Stand-alone Streamed HBO Might Cannibalize Linear HBO Quite a Lot, Study Suggests

HBO keeps arguing that its new streaming service targets consumers who buy high speed access, but not linear video subscriptions or HBO. In other words, a stand-alone, streamed version of HBO will not cannibalize HBO as sold by its video distributiors.

But there are some hints in a new survey that as much as 91 percent of the most-likely buyers of a streamed, stand-alone HBO service are, in fact, present buyers of HBO as part of their linear video subscriptions.

If so, the risk of cannibalization of linear versions of HBO, or perhaps even the whole linear video subscription, is extremely high. 

The new study by Parks Associates  finds 17 percent of U.S. broadband households are likely to subscribe to an over-the-top (OTT) video service from HBO.

Among these likely subscribers, 91 percent are currently buying linear video subscriptions, and nearly half say they would cancel their linear subscription service after subscribing to theHBO OTT service.

The research firm reports the average head of household in a U.S. broadband household watches nearly 3.5 hours of OTT video each week on a TV set.

Households with high speed access in 2010 consumed about 1.6 hours a week of Internet delivered video. In 2014, such households watched three hours a week.

In 2010, about 17 percent of video viewing in high speed access homes •was on devices other than the TV. By 2014, that figure increased to over 31 percent.

As you might guess, consumer younger than 35 watch less than seven hours a week of linear video on a TV. In 2013, the typical U.S. adult watched 4.5 hours a day. In other words, typical weekly TV viewing in 2013 represented 31.5 hours.  

Young consumers are also far more likely to say that online video is just as good as subscription TV, Parks Associates says.

The average monthly amount paid by broadband households for a linear TV subscription service has grownfrom $74 to $82 over the past three years, says Parks Associates.

The average amount paid per month for a triple play package (subscription TV, landline voice, and broadband) increased from $146 to $160 over the same period.