HBO’s Parent Company Doesn’t Predict Much Interest In HBO-Only Internet Package

Comcast recently announced a new package called Internet Plus that bundles broadband service and HBO (and perhaps more importantly HBO Go) along with a smattering of basic cable channels for $50-70/month, and some have predicted that this could push more people to ditch the pricier cable packages, but not the CEO of HBO’s parent company.

Jeff Bewkes, CEO of Time Warner (not to be confused with Time Warner Cable, which is now a separate business), recently tried to calm analysts by declaring that the potential for people effectively cutting the cord in favor of packages like Internet Plus is “pretty limited… It won’t be attractive to most people, but might appeal to a segment.”

As I’ve mentioned before in my arguments for why Time Warner would be reluctant to sell a direct-to-consumer version of HBO Go that forgoes the whole basic cable requirement, the multibillion-dollar entertainment company stands to lose big from cord-cutting.

Time Warner doesn’t just own a few basic cable channels, it owns many of the biggest — CNN, TBS, TNT, HLN, Cartoon Network, among others. Not only do these stations rely on fees that it charges to cable providers (which are then passed on to you in your basic cable bill), they depend on advertising dollars to stay alive.

Obviously, if people cut the cord completely, the cable providers will want to pay smaller fees to Time Warner. And if fewer people are watching these channels, advertisers won’t pay as much for commercials.

Yes, Internet Plus — and the inevitable packages to come from other cable providers — may include some Time Warner stations, thus allowing Comcast, et al, to continue paying some carriage fees to Time Warner. But many of the people who opt for this tier will likely get it solely for the HBO access, meaning the cable channels will see ratings drop.

And so while it’s in Bewkes’ interest to make a deal that will keep fees coming in and keep people paying for HBO, it’s also in his interest to downplay any long-term negative impact this might have on Time Warner’s other channels.

“It’s something we don’t have to be concerned about,” he told the analysts.

Jeff Bewkes: HBO’s Streaming Deal With Comcast Won’t Promote Cord Cutting [Variety]

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  1. CommonC3nts says:

    They need a new marketing department as their stats are completely wrong which means their workers are not doing their jobs.
    Basically anyone willing to pay $8 a month for netflix would be willing to pay a monthly fee for the HBO library of tv shows and movies.

    • theoriginalcatastrophegirl says:

      i would be willing to pay $8-10 a month for it. i would be willing to pay that amount on my internet bill, if that were an option. it seems to be comcast only for right now, which is not in my area. when my internet provider has this as an option, it will depend on the cost.

  2. FozzyOsbourne says:

    I got a card for this in the mail this week. $40/mo for 12 months. I’m tempted to drop DSL for it. I know several others have Xfinity in my apt building so I’m worried about slowdown though.

  3. MissPurdy says:

    I recently downgraded my cable options and had wanted to have just basic cable with HBO. I can’t do it with Time Warner Cable, they force me to have digital with a converter box and charge me lease fees. Why should I have to pay for their damn digital box when I should be able to watch HBO Go on my laptop? I’m still irate about it and will likely drop HBO all together because of it.

  4. Rockhop says:

    They apparently don’t have a very good sense for how little it bothers the average cord cutter to just torrent their programming. I would be happy to pay $10-15 a month for streamed HBO or Showtime content, but left without that option its also very easy to automate the downloading of their content.