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June 3, 2015
HBO Nordic Storms Back to 14% Penetration
Posted by KMontgomery

HBO Nordic Storms Back to 14% Penetration

HBO Nordic’s launch in Scandinavia was a disaster, leaving the company with just 2% penetration after 12 months. However, with a refit of technology and more customer friendly terms the company has come storming back to capture 14% penetration.

When HBO and Netflix squared off in Denmark, Sweden, Norway and Finland back in October 2012, it’s fair to say HBO made a complete mess of it. The company did just about everything wrong in the first release of HBO Nordic. Customer terms were unfriendly, with no free month’s trial and a 12 month commitment. And those that were brave enough to pay the upfront fees were greeted with poor quality streaming video quality, and a lack of device apps through which to access the service.

Netflix, on the other hand, launched with a free month trial and just one month commitment. The technical implementation was flawless with plenty of clients and great streaming quality.

After twelve months, though both Netflix and HBO Nordic charged the same monthly subscription fee (DKK79, $14), Netflix had 17% household penetration while HBO Nordic had just 2%.

At the FutureTV Conference in Copenhagen, Denmark this week, Wilke presented new data which shows HBO Nordic has executed a stunning turnaround. Though the company still has less than half the subscribers that Netflix has, it has grown penetration strongly, to 14%.

How was it able to achieve this? The easy part was to change those unfriendly customer terms to mirror Netflix. It was much harder to replace the backend infrastructure and the apps running on connected devices. Streaming quality is now great and apps appear on many of devices customers typically own.

We bring all the content in and normalize it. We completely rebuilt the apps, all the way from the sign-up experience to the playback on the devices. You have to have a user experience equal to the content; you have to have both.”One of HBO Nordics’ key partners in the technical overall was Clearleap. At INTX, speaking on my panel Why OTT is their BFF, CEO of Clearleap Braxton Jarratt said that his company engaged with HBO Nordic about a year ago to help it completely overall its infrastructure from top to bottom. According to Mr. Jarratt:

Now HBO Nordic seems to have great content and a great experience to go along with it. Mr. Jarratt says HBO Nordic went from a 1 star rating in the app stores to a 5 star rating after they released the new app versions. He said customer subscriptions went way up and churn went way down.

The Wilke data clearly shows how effective the technological and business overall has been. It also proving the lie to the old adage you never get a second chance to make a first impression. If you have great content, as HBO most assuredly does, a company always has a chance to win customers back.

Why it matters

HBO Nordic’s initial launch in Scandinavia was a disaster with the company executing poorly on the technical infrastructure and customer terms.

Little wonder that after a year it has just 2% penetration, while Netflix (which launched at the same time) had a 17% penetration.

After and technology platform and business terms overall, HBO Nordic now has a 14% market share.

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