"Utter joy and some relief." That's how a Time Warner Cable spokeswoman described customers' reaction in a December story in The New York Times that the carrier had finally struck a deal to offer the HBO Go streaming service.
That is in fact how HBO Go subscribers feel about the service, which has become the standard-bearer for streaming TV. Netflix's Reed Hastings has called it his chief competitor.
The business strategy behind HBO Go, which lets subscribers watch the channel's content on any high-speed internet-connected device once they've authenticated their cable subscription, is to extend the life of an HBO subscriber -- get them to stick around for 27 months instead of , say, 24. Early signals are positive: The app has had 6 million downloads, and 85% of users say they're watching significantly more HBO.
On a broader scale, HBO Go represents an environment in which consumers buy a subscription to content they can access via iPad, Android phone, Samsung TV, Xbox (coming within the month) or other device.
The service also illustrates how integral user interface has become to content consumption. It's not just HBO's deep library but also the intuitive design, developed with Interpublic Group of Cos.' Huge , that make the app.
The 2-year-old service took off last May, when HBO offered a mobile app through Apple 's App Store. (It had been available on PCs and Mac computers.) Penetration among subscribers jumped to 80% from 25%; 99% of subscribers now have access to HBO Go. HBO also began offering its entire content library through HBO Go, up from 400 hours of content at launch. Today, 70% of the programming on HBO Go is original, and 25% is movies.
"What we're doing is following the consumer, who wants this content, wants to access it whenever they want, wherever they are," said HBO Co-President Eric Kessler. "It's become an expectation helped along by technology, the consumer-electronics companies and, now, the networks creating these products."
While the HBO Go experience might be the best example of a future sans cable, Mr. Kessler insists that selling the service directly to consumers is not in the plans. He positions it as a boon not just to HBO but to its cable providers.
"HBO is a very profitable business for them," Mr. Kessler said. The intent behind HBO Go is to cultivate happy, HBO-addicted subscribers. Plus , he added, "our subscribers are their subscribers."
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