Fierce competition expected in the Hungarian streaming market, HBO GO is ready for it

English2019. szept. 29.János Devecsai

HBO GO will begin to grow aggressively in Hungary through 2024. They are not afraid of competition and are developing new films and television series that will continue to build on their successful offerings. “Everything depends on the content,” said Tibor Riczu, digital marketing director at HBO Europe, in an exclusive interview with Novekedes.hu.

How can you evaluate the future of HBO GO and streaming services in general? Is traditional television in danger in Hungary and in the world?

HBO is present in 12 countries In Central and Eastern Europe, including Hungary, with HBO GO D2C (direct-to-consumer) and we are in a very good position. The number of subscribers, the amount of content watched, and the life cycle of subscribers show a better picture than in many neighbouring, more populous or technologically advanced countries. We work closely with our counterparts in Northern Europe (HBO Nordic) and with the Spanish and Portuguese teams, so that we can see how successful we are compared to them.

The Scandinavian market is by far the most advanced in terms of online video consumption, but we can compete with them on several different terms.

The Central and Eastern Europe (CEE) region is the only one, even within Warner Media’s global market, where a strong traditional pay-TV package with 5 channels and a real direct-to-customer (D2C) pillar coexists. These D2C customers use only the HBO GO service without any linear TV subscription. So there is a growing demand for our content offerings for our own production content and from purchased content.

Building on this, we are working to maintain the current growth of D2C programming, so we plan a dynamic, almost aggressive growth by 2024, without adversely affecting the time spent on linear subscription television.

Although it is a matter of time, Disney+ will come here as well. Are you not afraid that greater competition among streaming providers will ruin each other's business? How many streaming service providers can profitably service the domestic market?

The Hungarian market can support much more than the existing two providers. Two years after our launch we are still the leading content provider and we also play a serious educational role with HBO GO. We are not scared at all. Our success will depend on what content offerings the different providers offer and which platforms will meet the changing needs of the consumers.

With over 40 years of tradition and the support of Warner Media, we can certainly build on our content production. In the Scandinavian markets, 3-4 strong players provide several smaller thematic services that have found their audience well.  That population has on average 2 active streaming subscriptions, which are dynamically changed according to their current needs. After all, that’s the essence of on-demand viewing. In Hungary today, this number is still well below 1 and is growing quite slowly.

What are the Hungarian user habits? What movies or television series are the users primarily interested in on HBO GO? Would people rather watch movies or series?

There are no unique Hungarian user habits, as there’s hardly any difference when comparing HBO GO streaming consumer data in Hungary relative to Poland, the Czech Republic or Romania. The difference is between the viewing habits and consumed content of the linear HBO GO clients and the D2C clients. While the former group is overrepresented on a personal computer/laptop, the latter group watches content mainly on smart TV and mobile devices. The average number of weekly admissions and the time spent on content consumption is approx. 30 percent higher for D2C customers, but we must take into consideration that the linear clients can still choose from 3-5 different TV channels.

We are finding that domestic consumers are not waiting for the dubbed episodes. They start following the subtitled series from the day of the premiere. Also, the particular day of the premiere does not matter, whether a series premier occurs on a Tuesday, a Thursday or even on a Monday.

The consumption of movie and children’s content has shifted a bit towards the weekends. This summer, the average HBO GO consumption on our active base was nearly one hour of viewing per day, and steadily rising. We know exactly what our consumers want to watch, and we mobilize great energy to provide that content. Those viewers who come to watch the movies often take in a series also, and vice versa. Our most loyal users consistently watch a particular series, but they also view 1-2 additional movies each week. On average, our users watch a series or a movie only once, but they may watch a children's television episode up to 8 – 10 times.

Since the end of 2017, access to HBO GO service does not depend on your cable provider. How did this change affect the number of your subscribers?

Longer preparation preceded the launch of the D2C business model. The most important task was to build a strategy that did not destroy the meticulously developed linear subscriber partnerships of the past 20 years. Studying existing subscriber habits was an integral part of this effort. Because we were launching an online service, plenty of data sources exist to help us. Most importantly, our streaming offer targeted potential consumers outside the group of existing linear subscribers to our TV+HBO GO packages. As a result, our subscriber numbers are rising in both groups. For example, streaming consumers increased steeply starting in November 2017, and it has doubled its base in the last 4 months.

Regarding the technology background, where are the servers storing the movies and television series that can be viewed in Hungary? How big is the team that makes the subtitles? Is the latter created in-house or by outsiders?

The CEE platform, the applications and the database structure serving them are entirely made by Hungarian engineers and developers. We used to store our content on physical servers for a long time. However, with the launch of D2C, this storage moved to the cloud. This has allowed greater flexibility in our operations, such as during the Golden Life premiere or any Monday episode premiere of the last season of Game of Thrones .

Due to the amount of the content, which currently amounts to over 6,500 hours of available viewing, it is almost impossible to translate and/or dub all of our television series and movies in-house. That is why we engage specialized firms to perform these tasks. However, that doesn't mean we're letting go of quality. We ensure that the dubs for our content are excellent and we work with the best professionals to ensure our viewers enjoy the best quality of their favourite television series or movies.