It’s not easy to launch a streaming service, even when you’re the most revered TV company in the world.
HBO revealed that its standalone streaming option in the US, HBO Now, has about 800,000 subscribers—fewer than the 1 to 2 million that some Wall Street analysts were projecting. HBO CEO Richard Plepler announced the news on parent company Time Warner’s earnings call this morning (Feb. 10).
Plepler takes issue with the notion that HBO Now missed the mark. “I wouldn’t say only 800,000 subs,” he said, arguing that the service is still in its nascent state. “We’re just getting started.”
He certainly has a point. Launched in April of last year, HBO Now was only available on Apple devices for its first three months, before moving to Android devices, Roku, and Amazon TV later in the year. It’s still not available on PlayStation or Xbox gaming systems, where HBO says 20% of viewing on HBO Go, the online component given to paying cable TV subscribers, takes place.
HBO is also likely to make more deals with internet providers to bundle the service with broadband internet plans. Today, HBO Now is only available as an add-on to Optimum and Verizon internet customers.
And while HBO did market the product heavily for its launch, the company hasn’t pushed it much in the months since, except when launching on new devices. Time Warner CFO Howard Averill said to expect a boost in marketing for HBO Now in 2016.
The biggest boon for HBO Now, though—and what might lead to a significant increase in subscribers—is more original content. HBO inked Jon Stewart to a four-year exclusive deal late last year. Among Stewart’s tasks will be to produce short-form videos that are geared specifically for HBO Now. Bill Simmons, the popular American sports personality who left ESPN last year, also signed a deal with HBO, and his forthcoming talk show is expected to be catered to HBO Now.
In total, HBO will add 50% more hours of original programming in 2016, according to the company. Game of Thrones returns for its sixth season in April, and, for the first time, no one knows what’s going to happen—not even book readers. New series set to debut this year include Vinyl, a rock music drama produced by Martin Scorsese and Mick Jagger, and Westworld, a sci-fi western based on the 1973 movie of the same name.
Even with the programming increase, HBO Now is never going to be as big as Netflix, which has 75 million subscribers in the US and is adding 600 hours of original programming to its arsenal this year.
But HBO has said that it’s only targeting the 10 million people in the country who have broadband internet, but do not pay for a cable TV package (also known as “cord-nevers”). Of course, the company may be trying to temper expectations.
Either way, its subscriber base may seem small now, but there are plenty of reasons to bet it will get significantly bigger.