HBO Goes Where No Cable Network Has Gone Before

How will HBO's decision to offer access to non-cable subscribers via their over-the-top (OTT) devices change the cable landscape?

Cord cutters across the United States flocked to social media to rejoice last week when HBO’s chief executive Richard Plepler said, “It is time to remove all barriers to those who want HBO.” The next day CBS announced they will do the same when CBS President Leslie Moonves said, “CBS All Access is another key step in the company’s long-standing strategy of monetizing our local and national content in the ways that viewers want it.” HBO is the first cable network to take this leap but does CBS’s announcement the next day signal the start of a trend with more networks to follow? And if this is the case, what are the implications to marketers?

Here are a few facts about cord cutting and OTT video viewing: 

  • In 2013, for the first time, the number of Americans who pay for TV through cable, satellite or fiber services fell by more than a quarter of a million, according to research firm SNL Kagan
  • 13% of Millennials (age 16-34) have no pay TV service along with 9% of non millennials (age 35-64) (Source: Verizon Digital Media Services, “Millennials and Entertainment,” March 6, 2014)
  • In 2014, 14.8% of U.S. pay TV subscribers said they were definitely, moderately, or somewhat likely to cancel their pay TV services within the next 6 months (Source: The Diffusion Group, as cited in press release, June 5, 2014)
  • Of U.S. digital video viewers in 2014, 48% used an internet connected TV to view original digital video content (Source: IAB’s “2014 Original Digital Video Consumer Study”)

It can’t be denied that digital video is gaining popularity and is showing no sign of slowing down. HBO has positioned themselves to take advantage of this trend but only time will tell how big that advantage might be. It’s fair to say that if this does go well for HBO it could become the new trend among networks and as a result would change the cable television market completely. But what does this mean for marketers?

It means we need to consider television differently than we have in the past. We need to think more about the content our audience is consuming and worry less about what screen they are viewing it on. We can do this by focusing on reaching the audience and engaging them within the content they are consuming, regardless of the platform it is being consumed on. If marketers take this approach it will be easy to evolve and be nimble as this video landscape changes in the coming years. Just where those changes will take the industry at this point is hard to predict.

 

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