HBO's CEO knows you're sharing your password for the company's streaming service, HBO Go — and he doesn't really care.
"It's not that we're unmindful of it, it just has no impact on the business," HBO CEO Richard Plepler said. It is, in many ways, a "terrific marketing vehicle for the next generation of viewers," he said, noting that it could potentially lead to more subscribers in the future.
"We're in the business of creating addicts," he said at a BuzzFeed Brews event in New York.
HBO Go still requires the viewer to be a subscriber to HBO proper — it still requires the cable cord that has caused Netflix to become so famous as a method for "cutting" said cord. Many have questioned whether HBO would unbundle HBO Go from requiring a cable subscription — especially given that password-sharing for an HBO Go account is quite common (as it is for Netflix as well).
"HBO Go is value added — what you want to watch," Plepler said, in response to questions about unbundling HBO Go. "Right now, that's the right model for us. Are we always thinking about optionality, of course we are always thinking about optionality... if the arithmetic changes and made sense in a different way we are not going to be caught without the ability to pivot."
The company is experimenting in the Nordic with direct-to-consumer HBO Go, which Plepler said was doing "very well." When asked directly whether HBO Go was going direct to consumers, he said, "it's all about arithmetic dude, it's all about the math. The thing we are always thinking about is adding value."
When asked about Netflix, Plepler said HBO has "always lived very comfortably among the competition."
In the third quarter last year, Netflix actually passed HBO in terms of subscribers. However, Netflix is still spending a lot of money on original content in order to attract new subscribers — a tactic that appears to be working, but puts pressure on the company's bottom line.
HBO, for its part, also has an enormous amount of original content — though it isn't any one show that leads to people subscribing to HBO, he said. "There's a canard that Game of Thrones…will generate subscribers. It's just not true," he said. "It isn't about one particular show, it's about the over-arching leverage of the HBO Brand."
The rivalry, however, still runs deep. Ted Sarandos, Netflix's chief content officer, told GQ in an interview in February that the company's "goal is to become HBO faster than HBO can become us."
But Plepler doesn't seem too stressed. "We spend our time focusing on playing our game as well as we can. We're very, very comfortable with the array of talent that comes through our door."
Matthew Lynley is a business reporter for BuzzFeed News in San Francisco. Lynley reports on Silicon Valley and the tech industry.
Contact Matthew Lynley at email@example.com.
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