HBO subscriber losses pressure cable, satellite affiliates

HBO lost 17,000 subscribers during the second quarter, demonstrating the challenges cable and satellite distributors face in retaining premium customers.

Time Warner's (NYSE: TWX) flagship cable channel has attempted to boost subscriber retention efforts by allowing viewers to access its library of hit original series and movies online and through mobile devices with its HBO Go product. But the network, which ended the quarter with 28.3 million subs according to SNL Kagan data, was hit by subscriber losses at the major cable and DBS distributors.

HBO gained 70,000 subscribers during the first quarter. It appeared poised for growth during the second quarter with the debut of its drama Game of Thrones and increased marketing for HBO Go. Rival Showtime gained 355,000 subscribers during the second quarter, while Starz picked up 200,000 subscribers.

HBO is the most expensive premium network, with most distributors charging $15 to $20 monthly for the channel, which launched in 1972. While HBO remains the most popular premium network, it may face pressure to reduce its monthly subscription fees in order to retain customers.

The subscriber losses will also fuel proponents of cable cord cutting, which may argue that pay TV distributors can't expect consumers to pay more than $15 monthly for a single network, while online video providers such as Netflix (Nasdaq: NFLX) offer unlimited streaming of movies and TV series for as low as $7.99 monthly.

Hit HBO series Entourage kicked off its final season last month, and the network also debuted a new season of the comedy Curb Your Enthusiasm. If HBO can't stem subscriber losses during the third quarter, with new episodes of its top original series premiering each week, the network and its affiliates will face more pressure to curb subscription prices.

For more:
- Variety has this story

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