HBO still needs Pay TV, even if it seeks some online independence in Nordics

HBO content will be made available via Pay TV in the Nordics, including for multi-screen viewing, thanks to a deal with TeliaSonera (see separate story). Despite this, the apparent willingness of HBO to launch an online service in the Nordics independently of the region’s Pay TV operators (with a service that was trailed before the TeliaSonera announcement) has raised eyebrows because it would be a rare example of a major pay channel owner making its premium content available for multi-screen viewing outside of a TV Everywhere package.

The independent HBO subscription service for Sweden, Finland, Denmark and Norway will give access to hit series like True Blood and provide the latest episodes immediately after the U.S. premiere. And this is what many U.S. bloggers dream about; you do not have to look hard to find them online urging HBO to split from Pay TV operators in their home market.

One of the reasons commentators have given for HBO’s continued reliance on Pay TV in the U.S. is the cost of marketing and customer care without them. So it was interesting to see what Patricia Lynch, Content Strategy & Acquisitions for the U.S. telco and IPTV giant Verizon, said about the mutual reliance of premium channel owners and operators this week at OTT TV World Summit.

Talking about HBO, Showtime and their like, she commented: “They have high churn rates and rely on constant marketing and they enjoy a great deal of marketing from Pay TV operators so that is what stops them from leaving the Pay TV experience. It is the same type of churn that Netflix experiences and I assume we will experience with Redbox.”

She was referring to Redbox Instant by Verizon, the physical plus digital (streaming) movies service that is the result of a joint venture with Redbox, which runs a DVD and games rental service using automated kiosks in stores and malls across the U.S. “When you are selling products with a premium tag you have to keep proving the value to your customer. Companies like HBO and Showtime understand the real benefit they get from Pay TV.”