HBO mulls unique broadband tie-up, Game of Thrones distribution model to remain unchanged

HBO could widen access to its HBO GO online streaming service by teaming up with broadband Internet providers for customers who do not subscribe to a cable TV service, HBO Chief Executive Richard Plepler said.

Plepler told Reuters on Wednesday evening at the Season 3 premiere of HBO's hit TV show "Game of Thrones." "Maybe HBO GO, with our broadband partners, could evolve."

HBO launched HBO GO in 2010 to let subscribers view its shows over the Internet on devices such as Apple Inc's iPads. The service has about 6.5 million registered users, compared with more than 100 million for HBO's main service globally.

However, HBO GO is only accessible to viewers who pay for cable TV service, plus an extra fee for HBO. This means monthly bills of $100 or more typically for people who want to use HBO GO.

Plepler said late Wednesday that HBO GO could also be packaged with a monthly Internet service, in partnership with broadband providers, reducing the cost.

Customers could pay $50 a month for their broadband Internet and an extra $10 or $15 for HBO to be packaged in with that service, for a total of $60 or $65 per month, Plepler said.

"We would have to make the math work," he added.

HBO, owned by Time Warner Inc, relies on large financial support from its cable and satellite TV partners to help distribute and promote its shows.

Plepler said in January that it would not make business sense to provide an Internet-only product that circumvents its existing distribution network.

Internet-only rivals such as Netflix Inc and Amazon.com Inc are challenging this approach by delivering original programming directly over the Internet.

BTIG analyst Richard Greenfield said that for now, it is not within HBO's economic interest to offer a broadband-only product, since it endangers HBO's business model.

"The current model is good to them. If it starts to break down, I'm sure HBO will evolve," Greenfield said.

He added that HBO GO gives the network an edge against other cable networks if since it is "increasingly on everybody's smart phone, tablet and desktop."

Game of piracy
Game of Thrones has been pirated heavily online, a trend that some industry experts blame on HBO's tight control of how and when the show can be viewed and the cost of such access.

Most of the piracy occurs outside the United States and HBO is trying to control it, Plepler said.

George R.R. Martin, author of the books upon which the TV show is based, said most of the piracy happens in Australia where viewers have had to wait about six months to see the show.

If Australian viewers got access to Game of Thrones at the same time as in the United States, that would reduce piracy, Martin added.

An HBO spokesman said that 176 markets will air season three of the shows within a week of the United States premiere.

John Bradley-West, one of the actors on the show, said piracy may be reduced if HBO offered a full season pass via Apple's iTunes store for viewers to stream online a day after the official TV broadcast.

HBO is not changing its Game of Thrones distribution windows for DVDs and electronic sell-through, or EST, the HBO spokesman said. EST is a way of distributing video over the Internet that allows viewers to download movies and TV shows.

In the past, Game of Thrones has been available on iTunes and DVD several months after its initial release.

© Thomson Reuters 2013