Time Warner Inc(NYSE:TWX): How HBO Now Lost Out On Potential Revenue
People in countries such as Canada, the U.K., Germany, Australia and New Zealand have been taking advantage of virtual private networks (VPNs) to access HBO Now shows such as The Sopranos, Girls and Game of Thrones.
However, HBO is getting concerned that users outside the U.S. are signing up and paying to access its U.S.-only content through VPNs. In regions like Australia, users are watching U.S. exclusive content, like Game of Thrones at just $14.99 a month, instead of the higher charge of $45 a month offered by HBO partner, Foxtel.
Violation of streaming policy
HBO further states that it will cut off users and points out their responsibility to end their automatic billing if they already have any for HBO Now services.
Netflix does it differently
The action of HBO in blocking illicit viewing of its content from restricted locations is in sharp contrast to Netflix’s response to such conduct. Leaked emails from Sony Corp (ADR) (NYSE:SNE) showed how executives at Sony Pictures expressed frustrations at the failure of Netflix to block people streaming the service from countries where it had not launched officially. Netflix doesn’t seem bothered by users accessing its content through VPNs, perhaps hoping that is a lesser sin than piracy.
HBO trying to be a good partner
As for HBO, the company doesn’t want to rub partners, such as Foxtel, the wrong way, by seeming to undercut them through VPNs streaming. That is why the company is aggressively fighting illicit streaming of HBO Now outside the U.S.
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