Time Magazine 2014 Annual Report Download - page 23

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affiliates’ subscribers who subscribe to the HBO and Cinemax services. At December 31, 2014, Home Box Office was the
most widely distributed domestic multi-channel premium pay television service. Subscribers can view HBO and Cinemax
programming on an HBO or Cinemax multiplex television channel and whenever they want through Home Box Office’s on
demand services, HBO On Demand and Cinemax On Demand. HBO and Cinemax subscribers also have unlimited access to
programming through the HBO GO and MAX GO streaming video-on-demand platforms, which enable subscribers to watch
programming whenever they want on a variety of digital platforms, including various mobile devices, gaming consoles and
Internet streaming devices and connected televisions. The programming on HBO GO and MAX GO includes most seasons of
HBO’s and Cinemax’s original series, as well as feature films, HBO mini-series and films, sports programming,
documentaries, comedy and music specials, bonus features and behind-the-scenes extras.
In April 2015, Home Box Office launched HBO NOW, a premium “stand-alone” streaming service, in the U.S. to target
homes that do not subscribe to HBO, including those homes that do not subscribe to a multichannel video service. Customers
can subscribe to HBO NOW for a monthly fee. Subscribers to HBO NOW can view Home Box Office programming,
including HBO’s original series, feature films, HBO mini-series and films, sports programming, documentaries, comedy and
music specials, on a variety of digital platforms, including connected televisions.
International Services
Outside the U.S., Home Box Office generates revenues primarily from providing programming to international affiliates
under agreements that vary from country to country. Home Box Office tailors the distribution of its programming for each
territory using one or more of the following distribution models: (i) unique, country-specific, HBO- and Cinemax-branded
premium pay and basic tier television services distributed in over 60 countries in Latin America, Asia and Europe by
international affiliates to the affiliates’ customers who subscribe to the HBO and Cinemax services, (ii) the distribution of
original programming via licenses to international television networks and SVOD services and through sales of DVDs,
Blu-ray Discs and EST, and (iii) direct-to-consumer streaming services (available in the Nordic region as of December 31,
2014). HBO premium pay television subscribers in several countries also have unlimited access to programming through
HBO GO, and Home Box Office plans to make HBO GO available to HBO premium pay television subscribers in additional
countries and territories in 2015. Effective January 2015, Home Box Office transferred the operation and certain contracts of
an HBO-branded basic tier television service in India to Turner. The service, which had approximately 15.8 million
subscribers at December 31, 2014, will continue to use the HBO brand under Turner’s operation. As a result, for periods after
December 31, 2014, the subscribers of this service are no longer included as Home Box Office subscribers.
Home Entertainment and Content Licensing
Home Box Office also generates revenues from the exploitation of its original programming through multiple other
distribution outlets. Home Box Office’s original programming is sold via DVDs, Blu-ray Discs and EST in the U.S. and
various international regions through a wide variety of digital storefronts. Significant home entertainment releases in 2014
included Game of Thrones: The Complete Third Season,True Detective: The Complete First Season and True Blood: The
Complete Sixth Season, The Complete Seventh Season and The Complete Series. In 2014, Home Box Office licensed for the
first time some of its programming to the Amazon Prime SVOD service. Home Box Office also licenses programs to
television networks and SVOD services in over 150 countries, including arrangements under which it licenses programming
to television networks that are branded as the “Home of HBO” in countries such as the U.K., Australia, France, Germany and
Israel and as “HBO Canada” in Canada. In January 2015, Home Box Office also began licensing some of its current original
series and library content to an SVOD service in China.
Warner Bros.
Warner Bros. Entertainment Inc. (“Warner Bros.”) is the largest television and film studio in the world based on total
studio revenues as of December 31, 2014. Its businesses consist principally of the production, distribution and licensing of
television programming and feature films and the distribution of digital and physical home entertainment products, as well as
the production and distribution of videogames and consumer product and brand licensing.
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