HBO NOW: King of the crackdown on unblockers but bottom of the heap for subscribers

HBO Now might have cracked down harder than rivals on region cheats* but it has suffered for it in subscriber numbers.

On an earnings call, parent company Time Warner has revealed HBO Now has 800,000 paying subscribers, well short of the up to two million analysts were picking.

HBO NOW launched in April last year, priced at $US14.99 a month. The idea was that it cut out middle men old (cable TV companies) and new (like Netflix) in favour of allowing consumers to directly subscribe to an HBO app that streams hit shows like Game of Thrones and the new Vinyl, co-produced by Martin Scorsese and Mick Jagger.

Many curious Kiwis signed on. Although launched initially for the US market, the HBO service was as easy to register for as the likes of Netflix US, Amazon Prime and Hulu. Just a couple of weeks after its launch, HBO Now sent warning emails to New Zealand-based subscribers, and others outside the US (apparently after having used the relatively low-tech method of sifting through its subs database for ".co.nz" emails used for sign-up and other tell-tale signs of non-US residency).

While Netflix's latest crackdown targeted unblocking services (it began tepidly, then dribbled out to nothing), HBO emailed subscribers outside the US, giving them three days to prove they were within the service's terms and conditions or have their account deactivated.

Sky TV and other local rights holders cheered at such front-foot action but it has obviously weighed on HBO NOW's success (as has the price, to be fair: $US14.99 a month is nearly double rivals that aggregate much more content).

Netflix will be bearing HBO NOW's poor result in mind as it decides whether to push harder with its own geoblock-busting efforts.

The US streaming giant recently reported 75 million subscribers worldwide (71 million paid), a net gain of 5.5 million over the last three months. Rival Amazon recently reported 54 million paying subs to its Prime service, which includes streaming video. That's a net gain of 15 million over the past 12 months.

Although it's off to a modest start, HBO NOW is still a concern for Sky TV and newer rivals like Netflix and Lightbox. If it does gain momentum, other channels will follow (and CBS-owned Showtime has already followed), and Time Warner could spread the concept to more countries. The streaming video on-demand market is brutal enough without this additional headache.

* NBR has published mainstream legal opinion that accessing the likes of Netflix US, Hulu, BBC iPlayer etc is within the law, if not each service provider's terms and conditions, as an online version of parallel importing (which, contrary to expectations in some quarters, is safe under the TPP. Some like Lowndes Jordan partner Rick Shera see it as clear cut. Others like Baldwins' IP specialist Paul Johns say a test case is needed to interpret the Copyright Act (1994), which is understandably vague on the subject, having been written before the internet went mainstream, let alone streaming video on-demand.

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