Entertainment: HBO

HBO is a multi-billion-dollar global business that makes money in lots of ways:

  • Primary revenue comes from cable subscriptions. HBO is a premium network that requires cable viewers to pay extra to add HBO to their plan and HBO gets at least half of this fee per user. HBO therefore has plenty of revenue with which to spend on developing its programming. It has a reputation as a powerhouse for creating award-winning shows, which serves to keep subscribers coming back and attracting new ones. It is also a virtuous cycle where producers, directors, and actors keep coming back because they enjoy the freedom to develop quality content.

 

  • HBO Now was launched for viewers who don’t have cable and want direct access. The company makes even more per-user with this because there’s no middlemen to pay.

 

  • Shows are licensed and syndicated to other networks and regional markets (over 200 globally), and at a premium price too.

 

  • HBO Sports is very lucrative with lots of exclusive deals like HBO Boxing which owns the rights to live boxing world championship matches.

 

  • Merchandising, DVDs, and events for major shows like Game of Thrones also adds significant revenue, similar to a blockbuster Hollywood movie.

 

  • Product Placement: There are also advertising revenue opportunities. HBO is again unique because it doesn’t air commercials during its programming, but sponsors are always willing to pay to have their products placed directly into a program to enhance its appeal. Apple Inc’s computers and Chrysler’s Jeep vehicles are frequently seen in popular shows and films, in the hopes that consumers associate the products with their favorite character or setting.