At $15 per month, is HBO NOW too expensive when competing against lower-cost services like Netflix and Amazon Prime? That’s what the network wants to know, and it’s currently asking customers who have recently completed their trial of the new, over-the-top streaming service if they would be interested in subscribing at lower price points. The company even specifically suggests a few new pricing tiers to consider, including a three-month subscription for $29.99, six months for $59.99, or a year for $99.99.
Such options would cut the service down to $9.99 for the 3 and 6 month plans, and $8.33 for the 12-month plan.
This question was a part of a customer satisfaction survey which recently arrived in the email inboxes of those who chose not to sign-up for HBO NOW after their free trial period ended. When the respondent noted that the price was an issue, the following screen of questions appeared (via CutCableToday, also spotted by Geek.com):
The screen suggests that these price points would be presented as one-time offers to encourage new sign-ups, rather than replace the standard pricing for the service. The strategy of providing access to HBO content for a reduced fee that later balloons into a larger one is something the network is already familiar with, as it regularly runs promotions with cable and satellite TV providers who provides the channel for a discount at various times of the year.
As of today, HBO NOW is one of the pricier standalone streaming video services on the market. For comparison, Netflix is $8.99/month, Amazon Prime, which also includes other member benefits including free, 2-day shipping, is $99 per year, and Hulu’s paid tier is $7.99 per month. Meanwhile, streaming cable TV and ESPN-over-the-top provider Sling TV starts at $20 per month – only $5 more than HBO, but it includes nearly two dozen channels.
Arguably, HBO’s content is more valuable which is why it’s priced at a premium, but it still may be too high to attract the legion of cord cutters who are ditching cable TV for financial reasons. This crowd may have already committed to popular services like Netflix and Amazon Prime as well, and could be hesitant to add one more to their cord-cutting mix.
After all, though HBO’s shows like “Games of Thrones” are hugely popular, they’re also among the most pirated. In fact, despite the launch of HBO NOW, the fifth season premiere of “Game of Thrones” set a new piracy record by being downloaded 13 million times, with more of the downloads coming from the U.S. than any other country.
That indicates that while demand for HBO shows is high, prices for HBO NOW haven’t found that sweet spot that makes paying for the content the easier choice versus illegally torrenting the episodes.
It’s an age-old problem – and one that the music industry also once faced, as it tried to figure out how to encourage people to move away from Napster and other p2p file-sharing services, and actually pay for songs and albums instead. (Apple’s iTunes and its hardware devices were a huge help with this earlier dilemma, of course, which is one reason why HBO likely teamed up with Apple to make its first supported hardware device the Apple TV.)
Despite the appearance of the new, suggested pricing, don’t get your hopes up for a cheaper version of HBO NOW any time soon. The company is sending out a number of customer satisfaction surveys in the service’s early days in order to collect customer feedback and data. What it eventually chooses to do with that data, of course, remains to be seen.
Adds an HBO rep, when asked about the price points being discussed, “HBO Research conducts surveys all the time on a wide range of topics. The questions should never be interpreted as suggesting a strategic direction.”