HBO's Online Channel Surpasses 5 Million U.S. Subscribers

(Bloomberg) -- HBO’s online customers in the U.S. have more than doubled in the past year to more than 5 million thanks to sales of subscriptions on Amazon and new streaming TV services like DirecTV Now, according to a person familiar with the matter.

When it launched in 2015, the network was one of the first premium channels to be available to consumers who don’t have a cable TV subscription. The move was seen as risky, with industry watchers arguing it would jeopardize HBO’s relationship with traditional pay-TV distributors like Comcast Corp.

HBO's Online Channel Surpasses 5 Million U.S. Subscribers

But the web-only version of the channel has grown quickly. While about half of the new online customers signed up via the standalone HBO Now service, the other half came from HBO being made available on new online-TV services like AT&T Inc’s DirecTV Now and Amazon Channels. In February, HBO’s web service had more than 2 million online customers.

HBO’s online subscribers represent about 10 percent of its U.S. customers. The network has 142 million subscribers globally.

HBO is owned by Time Warner, which is being acquired by AT&T in a deal that’s been contested by the U.S. Department of Justice.

The subscriber growth came amid a record year for the channel, which saw revenue increase 7 percent because of more subscribers and higher prices. Overall, HBO and its sister channel, Cinemax, added more than 5 million subscribers across traditional and online platforms in the U.S. in 2017 -- the largest annual increase ever.

Over the past few years, HBO has renegotiated deals with pay-TV operators. Under the new contracts, instead of charging higher rates, HBO gave cable companies a bigger share of the subscriber fees, providing an incentive to sell the channel. HBO has also benefited from the popularity of shows like “Big Little Lies” and “Game of Thrones.”

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