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HBO is choosing to be selective about the amount of video content it chooses to acquire and produce, an approach unlike its video rivals, like Netflix, which are aggressively broadening their video libraries, The Wall Street Journal reports.
The company is looking to focus more on quality, and has embraced the idea that it doesn’t need to outbid competitors for every prospective show. This is reflected in the number of scripted original series HBO has in relation to competitors — HBO has 21 original shows, whereas Netflix has 88 and Amazon has 28.
Despite its scripted show count falling below other digital video competitors, HBO still performed well financially in 2017. Between HBO’s linear TV channel and streaming service, HBO Now, the company estimates to have added more subscribers in 2017 than ever before. Moreover, HBO’s subscription revenue increased 12% from Q2 to Q3 2017, its highest quarterly subscription revenue in 13 years. HBO’s Q3 success benefited from the seventh season of its global hit Game of Thrones, which aired entirely during the quarter due to a delayed rollout, according to Forbes.
HBO’s content strategy is likely due to two key reasons:
- The approach allows HBO to better cater to each of its show creators. Companies with big libraries of programming can’t afford to respond to show creators' concerns as closely as companies with smaller libraries. This sentiment was echoed by HBO’s Programming President Casey Bloys, who implied that a company like Netflix wouldn’t be able to cater to the needs of creators as well as HBO can. Bloys could have been referring to HBO’s ability to provide marketing or production support to each of its shows in a way that Netflix may not be able to. This pitch helped HBO retain its comedian Jerrod Carmichael, who Netflix attempted to poach.
- An aggressive content strategy hasn’t fared well for the company in the past.HBO used to bid aggressively on promising show prospects, but many of these projects never were produced or nixed before production ended. The company looks to cut down costs and boost time efficiencies by being more calculated in the amount of content it acquires.
At the same time, HBO’s content strategy could be lowering its chances of acquiring the next hit show. Competitors could snag the next "Game of Thrones" or "The Handmaid’s Tale" if HBO fails to move aggressively. This could help companies like Netflix and Amazon Prime retain their top spots in the digital video space moving forward.
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