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HBO gives Silicon Valley the royal treatment
March 31, 2013
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SAN FRANCISCO: As HBO adapts its television empire to the digital age, it is rolling out the red carpet to Silicon Valley.

The pay TV network put on showy “Game of Thrones” season premiere parties last week in Silicon Valley and Seattle, ground zero for the revolution underway in television viewing habits.

Digerati turned out by the hundreds to immerse themselves in the fantasy realm of Westeros, some wearing Twitter logo T-shirts, others Google Glass, the Internet giant’s yet-to-be-released futuristic eyewear.

Analysts say HBO was looking to strengthen its alliances with an emerging new distribution network and the social media companies that help spread the popularity of its original programming.

“Welcome to the new HBO,” said Will Richmond, a longtime cable executive and publisher of VideoNuze.com. “Two or three years ago, you wouldn’t have seen this mentality from HBO. But the network is trying to be much more tech forward and immerse itself in the tech community.” HBO can use the assist from the tech world. It’s being assailed by mounting competition from high-concept TV shows on other premium channels, cable networks and new-media upstarts. Increasingly it’s turning to technology for a competitive edge.

HBO credits Apple Inc., Amazon.com Inc., Google Inc. and Microsoft Corporation with helping boost the popularity of HBO Go, the online streaming service that makes series and films available to anyone who subscribes to the channel. In addition to giving its nearly 29 million viewers more ways to watch its programming on mobile devices and tablets, HBO is offering enticements such as putting episodes of popular shows like “Game of Thrones” on HBO Go before they air on cable.

“With TV, it’s not just about having a great piece of programming now. It’s about delivering that programming on whatever device people want to watch it on, whenever they want to watch it,” HBO Chief Operating Officer Eric Kessler said. Time Warner-owned HBO also relies on Twitter Inc. and Facebook Inc. to spread the word about its original programming. The “Game of Thrones” trailer on Google’s YouTube was viewed more than 18.5 million times in one week.

HBO is also making a substantial commitment to technology inside its own operations. In December, HBO named Xbox co-founder Otto Berkes as its chief technology officer. It also has opened a software development office in Seattle where 14 engineers create new digital features for HBO Go. “Game of Thrones” was one of the shows that launched HBO Go, and HBO was an early developer of features for “Thrones” on Xbox’s Smart Glass app.

“HBO is very good at embracing new technology,” SNL Kagan senior analyst Deana Myers said.

Time Warner has long championed TV Everywhere, which lets networks like HBO reach viewers online and on mobile devices. But HBO relies on hefty financial support from cable and satellite TV to distribute and promote its shows, so it’s cautious how it puts its programming on the Web.

Time Warner is very protective of HBO for good reason. Television is the most lucrative part of the entertainment conglomerate’s business, and HBO is the crown jewel. Its cable network took home more prime-time Emmy and Golden Globe awards than any other network, with “Game of Thrones” snaring six Emmys last year. Time Warner doesn’t break out HBO’s financial performance, but research firm SNL Kagan says HBO collects a princely sum from pay TV operators in the US for its programming, bringing in $3.7 billion last year - an amount expected to grow to $3.8 billion this year.

With subscriber growth mostly flat, HBO is keeping an eye on the future as Internet and mobile technologies reshape how people watch TV. HBO Chief Executive Richard Plepler says his company may “someday” team with broadband Internet providers to offer its online streaming service to customers who do not subscribe to a cable TV service.

“Right now we are very excited about the enthusiasm around Go,” Plepler said. “For right now, we have the right model.”

Still, many young fans of HBO shows are cord-cutters. They mooch HBO Go passwords from parents and swap them with friends or stream the shows illegally.

“We do have to contend with the fact that our show is the most pirated in the world,” said George R.R. Martin, author of the series of “Game of Thrones” fantasy novels.

And HBO has its own epic tale of warring factions for the future of Web streaming. Internet-only rivals Netflix Inc. and Amazon.com have begun to encroach on HBO with plans to deliver original programming over the Internet. Netflix recently debuted “House of Cards,” a political drama starring Kevin Spacey.

MCT

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