more on VOD content, thus catering to the HBO streaming audience in a much better way. He also sees a great opportunity to expand the international direct-to-consumer business of HBO.
Over 88 million households get the service of HBO Support worldwide, but out of those 88 million households, the majority have not subscribed to the premium HBO service.
AT&T is going to focus on HBO Now, and for that, it will be creating more content and follow better marketing techniques to expand the reach of the product abroad. This will help HBO catch up to Netflix.
Things may get expensive in the process
Netflix can spend around $8 billion on content in 2018, and the spending will be more on a cash basis, as Netflix creates more content in-house rather than licensing. Creating own content saves a lot of money, and gets control over what is being produced.
In comparison, HBO played with a budget of about $2.5 billion in 2017 out of which, it paid half of the money for licensing movies and $1.3 went toward producing original movies and TV series. Netflix, on the other hand, will spend 85% of its incremental content budget towards originals, which is the same amount as that of HBO’s total original content budget in 2017.
AT&T has bought a company that has got the potential to become a top entertainment provider globally, but AT&T has to be very careful in terms of making choices for HBO.