Four months on from its launch, Time Warner executives have admitted that their streaming-only service HBO Now isn’t making money at this point. Time Warner CFO Howard Averill says “our early experience suggests HBO Now will be a highly profitable revenue stream over time… [but the service will] generate losses for the remainder of the year.”
As of the end of the second quarter of the year, HBO Now is currently in the red as development and marketing costs exceeded the $21 million in additional revenue it has contributed so far.
It has added to subscriber growth, as many as 1.9 million customers so far, but many of the new customers didn’t pay for the service because they received free one month trials. Executives say they expect the streaming service will be an important part of the premium cable channel’s business moving forward.
The company hopes the offering will bring in some of the roughly seventy million cable subscribers who do not currently pay for HBO. And reportedly less than 1% of HBO subscribers have ‘cut the cord’ in favor of HBO Now.