HBO has a bold plan to make cutting the cord the only way to watch shows like Game of Thrones in some parts of the world. The company today announced it will launch its first streaming service in Spain by the end of the year and do away with its pay-TV option entirely, according to a report from Bloomberg. When current licensing deals with cable TV operators end, the new internet service will be the only way to access HBO in Spain.
The initiative is an ambitious play, but it makes sense. Spain has lower cable subscriber rates than the US and a large amount of online piracy. So HBO is sacrificing its licensing revenue to appeal to homes that either gave up on cable or never bought it in the first place. "We follow the money," HBO chief executive Richard Plepler told Bloomberg. "We’re making a determination of where we think the most profits lie." The company has 138 million subscribers, two thirds of which are located outside the US, where broadband-only rates are far higher than the US, according to research firm Parks Associates.
HBO is cutting the cord in Spain to take on Netflix
The Time Warner-owned network has made similar moves in the past. The company's US streaming service, HBO Now, launched in April of last year, although US customers have been able to access a subscriber-only web service, HBO Go, since 2010. It also launched a streaming service in Norway, Denmark, Finland, and Sweden in 2012 called HBO Nordic, which has about 650,000 subscribers and also offers shows from AMC, Starz, and Showtime. HBO now has a similar service in Colombia that it hopes to expand to other Latin American countries.
Outside of these services, HBO has only made its content accessible outside of cable TV subscriptions in the form of paid downloads on platforms like iTunes and streaming of select shows on Amazon Prime Video. The launch in Spain is different because of HBO's plans to discontinue its cable option and force customers toward the online service. "Spain is not the first and Spain is not the last," Simon Sutton, HBO’s president of international and content distribution, told Bloomberg. The company wouldn't say where else it's planning a streaming service.
HBO owns the rights to most of its shows
HBO is very much competing with Netflix on the international front. Earlier this month, Netflix launched in 130 new countries including Russia and India, and it's been available in Spain since last October with a promotional deal tied to telecom giant Vodafone. Yet unlike Netflix, which is unable to broadcast certain shows like House of Cards in every country its service is available, HBO does own the rights to a majority of its programming. The company did not disclose to Bloomberg how much the new Spain service will cost or which shows it will have, but Plepler confirmed it would look very much like the fully featured HBO Nordic.