WarnerMedia Assumes Full Control of HBO Brand in Latin America

Ahead of its HBO Max unveiling on Oct. 29, WarnerMedia has reached an agreement to buy Ole Communications’ minority stake in HBO Ole Partners, the joint venture between WarnerMedia and Ole Communications.

When the transaction closes, WarnerMedia will own 100% of all HBO, Cinemax and HBO Go services in Spanish-speaking Latin America and the Caribbean.

The agreement does not include HBO Brasil Partners, another joint venture between the companies that operates HBO in Brazil. WarnerMedia and Ole Communications will continue their basic channel distribution business in Latin America.

Subscription streaming video platform HBO Max is slated to launch in the first quarter of 2020.

The transaction is expected to be completed following the granting of relevant regulatory approvals. Upon completion, HBO Ole Partners will fall under the purview of Gerhard Zeiler, chief revenue officer, WarnerMedia, and president, WarnerMedia International Networks.

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“The [HBO Ole Partners] acquisition will allow us to bring localized versions of our upcoming U.S. streaming service to consumers in Spanish speaking Latin America and the Caribbean,” Zeiler said in a statement.

Th executive said WarnerMedia chose not to include Brazil operations in the deal due to “existing regulatory uncertainty” in the country.

“We support and remain optimistic about the ongoing efforts to amend the SeAC law to ensure the media industry has a clear and predictable regulatory framework that fosters investment and innovation,” Zeiler said.

WarnerMedia and Ole Communications brought HBO programming services to the region for the first time when they founded the HBO Ole Partners joint venture in 1991 and launched a Spanish-language HBO-branded premium channel that same year. In 1994, a Portuguese-language service was launched in Brazil.

Sony PlayStation Vue Could Lose HBO, Cinemax

As media distribution competition intensifies, existing carriage agreements are changing.

Sony’s online TV service PlayStation Vue warned on its website that it may soon lose WarnerMedia’s HBO, Cinemax and NBA TV, among other programming.

“Most of the programming/content you watch on PlayStation Vue is licensed from programmers for the right to air their networks/channels,” read the site. “Once these agreements near expiration, we enter into renewal discussions where we work hard to try and obtain the best value for our customers.”

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While Vue has license agreements with WarnerMedia through the end of the month, the AT&T subsidiary is reportedly looking for increased subscriber commitments from licensees.

Dish Network recently dropped HBO from its satellite and online service Sling TV due to the demands. CEO Charlie Ergen recently argued Dish users could subscribe to HBO Now separately if they wanted the programming he has no interest in subsidizing.

With Vue subscriptions reportedly trailing Sling, AT&T TV, YouTube TV, Sony is trying to streamline programming costs.

“Though infrequent, sometimes certain licenses will not be renewed, in which case PlayStation Vue would no longer carry the affected channels or networks,” read the site. “This section will be updated periodically to list channels and networks coming up for renewal.”

 

Sofia Chang and Rich Warren Tapped to Lead WarnerMedia Distribution

Sofia Chang and Rich Warren have been named to lead WarnerMedia Sales and International’s distribution business.

Both will take the role of president of WarnerMedia Distribution, and will oversee distribution for all Turner channels, HBO, Cinemax and HBO Max and will report to Gerhard Zeiler, chief revenue officer of WarnerMedia, and president of WarnerMedia International Networks.

Chang held the previous post of EVP of global digital distribution for HBO, and Warren was president, Turner content distribution.

Chang has held several positions in the company since joining HBO in 2000. She has led the transactional digital and physical distribution of HBO and Cinemax programs worldwide and since 2015, she has been responsible for distributing HBO and Cinemax subscription services on all digital platforms.

Warren has been at the company for 19 years and has led Turner’s distribution team, where he was responsible for the company’s multiplatform distribution of linear networks, digital brands and on-demand content, affiliate marketing, business development, strategic planning and business affairs.

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“Bringing together the distribution business is a further example of how WarnerMedia will be collaborating and working as one company,” according to a studio press release. “As the company looks to meet the challenges of the industry head on, this new structure does that.”

“We will have two hugely experienced leaders who know our business inside out,” said Zeiler in a statement. “Over the last few months I have worked closely with both; Sofia’s experience and success in driving HBO’s digital subscriptions has been of great value as I have looked to understand the U.S. HBO business in greater depth and detail, and Rich has brought his strategic skills to the table as we have sought this way forward. Working together both will provide the strategy and direction needed to enable future growth.”

WarnerMedia Readying $16-$17 SVOD Service Focused on HBO, Cinemax, Warner Bros. Movies

WarnerMedia reportedly plans to launch a subscription streaming video service later this year revolving around HBO, Cinemax and Warner Bros. movies — and priced from $16 to $17 monthly.

The unnamed service, which will bow in beta later this year, would join similar SVOD efforts from Disney ($6.99 Disney+) and Apple aimed at competing against Netflix, Amazon Prime Video and Hulu, according to The Wall Street Journal, which cited sources familiar with the situation.

NBC Universal is readying an ad-supported VOD service for Xfinity subscribers in 2020, which would be available separately to consumers for a monthly fee.

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Notably, WarnerMedia’s service would cost slightly more than what HBO Now ($14.99) and Cinemax ($12.99) do now separately — the latter charged to pay-TV subscribers.

WarnerMedia, which formed following AT&T’s $85 billion acquisition of Time Warner, is also eyeing ad-supported VOD service.

The rush to over-the-top distribution comes as AT&T continues to hemorrhage pay-TV subscribers among its DirecTV and AT&T U-verse platforms. Standalone online TV service, DirecTV Now, for the first time lost subscribers in the most-recent fiscal period as well.

Indeed, AT&T is scrambling to find an OTT product that resonates with consumers. Late last month, it inked a joint venture deal with The Chernin Group aimed at investing $500 million into both ad-supported and subscription-based online video businesses.

“Combining our expertise in network infrastructure, mobile, broadband and video with The Chernin Group’s management and expertise in content, distribution, and monetization models in online video creates the opportunity for us to develop a compelling offering in the OTT space,” John Stankey, CEO of WarnerMedia, said in a statement.

The Roku Channel Adds HBO, Cinemax

Roku April 4, announced that HBO and (soon) Cinemax are available as add-on third-party subscriptions on The Roku Channel. HBO joins an array of more than 25 premium subscriptions already available on The Roku Channel.

The Roku Channel provides users access to 10,000+ free, ad-supported movies and TV episodes as well as third-party premium subscriptions. It is a top 5 channel on the Roku platform by active account reach. The channel’s easy-to-navigate, content-first interface, allows users to discover free, ad-supported entertainment as well as premium services in a single destination without having to switch between multiple streaming channels.

“The Roku Channel delivers a single destination to discover great free, ad-supported and premium subscription entertainment,” Rob Holmes, VP of programming and engagement, said in a statement. “We are expanding premium subscriptions by making HBO more easily available to The Roku Channel’s highly engaged user base.”

The Los Gatos, Calif.-based streaming media device manufacturer’s 27 million users can trial HBO for free for seven days. Following the seven-day trial, subscribers will be charged $14.99 per month.

The Roku Channel offers a single destination for both free (ad-supported) and premium movies and TV shows. Customers can browse all content, even those from premium subscription services, without needing a subscription.

Users ready to subscribe via The Roku Channel can take advantage of “one-click” signup and subscriptions can be managed through the “My Account” section on the website. Premium subscriptions are only viewable within The Roku Channel.

“The Roku Channel users will have a chance to watch the final season of “Game of Thrones” on their favorite platform,” said Jeff Dallesandro, SVP, worldwide digital distribution and new business development, HBO.

 

Study: U.S. SVOD Buyers Average 3.4 Services

Online video subscribers in the United States average 3.4 streaming services and pay an average of $8.53 per month per service, according to a new study.

The nScreenMedia study, “Keep My Customer — Why Consumers Subscribe To, Stay With, Cancel, and Come Back to Online Video Services,” also found that 70% of households in the United States and 40% of U.K. homes have a subscription to at least one streaming video service.

The study was commissioned by Vindicia, an Amdocs company providing business-to-consumer digital services monetization.

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Involuntary cancellation is a problem for the industry, according to the study. These payment failures occur when a credit card problem, such as insufficient funds, results in automatic cancellation of a customer. The study revealed that more than a quarter of U.S. and a third of U.K. online video streamers have had a SVOD service canceled due to a credit card problem. And of those groups, 30% did not return to the service.

“Involuntary cancellations are a huge problem for the SVOD industry, particularly among young subscribers,” said study author Colin Dixon, founder and chief analyst at nScreenMedia, in a statement. “Young adults from 18 to 34 years old are twice as likely to have experienced involuntary cancellation in the U.K., and three times more likely in the U.S.”

“For video streaming services, the ability to acquire and retain subscribers is vital to their success,” said Anthony Goonetilleke, group president, media, network and technology, Amdocs, in a statement. “However, streaming services are losing subscribers — and millions of dollars in annual revenue — due to involuntary credit card cancellations. This kind of customer churn is largely preventable. By leveraging the right technology, video streaming providers can recover failed payment transactions and capture revenue that would otherwise be lost, enabling them to better compete in a highly competitive market.”

In terms of overall cancellations, the survey looked at how often people cancel their service and their reasons for doing so. In the United States, 38% of the survey group said they have canceled one or more services in the last year. Of that group, two-thirds said they had canceled one service only, and just one in 10 have canceled three or more services.

Netflix users are slightly less likely than average to have canceled service in the last year, according to the study, while Hulu users are slightly more likely. Amazon Prime Video users are no more or less likely than average.

The top two reasons cited for canceling a video service: people couldn’t find enough content they liked and didn’t find the service a good value for their money.

Previous customers are the best new prospects, as the study found that 33% of U.S. and 25% of U.K. cancellers have been persuaded to sign up for service again.

Discounted subscriptions are an under-exploited opportunity for service providers to win new customers. The survey revealed that a 20% discount for a three-month commitment generated the highest interest level, with 66% of U.S. and 57% of U.K. subscribers saying they were likely or extremely likely to take the offer. Three months is an important milestone, because subscribers that stay this long are much less likely to leave the service. Surprisingly, the study found that offering more than a 20% discount did not result in more interest.

The study also found that free-trial abuse is not a serious problem for online video service providers. While 49% of U.S. and 62% of U.K. online video subscribers have canceled at least one service within the free trial period, only 5% in the U.S. and 2% in the U.K. have canceled within the free-trial period four or more times in the last year.

When it comes to retaining existing subscribers, content is king. The study found that 64% of U.S. subscribers and 55% of U.K. subscribers have been with their longest-tenured service for one year or more. When asked why they stay, respondents said having plenty of interesting content to watch was the top reason. Value for money was a close second place, and ease of finding something good to watch came in third. Interesting original content was the fourth reason, while providing plenty of new shows took the fifth-place spot.

Meanwhile, Amazon’s expanding influence in the VOD market is evident. The study found that one-third of U.K. and U.S. Prime Video subscribers have purchased an add-on video service, with higher income individuals more likely to use Amazon Prime Video and to purchase an add-on. In the United States, the most popular video add-ons are premium services such as HBO, Starz, Showtime and Cinemax. CBS All Access is also very popular. In the United Kingdom, the most popular video add-ons are Eurosport Player, Discovery, ITV Hub+ and FilmBox.

To learn more about the nScreenMedia study or to download a copy, visit here.

Sling TV Q3 Subscriber Growth Plummets

Dish Network Nov. 7 reported third-quarter (ended Sept. 30) loss of 367,000 pay-TV subscribers compared to a gain of 16,000 subs in the previous-year period – the latter largely attributable to an increase in Sling TV subs.

The Denver-based satellite TV operator ended the period with 10.28 million pay-TV subs compared to 13.2 million subs last year. Sling TV, the industry’s first online TV platform gained 26,000 subs – a fraction of the reported 240,000 subscribers added in the previous-year period.

Indeed, Sling TV, which was the first platform to offer standalone access to Disney-owned ESPN and has been offsetting Dish Network pay-TV sub losses since it launched in 2015, ended the period with 2.37 million subs. It ended 2017 with 2.21 million subs.

Dish TV’s average monthly subscriber churn rate (subs not renewing service) was 2.11% versus 1.82% for third quarter 2017.

It remains to be seen whether Dish decides to incorporate Sling TV with Amazon Channels, the ecommerce behemoth’s platform affording Prime members direct access to third-party over-the-top video services.

Services such as HBO Now, Cinemax, Lionsgate’s Starz OTT, CBS All Access, Showtime OTT and Cinedigm’s Dove Channel, have attributed much of their subscriber growth to Amazon – which in turn collects revenue-sharing and proprietary subscriber data for its distribution channel.

On the fiscal call, Charlie Ergen, co-founder and chairman of Dish, said the slowdown in sub growth at Sling had more to do with the growth of the OTT video ecosystem than consumer indifference.

“You’re seeing major [online TV] players that are all gaining subscribers, and everybody has a little different offering, a little bit different slew of channels, a little bit different interface,” Ergen said. “Obviously, Disney has talked about going direct to the consumer. So, you’re going to see an awful lot of people in the category, and at some point there will be too many, and at some point there will be a consolidation.”

 

 

 

Dish Announces ‘Anticompetitive’ AT&T Has Pulled HBO and Cinemax From Its Services

Dish late Oct. 31 announced that AT&T had pulled HBO and Cinemax content from Dish and Sling TV subscribers, calling the move “anticompetitive.”

The Dish release states that the “AT&T-DirecTV-Time Warner mega merger has allowed the giant conglomerate to relentlessly exert power and influence over competing pay-TV providers and consumers.”

Dish announced the action came after AT&T made “untenable demands designed specifically to harm customers, particularly those in rural areas, as well as damage competing pay-TV providers.”

The U.S. Department of Justice filed an antitrust lawsuit to block the AT&T-Time Warner lawsuit and Aug. 6 appealed the court’s decision to allow the merger. Following the merger’s approval, subsidiary WarnerMedia announced plans for a subscription streaming service.

“There were no guidelines set in place to ensure that AT&T ‘played fair’ for HBO and Cinemax subscribers, regardless of their pay-TV provider,” according to Dish.

“Plain and simple, the merger created for AT&T immense power over consumers,” said Andy LeCuyer, Dish SVP of programming, in a statement. “It seems AT&T is implementing a new strategy to shut off its recently acquired content from other distributors. This may be the first of many HBO blackouts for consumers across the country. AT&T no longer has incentive to come to an agreement on behalf of consumer choice; instead, it’s been given the power to grab more money or steal away customers.”

The blackout “is exceptionally harmful to rural Americans who don’t have the same broadband access as customers living in large cities,” according to a Dish release. “Customers with sufficient internet service can substitute HBO Now, the direct-to-consumer streaming offering from HBO. The majority of DISH’s HBO subscriber base is located in rural areas with limited broadband access and likely won’t be able to watch HBO or Cinemax without a satellite connection,” the release stated.

“AT&T’s actions are a deliberate slap in the face to rural Americans,” said LeCuyer in a statement. “And furthermore, they are anticompetitive. AT&T, a company worth more than $200 billion, is intentionally punishing those who don’t have big-city broadband access, in an attempt to push customers to the only other satellite provider, its own DirecTV.”

AT&T is demanding Dish pay for a guaranteed number of subscribers, regardless of how many consumers actually want to subscribe to HBO, according to Dish.

“AT&T is stacking the deck with free-for-life offerings to wireless customers and slashed prices on streaming services, effectively trying to force Dish to subsidize HBO on AT&T’s platforms,” said LeCuyer in a statement. “This is the exact anticompetitive behavior that critics of the AT&T-Time Warner merger warned us about. Every pay-TV company should be concerned.”

“Dish would welcome binding, baseball-style arbitration to determine the fair market value of HBO and Cinemax,” the Dish release states. “During the arbitration process, AT&T would be required to restore its channels to Dish customers.”

“Rather than trying to force consumers onto their platforms, we suggest that AT&T try to achieve its financial goals through simple economics: if consumers want your product, they’ll pay for it. We hope AT&T will reconsider its demands and help us reach a swift, fair resolution,” said LeCuyer in a statement.

Dish and eligible Sling TV customers will be credited on their bill for time they do not receive HBO or Cinemax, Dish announced, adding the company is also offering customers a free preview of HDNET Movies.

Starz Joins Hulu Streaming Platform

Starz, a Lionsgate subsidiary, on Oct. 23 announced that its app is now available on Hulu, including the online TV service “Hulu with Live TV.”

Hulu, which is co-owned by 20th Century Fox, The Walt Disney Co., Comcast and WarnerMedia, said its 20+ million subscribers can now add the Starz app (for $8.99 monthly fee) and gain access to the network’s live Starz and Starz Encore pay-TV channels, in addition to on-demand current and past seasons of original series “Outlander,” “Power,” “Vida,” “Counterpart,” and “American Gods,” among others.

Movies include Sony Pictures Jumanji: Welcome to the Jungle and Spider-Man: Homecoming, among others.

Hulu with Live TV ($39.99) includes live and on-demand programming from more than 50 sports, news, entertainment and kids’ channels, including CNN, Fox News, ESPN, TBS and local ABC, CBS, Fox and NBC channels.

In a previously announced deal, Hulu has been the exclusive subscription streaming home to past seasons of Starz original series “Power.” Since “Power” launched on Hulu last year, subscribers have streamed nearly 50 million hours of the series.

All past episodes of the drama series through season four are currently available on-demand to all Hulu subs, and now with the Starz app, users can watch all episodes of “Power” – including season five – on supported devices.

Starz joins HBO and Cinemax as premium add-on apps available to Hulu subs. Hulu subscription plans include its $7.99 per month “limited commercials” plan; $11.99 per month “no commercials” plan and the Hulu with Live TV plan.

Morgan Stanley: Netflix Tops in Original Programming

With Netflix spending upwards of $8 billion on original content this year, it might be relieved to know consumers reportedly appreciate the product, according to Morgan Stanley.

The investment bank – and Netflix financial advisor – found that 39% of survey respondents felt Netflix offered superior original programming compared to HBO (14%), Amazon Prime Video (5%), Hulu (4%), Showtime (3%), Starz (2%) and Cinemax (1%).

Morgan Stanley citied Netflix programs such as “Stranger Things,” “House of Cards,” “Black Mirror,” and “Lost in Space,” for driving consumer interest.

HBO hitmakers include “Game of Thrones,” and “Westworld.”

The online survey of 3,100 respondents was conducted in March.