AT&T has recently bought HBO, thus ending the speculations as to who is going to buy HBO. Now, the future of HBO looks bright as it could now compete with the bigwigs of the digital streaming like Netflix and Hulu. HBO is going to have more original content than ever before, thus gaining more customers in a specific period of time than it ever gained.
AT&T buying HBO is one of the best things that can happen to HBO because the popularity of HBO was on a decline. AT&T, a top wireless carrier and TV distributor has acquired a lot of things in the past, but acquiring HBO is one of the highlights of the company.
The first thing that AT&T did after acquiring HBO is announcing the increase in the budget for creating content. AT&T has clearly told that it is going to invest a good amount of sum in the content development at HBO.
In the past few years, HBO was among the top destinations for people when it comes to watching original TV programming, but then, things went into another direction, as Netflix came into being and it decimated all others. Now, the situation is that Netflix has outlined a content budget of $8 billion for 2018, which is further going to rise in the years to come. In a recent survey, it has been seen that 39% of consumers think of Netflix as the best platform for watching the most entertaining original series. The number takes a dip when it comes to HBO, i.e., 14%, so this clearly shows that there is a huge gap between the number one channel and number two.
Can HBO be like Netflix?
Netflix Chief Content Officer has given an interview a few years ago in which he said that the goal of our company is to become better, a lot better than HBO rather than just competing with it. Netflix has attained this goal by getting more and more customers. The reason why Netflix is so popular is due to its amazing range of top-class content.
HBO on the other has launched HBO Now in 2015, which was good, but not as good as Netflix. HBO Now was able to garner about 5 million subscribers since then.
HBO has witnessed an increment in its customer base in the past year, and it is all because of HBO Now app. In the same period, Netflix added about 24 million.
AT&T Chief Content Officer has issued a statement recently in which he said that the company is focusing more on VOD content, which will allow them to cater to the HBO streaming audience better. He also said that the company is looking to expand its business abroad.
In the current situation, more than 88 million households are using HBO services, but of those 88 million, the majority are not using premium HBO service.
AT&T will focus on HBO Now, and for that, it is going to create more originals and adopt better marketing techniques to expand the reach of its product abroad. With this, HBO will soon catch up to Netflix.
The service is going to become expensive
Netflix currently spending on its content is around $8 billion, but the company is making its own content rather than licensing it, so it can save a lot of money by producing its own content.
In comparison, HBO has a budget of about $2.5 billion out of which, it has spent $1.3 billion towards producing original TV series and movies and the rest of money for licensing movies. Netflix has spent 85% of its incremental content budget towards original content, and this amount is the same as that of HBO’s total original content budget last year.