News & Analysis Top
TV Providers Raising HBO's Monthly Fees
By Swanni Follow @SwanniOnTV
Washington, D.C. (February 6, 2013) -
DIRECTV, Dish and Comcast, the nation's top three TV providers,
have raised or will soon raise the monthly fee for HBO to at
least $18 -- more than twice as much as Netflix now charges per
month ($7.99) for unlimited streaming.
Netflix CEO Reed Hastings has publicly vowed to challenge HBO
for the home video audience and the rising fees for HBO could boost his effort.
Starting tomorrow (Feb. 7), DIRECTV, which has nearly 20 million
subscribers, will raise the standalone price for HBO from $15.99
to $17.99, the company announced last month. (The price will
stay the same for 'Premier' package customers; the Premier plan
starts at $119 a month.)
Dish, which has more than 14 million subscribers, raised the
price of HBO from $16 to $18 a month last October.
And effective March 1, Comcast, which has roughly 22 million video
subscribers, will raise the standalone price for HBO from $15 to
$18.95 in some markets, according to a new services and pricing agreement
mailed last week to subscribers. (TVPredictions.com obtained a
copy of the agreement.)
The cable operator has different pricing plans for different
areas so it's unclear how many customers will see this specific
$3.95 price increase. But in some markets, Comcast has
already begun charging more than $18.95 a month for HBO.
According to the Comcast
web site:
"Comcast’s
current monthly service charge for HBOŽ ranges from $10.50 to
$23.95, depending on area and other Comcast services (if any)
received."
Generally speaking, Comcast charges less for HBO if you
subscribe to a larger programming package; more if you subscribe
to a smaller package. But the $3.95 increase in some markets
follows the trend set by DIRECTV and Dish to increase HBO's
monthly rate.
If forced to pay nearly $20 a month (or more), it will be interesting to see if HBO
subscribers in a
tough economy opt instead for a less expensive alternative such as Netflix or Amazon Prime.
Netflix apparently thinks they will. Company chief content officer Ted Sarandos told GQ
recently that his company's goal is to "become HBO faster than
HBO can become us."
He was referring to Netflix's launch last week of its second
original program, House of Cards. The company says it plans to
offer several original shows a year. (On
the other hand, HBO is moving to bolster its online offering,
called HBO GO, which is why Sarandos made the "become HBO faster
than HBO can become us" remark.)
Netflix may already be on its way to its goal. The company
surprised the industry last month when it announced that it
added two million streaming subs in the fourth quarter. Netflix
says it now has 27 million streaming customers in the U.S. while
Forbes has
reported HBO
has roughly 30 million U.S. customers via pay TV services (not
counting Cinemax subs.)
Time Warner, the parent of HBO, today released its fourth
quarter report and company CEO Jeffrey Bewkes said
in a conference call with Wall Street analysts
that HBO and Cinemax combined for 1.9 million additional
subscribers in the U.S. for the entire year, which is slightly
less than what Netflix added in the fourth quarter alone.
Bewkes did not break out the subscriber numbers for HBO and
Cinemax, nor disclose how many subs were added in the fourth
quarter, if any were added at all.
The Time Warner chief also said HBO now has 114 million
subscribers worldwide. Netflix has a little more than six
million internationally.
But the question now is whether Netflix, and other lower-cost streaming
services, are cutting into HBO's U.S. base. And, whether the new
HBO price increases by DIRECTV, Dish and Comcast will hurt the
premium channel domestically in 2013 and beyond.
Bewkes today didn't seem worried.
"Netflix
has a new original that's pretty good, House of Cards. I think
that's great. It will take a while for that to turn into... I
forget, what does HBO get? 10 or so hits a year? It's all good,"
he said.
Time Warner spokesman Keith Cocozza told TVPredictions.com that
Time Warner does not break out individual subscriber numbers for
HBO and Cinemax, nor provide quarterly numbers for the channels
combined. He added that HBO and Cinemax now combine for 41
million subscribers in the U.S.
Final note: It should be said that while the nation's top TV
providers are raising HBO rates, they sometimes will provide
temporary special offers to entice people to subscribe.
Also, a quick search of the web sites of other top TV
providers showed the following prices for HBO as of now:
Verizon
$18.99 a month. (but you get 50% off for first six months with any FiOS TV Plan.)
AT&T
$16 a month.
Time Warner Cable
$15.95 a month. (Syracuse.com says the cable operator is
raising rates for several TV services next month in the Syracuse
area, but it's
unclear if HBO is included in the price hike. And, if it is,
whether other markets will see an increase as well.)
Cablevision
$14.95 a month.
Cox
$15 a month, but some areas are running special offers of $6 for six months.
