HBO remains the king of the premium cable channels. But while its distant competitors like Showtime and Starz continue to grow, Home Box Office has not. And that has some observers concerned.
Despite the highly anticipated third season finale of “True Blood” over the weekend, HBO suffered its second consecutive quarter of subscriber base losses. Although they were only a couple hundred thousand, that turns around what had been mostly growth for the cable channel as it dipped under 29 million subscribers, according to The Hollywood Reporter.
HBO doesn’t depend on ratings like network and other cable channels because it doesn’t air commercials, and instead depends on paid subscribers, which helped it generate $1.2 billion annually. Original programs like “True Blood” and the upcoming “Game of Thrones” help continue to differentiate HBO from other premium cable offerings, since such channels can’t solely depend on movies mostly available to everyone and already viewed by many in theaters or on DVD.
The subscriber decline won’t affect “True Blood” or “Game of Thrones,” but it can force a cable channel to rethink some of its programming, fearing some of its genre offerings might not be what viewers are looking for, who in the past locked in to more mainstream shows like “The Sopranos” and “Six Feet Under.”
At the same time, channels like Starz are getting a lot of publicity as of late for offerings such as “Spartacus: Blood and Sand,” and the popular genre favorite and “Doctor Who” spinoff “Torchwood,” which arrives in 2011.
But it might not be programming or even competition that is hurting HBO. Instead, it’s possible its troubled negotiations, first with Comcast last year and now with DirecTV, is the larger culprit. In both cases, HBO was “blacked out,” meaning the customer service people starting subscriptions on those services were less apt to try and up-sell HBO — one of the cable channel’s leading ways of gaining subscribers.
Comcast has more than 41 million subscribers total, while DirecTV has 18 million.
Original programming is designed to boost subscriber numbers, but in today’s multimedia age, it’s hardly the only stream of revenue. HBO has been raking in cash thanks to DVD sales and international distribution. “True Blood,” for example, has brought in $100 million from DVD sales alone.
The economy also is hitting cable channels like HBO harder than expected. Premium cable channels are considered a luxury in many households, and viewers who might be keen on shows like “True Blood” and others, could likely wait for it to come out on DVD, or be made available on Netflix.
It might not be a permanent problem for HBO, but the cable channel will obviously spend the rest of the year focused on keeping its subscriber base up. And maybe it will need a “Game of Thrones” to make it happen.