Monday, April 15, 2019

After Game of Thrones Ends, AT&T Could Rethink Selling Part of the HBO

Coinspeaker
After Game of Thrones Ends, AT&T Could Rethink Selling Part of the HBO

Today, tech giants including Apple, Netflix and Amazon are spending hundreds of millions of dollars to create what they hope will be the next global hit.

Be it as it may, the long-awaited eighth and final season of HBO’s megahit Game of Thrones premiered on Sunday, April 14, and without a doubt, the show, based on a series of books by George R.R. Martin, is the crown jewel of HBO’s lineup.

The fantasy drama has been among the most successful series ever for HBO, garnering a 94% Fresh rating from review aggregation site Rotten Tomatoes.

The HBO show is already a record-breaking show. Season eight alone is expected to pull in more than $1 billion for HBO. And each episode cost a mega $15 million to make. Much of that budget is going straight in the pockets of the show’s biggest actors. Nikolaj Coster-Waldau earned $16 million and Emelia Clarke earned little less – “only” $13 million.

The fan frenzy is good news for investors in AT&T, which gained control of HBO with the acquisition of Time Warner late last year. HBO Now typically sees a surge in subscriber numbers in the days and weeks leading up to each season’s debut, as fans binge to catch up on the most recent episodes in anticipation of the premiere.

Unfortunately, if history is any indicator, the good times will soon be over.

HBO Gathering “Short-Term Fans”

Data shows that fans are being faithful to HBO whenever a new season of Game of Thrones comes along. However, they rarely stick around for very long after it ends.

After season seven went on in 2017, subscriptions to HBO Now jumped by 91% in the U.S., according to data from consumer behavior measurement company Second Measure. This was a massive spike compared to the slight growth that happened in the months leading up to the season premiere. Unfortunately, nearly all of the new subscribers vanished over the six months following the season finale, the report said.

That wasn’t an isolated incident. Game of Thrones saw a similar spike corresponding with the debut of season six, as subscribers nearly tripled during the season. After the June finale, however, viewers made a beeline for the exits, with subscriber numbers falling by 39% by September. The data also revealed that only 26% of viewers that signed up during season seven of Game of Thrones were still HBO Now subscribers six months later.

However, this isn’t usual phenomenon. As an example, Netflix didn’t see a noticeable gain or loss of memberships surrounding the release of either season of its hit show Stranger Things.

At the end of March 2011, Netflix had 23.6m subscribers and its streaming service was only available in the US and Canada. Its audience is now six times as large and spent $12bn in cash last year on content that can play across its 190 markets. In the process, it has transformed the way Hollywood does business.

In the past, broadcasters such as the BBC or cable companies such as HBO would screen a show in their home markets before trying to sell it abroad, one country or region at a time. Now, tech platforms are buying up worldwide rights.

To justify that spend, though, they must also seek global hits. The two dynamics feed off each other, inflating prices in the process.

Few weeks ago, Financial Times published a story about AT&T is thinking of a sale of HBO Europe. Selling off HBO’s venerable European operations would go toward easing AT&T’s $170 billion debt load, the report said.

However, WarnerMedia CEO John Stankey has denied a news report saying:

“We normally do not comment on speculation, but when a news outlet is advised that their reporting is factually incorrect and report it anyway, we feel compelled to set the record straight. There is no truth whatsoever to the Financial Times’ story saying AT&T is or has considered selling HBO Europe. It’s completely baseless and inaccurate. HBO Europe is a valuable asset for our growth plans in Europe.”

However, if subscription again starts falling, analysts think that AT&T will have to rethink whether to keep HBO Europe or sell it after all.

After Game of Thrones Ends, AT&T Could Rethink Selling Part of the HBO



After Game of Thrones Ends, AT&T Could Rethink Selling Part of the HBO

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