It’s never been easier to sit down on the couch, pay for a month of HBO and then power through an entire season’s worth of “Westworld” or “Game of Thrones” before canceling the service in hopes of avoiding further credit card charges.
But although that clever approach might be saving consumers money in an age of ubiquitous cord-cutting and online streaming, it doesn’t work out so well for HBO, which has to deal with inconsistent subscription rates. In the coming months, HBO will try to stem that constant customer churn by enticing more viewers to stick with the premium channel year-round, according to John Stankey, the head of HBO’s parent company WarnerMedia.
“We have customers jumping in and out based on scheduling,” Stankey said on an earnings call Tuesday for WarnerMedia’s own parent, AT&T. If HBO can “smooth out” its show schedule by ramping up the service’s content offerings, Stankey said, it could deter customers from giving up their HBO too quickly and cement longer-term customer relationships.
“The team feels very, very comfortable that we can flex up on our development that rounds out the schedule very nicely,” Stankey said, so that customers will not “jump in and out of it as content comes and goes throughout the year.”
HBO’s strategy highlights the challenges of building a loyal audience at a time when there’s so much good television going around. Whether it’s “Stranger Things” on Netflix or “The Americans” on FX, TV viewers are spending about 3 hours a day watching their favorite shows.
This battle for consumer attention isn’t exclusive to television. But HBO — and the rest of WarnerMedia, including CNN, TBS and TNT — are fast becoming AT&T’s most important tools after the telecom giant closed its massive deal with Time Warner last month.
As more consumers cancel their traditional cable and satellite subscriptions, AT&T is expected to compensate for the trend by piping WarnerMedia’s content over home broadband and mobile data connections.
Americans' love affair with online streaming is only growing stronger: Far more consumers are going to cancel their pay-TV subscriptions this year than previously thought, according to research by eMarketer. Last year, the research firm estimated that 27 million would cut the cord in 2018. But its updated estimate, released Tuesday, puts the figure closer to 33 million.
When HBO realized that cord-cutting could shrink its cable audience, it launched its own online streaming service, HBO Now, to recapture viewers who had gone Internet-only. But in so doing, the company made it more convenient than ever to subscribe just for the shows you really want.
Now it’s grappling with the consequences of that.