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Cable Technology Feature Article

November 04, 2010

HBO Losing Domestic Subscribers

By Ed Silverstein, TMCnet Contributor

The evidence in favor of a stand-alone HBO online is mounting, according to the Wall Street Journal.

Time Warner (News - Alert) reported Wednesday that the cable TV channel's domestic subscriber count, including Cinemax, will drop 1.5 million by year-end from 41 million at Dec. 31, 2009.

Executives said there was little evidence that subscribers were "cord-cutting" —disconnecting in favor of online video. Instead, executives blamed the end of a "very aggressive" promotion at Dish network last year for most of the subscriber loss. That means there will be little revenue impact.

Other factors, according to the Journal, include another TV provider cutting back HBO promotion and the economy. But none of the arguments from executives proves cord-cutting didn't play a role in the lower numbers.

The Journal explained that the weak economy combined with the existence of cheap and relatively new alternatives like Netflix's streaming service may be causing some people to disconnect when they might not otherwise.

The disclosure also spotlights how anemic HBO's domestic subscriber growth has been in recent years.

The 1.5 million drop would take HBO/Cinemax's subscriber count back to 2005 levels. Moreover, the previously reported growth in 2009 was only 100,000, so Wednesday's disclosure implies HBO's subscriber count would have dropped last year if not for the Dish promotion.

HBO Inc.'s subscriber base may be down, but parent company Time Warner says that the premium cable channel will still report record revenues and profits, according to Broadcasting & Cable.

In a related matter, TMCnet reported that HBO says it's wrapping up its drama "Big Love" after the upcoming fifth season.

The series deals with a Salt Lake City businessman and his three wives. The network said the series will return for a final season Jan. 16.

Ed Silverstein is a TMCnet contributor. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf