HBO Now Numbers Thoughts

Peter Kafka at re/code on HBO Now subscribers so far:

The Internet demanded it for years, and last year HBO finally gave it to them. But so far, only 800,000 people have subscribed to HBO Now, the pay TV channel’s Web-based service.

Emphasis mine.

The sentiment (not just at re/code) is that this is not very impressive. I am not educated enough to know what this number means, so maybe it is unimpressive. It seems like a pretty good number for 6 months though. This service only makes sense for people who do not have HBO already as part of their cable package (otherwise HBO GO is included and negates any point of HBO Now completely).

There are likely people out there who would have signed up for the service but are trapped in a cable TV contract already. HBO Now is $15 a month, so it would only provide a slight savings over including HBO in your monthly cable package if you have one, and you lose the convenience of it just being there on your TV without having to change inputs or watch on your tablet.

I suspect that most of the 800K people (or “households”) who signed up are those that didn’t have HBO at all before. These people were probably freeloading off their friend’s/family’s HBO GO account or just waiting around for a service like this. It is also worth remembering that for the most part the service wasn’t in full swing in time for Game of Thrones (HBO’s flagship series these days), Veep or Silicon Valley, all of which are prime kinds of viewing for the demographic of people who will want HBO Now.

It’s unclear how much it cost HBO to setup this service, but it couldn’t have been all that much since HBO Go was already providing essentially the same service. Maybe the infrastructure had to be upgraded, but overall HBO Now has to be almost pure profit on a per user basis, and that margin should only increase as the next burst of users sign up.

These numbers will be far more interesting six months from now when all of HBO’s big shows have had a full season to run on the service, and more people have been able to get our of their cable contracts.