×

Will HBO Now Become AT&T’s Netflix Killer?

Six years ago, Jeff Bewkes derided Netflix’s threat as a competitor — facetiously comparing the streaming company’s ambitions to the likelihood that the Albanian army would take over the world. Now that his company is set to get sucked into AT&T’s maw, the Time Warner CEO is talking a different game: one that sounds a lot like Netflix’s data-driven approach to acquiring and developing content.

With AT&T’s heft, HBO Now — already a key rival to Netflix — stands to become a more robust offering in the U.S., potentially bundled with the telco’s wireless and broadband subscribers.

And the telco could provide resources to accelerate the global rollout of HBO’s over-the-top services to take on Netflix worldwide, as Amazon also looks primed to take its video subscriptions to more countries.

There are two critical differences between Netflix and HBO when it comes to streaming. First, HBO owns global rights to all its original series, while Netflix has only just started landing worldwide rights to shows it licenses, and owns only a few series outright, like “Stranger Things.” Second, HBO’s preference is to go to market with strategic partners, as it has done with pay-TV distributors for its entire existence. A year ago, HBO chief Richard Plepler complained at an industry confab that Comcast and other large internet providers were being “myopic” by not bundling HBO Now with their broadband offerings. Since then, HBO hasn’t inked any significant deals with U.S. internet service providers. AT&T would change that in an instant: It has more than 14 million broadband customers and 54 million consumer wireless subs.

Besides access to preferred pipes and placement on millions of smartphones, HBO and other Time Warner companies, as part of AT&T, would get access to something Netflix has touted as a competitive advantage for years: Big Data. One of the benefits of the AT&T/Time Warner merger called out by execs of both companies is the ability to mine the vast amount of usage data from the telco’s mobile, TV, and broadband users to make programming decisions.

“There’s a huge opportunity to utilize consumer insights to inform content creation that allows us to continue to create not just the biggest hits, but also content and programming that really engages with passionate niches in the audience,” Bewkes said on a call with analysts Oct. 24.

Currently, HBO’s TV networks are available in more than 50 countries, and reach more than 35 million subscribers. But the company, and AT&T, see an opportunity to bring the brand to larger internet audiences everywhere.

Whereas Netflix is available in 190 countries, HBO’s OTT offerings are in just a handful. The HBO Nordic streaming service, launched in 2012, is seen as a negligible success in Scandinavia. HBO standalone streaming services are also available in Colombia and Mexico, with launches set by year’s end in Brazil, Argentina, and Spain.

HBO representatives deferred to statements made by its parent company and AT&T regarding future plans under the telco’s wing.

Regulators are likely to place restrictions on how a merged AT&T and Time Warner would operate. For example, they may mandate that services like HBO be made available on a nondiscriminatory basis to all distributors. But the coupling of powerful content and distribution under one roof promises to be a boon for HBO’s OTT future.

Netflix may be worried that HBO will become a more formidable competitor with the backing of the U.S.’ biggest telecom company.

“How it impacts anybody will be highly dependent on how it emerges,” Netflix content chief Ted Sarandos said at USC’s Entertainment Law and Business conference, before the AT&T/Time Warner pact was officially announced. “Those are pretty powerful assets. I’m sure it will come under a great deal of scrutiny.”

Cynthia Littleton and Debra Birnbaum contributed to this report.

More Biz

  • Hong Kong skyline

    Hong Kong Declares Emergency in Coronavirus Response

    Hong Kong’s government has put the territory on the highest state of emergency in response to the outbreak of coronavirus in mainland China. Schools will remain closed until Feb. 17, long after the Chinese New Year holidays, which begin today, should have finished. Hong Kong is a Special Administrative Area of China and some 600 [...]

  • Harvey Mason Jr.., Chair of the

    Grammy Board Chief Calls Allegations of Nomination-Rigging ‘Just Not Right’

    Among the many allegations in ousted Recording Academy CEO Deborah Dugan’s blockbuster legal complaint, the one that possibly cuts most to the heart of the institution — and is of most concern to artists and the public — is the allegation that the nominating process is “rigged.” The example in the complaint points to the [...]

  • Annabella Sciorra

    Friend Tells of Annabella Sciorra's Mid-1990s Struggles at Harvey Weinstein Trial

    A longtime friend of Annabella Sciorra testified Friday in Harvey Weinstein’s criminal trial that the actor turned to cutting herself and exhibited other troubling behavior in the mid-1990s after she was allegedly raped by the disgraced film mogul. The defense questioning of model Kara Young got heated as Judge James Burke sustained repeated objections to [...]

  • Writers vs Agents Packaging War WGA

    Judge Doubts WGA Claim That Packaging Fees Are Kickbacks

    A federal judge seemed skeptical on Friday of the Writers Guild of America’s claim that packaging fees amount to a criminal kickback to agents. Judge Andre Birotte heard more than two hours of arguments from attorneys for the guild and three agencies: WME, UTA and CAA. He said he would issue a ruling at a [...]

  • Songs for Screens Powered by Mac

    Songs for Screens: Why Aerosmith Is Still Gold for Synchs

    Aerosmith’s star-studded tribute concert as the 2020 MusiCares Person of the Year honorees on Friday night (January 24) will cement another important milestone in the historic Boston-founded band’s contributions to the American rock canon. But over the past decade, some of the band’s best-known music has remained part of the cultural conversation through some of [...]

  • Sirius Logo

    Radio Hall of Famer Kid Kelly Leaves SiriusXM After Two Decades

    In a surprise move, veteran programmer, on-air personality and Radio Hall of Famer Kid Kelly has left SiriusXM after nearly 20 years with the radio giant, a rep for the company has confirmed to Variety. The news was first reported by RAMP. He most recently served as SiriusXM’s VP of Pop Music Programming. “After a [...]

More From Our Brands

Access exclusive content