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Time Warner’s Focus on Original Programming for HBO Now


May. 5 2016, Updated 8:06 a.m. ET

Game of Thrones premiere on HBO Now not without its glitches

Time Warner’s (TWX) HBO’s Game of Thrones has proven to be a winner for the company in terms of its program ratings.  According to an April 2016 report from the Hollywood Reporter, Game of Thrones’ season 6 premiere garnered a record 10.7 million viewers across linear television networks and HBO’s streaming services, including HBO Go and HBO Now. According to the report, citing data from TorrentFreak, the season 6 premiere also saw 1 million downloads of the episode.

However, it was not without its glitches as viewers for HBO’s streaming services HBO Now and HBO Go complained about “excessive buffering,” according to a FierceCable report from April 25. Dish Network’s (DISH) Sling TV had also experienced technical glitches during the March Madness tournament.

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Early last month, Time Warner referred to its content library at a Deutsche Bank (DB) investor conference, stating that HBO has a lower content budget at $2 billion a year. Around $1 billion of that is for original programming.  The company also stated that HBO is targeting around 600 hours of original programming this year.

According to a BloombergBusiness report citing data from MoffettNathanson, and as the above chart indicates, while Netflix (NFLX) is expected to spend around $5 billion on original programming, Time Warner is expected to spend $4.6 billion on original programming. In contrast, Discovery Communications (DISCA) and The Walt Disney Company (DIS) are expected to spend a relatively lower amount on original programming—$2 billion and $2.8 billion, respectively.

Revenue contribution of HBO

In fiscal 2015, HBO (Home Box Office, including HBO Now) and Cinemax had an addition of 2.7 million subscribers in the United States. The company expects HBO’s subscription revenue growth to soon be in the high single digits.

Netflix makes up 0.74% of the PowerShares QQQ ETF (QQQ). QQQ holds 4.4% in the television sector.


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