How is hbo funded

The worst is simply multiplying viewers by price per month. Read here for why not. The best way is to attribute the number that the viewers new and returning that the show was responsible for. That sounds low, but in my experience is very reasonable. Using those numbers and a bunch of other estimates—like my own customer lifetime value calculations—it got me to my estimate of the value per subscriber:.

And some of these benefits will carry over for a few years. HBO made a lot of money selling Game of Thrones into home entertainment.

The first two season DVD launches sold hundreds of thousands of units in their first week released each. And I found one estimate where after a year season 1 had sold nearly a million copies.

As I said above, HBO also sells the rights to its shows to certain foreign markets. I assume this rate continued, with a big bump for Season 5 and beyond. Since a lot of the series is filmed in Ireland, HBO takes advantage of some pretty nice tax breaks that have added up over the years.

Then, there is all the merchandise. Oh, so much merchandise. To fill the gap, I made some estimates based on my knowledge of adult TV merchandise. Still, the revenue that makes it back to HBO will be small. First, HBO has to market this series. Fortunately, the show markets itself. Martin and more. Weiss more time and money to get the series right. That just may have been the single most profitable decision in the history of the Home Box Office. The Entertainment Strategy Guy writes under this pseudonym at his eponymous website.

You can follow him on Twitter or LinkedIn for regular thoughts and analysis on the business, strategy and economics of the media and entertainment industry. They do have a built-in audience. In , HBO reported operating income of over half a billion dollars. Is that good growth for them, put in context? HBO has been around so long. Today, in , Netflix and HBO both have very large subscriber bases. You touched on Time Warner ownership.

HBO has been, in recent years, a crown jewel for Time Warner. HBO is actually throwing off cash in Time Warner to use in other things, rather than the other way around. Merchandising revenue of HBO is not a big percentage. They do merchandise, of course, but I think the—merchandising tends to be very big among shows that are, for example, toys aimed at kids. But HBO has made a conscious decision to segment and go after the adult segment, the after 8 p.

A lot of what they show is for mature audiences Martin and HBO. He must have had a pretty big share of stuff like that, based on his idea. When they report figures for how much an episode costs, does that take into account what actors are paid? I think when we look at the financial performance of HBO as reported in financial statements, that takes all that into account. There are lots of ways in which you calculate that.

Looking ahead, is what HBO is doing sustainable from a business practice standpoint? They realize the future is not cable. And they need to wean themselves from that. But to some extent, here is where Netflix has a huge advantage: The incumbent has an advantage, but also a disadvantage, and I think the advantage of Netflix is they have nothing to lose. There is little denying that it creates some of the most popular and innovative programming on cable. With intense competition, including other cable channels as well as movies and online content, HBO must stay on its toes, but has been one of the most successful channels for many decades now.

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