To beat the tough competition, cable channels are spending millions of dollars for bringing forth crisp and freshly brewed content to their audience and air hit shows. In this race of grabbing maximum audience attention and increasing subscriber base, the nation’s most popular and commonly watched channels like HBO and STARZ have millions of subscribers globally. You can find HBO as a premium channel on the Spectrum channel lineup. Being one of the favorite channels of the American household, you are likely to get it as part of all the good cable TV plans and packages. What makes HBO so popular? Of course, its outstanding content and originals mostly turn out to become blockbusters for all the right reasons. With the channel investing so much money on its content creation, how does it make money? Well, here is the answer to this question. Keep reading to find out:
Content Creation comes with a Price
With more than 67 million subscribers worldwide, there comes the responsibility of assuring quality content and meeting their expectations. That is expensive. HBO hit shows like True Bloodcost upto 60 million dollars. Similarly, other blockbuster shows cost a fortune in the making and creation phase. But once they are aired and gain fan following, it is worth it.
HBO generates its major revenue from subscriptions. It has earned as many as 6 billion dollars from subscription fees. It charges around 9.99 to 14.99 dollars per month. According to 2020 statistics, HBO’s 89.5% revenue came from subscriptions.
HBO is unique when it comes to being advertisement-free. The viewers do not have to worry about interfering commercials killing the excitement of the climax scenes of their favorite shows. The viewers cannot get enough of their favorite shows and love the fact that there are no annoying advertisements to worry about. The sponsors however are also interested in paying for the products that are a part of any of the programs. For instance, Apple computers are often frequently seen as part of the majority of TV shows and movies. This in turn increases the product appeal and boosts sales.
HBO also makes a major part of its revenue from content licensing. When its content is aired or streamed on other platforms, it charges for licensing its content. Being the property owner of its original content, it licenses its TV shows to the other networks and charges a significant amount of money in return.
Money from Merchandizing
Look around and you will find fans of Game of Thrones or Euphoria. HBO makes use of it by making money through selling merchandise of the HBO original shows. You can visit the HBO shop to find out exciting items. Be it toys, shirts, the merchandising is big when it comes to the blockbusters like Game of Thrones or True Blood.
HBO launched an HBO Max subscription plan that costs around $9.99 per month. It costs less but comes with advertisements. So subscribers can expect 3 to 4 minutes of commercials every hour. So HBO makes money by airing these advertisements.
With HBO GO and HBO Now, HBO knows how to ace the game and combat the cord-cutting trends. So HBO is working on sustaining its business and retaining its subscriber base, amidst the decline of cable TV. Though Netflix is a tycoon of the streaming industry HBO has tons of subscribers hooked to its shows that making itstand strong in the entertainment world. We often see various streaming platforms offering access to HBO hit shows that are always in high demand, which is another major stream for the channel to make heaps off the money by licensing its content.
The Bottom line
The fact is that without a doubt, those who watch HBO cannot live without it. And it comes with no surprise since the content it produces is extraordinary and innovative, always leaving the audience completely indulged in it. This is why it has been one of the most successful channels for so many years and continues to carry on its legacy for years to come, also helping it make great revenues.