Why the end of 'Game of Thrones' doesn't spell doom for HBO

A widely cited survey indicated that 20% of HBO Now subscribers said they would cancel if a “specific program” ended, which could seem like terrible news for the network after the finale of “Game of Thrones.”

But industry analysts say consumer surveys often overstate the level of cancellations that will happen around a specific event, like a price hike or show ending.

“While Game of Thrones may be a driver for subscriptions, HBO does not suffer immediate losses to subscription revenues after a season finishes,” Ampere Analysis said.

To succeed after “Game of Thrones,” HBO will have to continue to produce quality programming at scale, but the network faced similar challenges before when other hits ended, particularly “The Sopranos.”

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HBO is facing a subscriber drop of catastrophic proportions — at least, that's what you'd think if you took consumer surveys at face value.

Ahead of the series finale of “Game of Thrones,” market research firm Mintel published a survey in which 20% of 210 respondents who said they subscribed to HBO Now, the company's over-the-top offering, said they would cancel if a “specific program” ended.

The survey was widely cited by outlets like Marketwatch, NBC News, Techcrunch, Fox Business, and Forbes, as well as Business Insider Intelligence. The coverage suggested the survey was terrible news for HBO, and it would be if 20% of subscribers actually canceled.

Mintel did not specifically ask about “Game of Thrones” or estimate exactly how many subscribers would cancel HBO as a result of the show ending.

“I'm hesitant to put a direct number on subscriptions or cancellations,” Mintel analyst Buddy Lo told TechCrunch when explaining the survey's findings. “We know from the research that nearly 20% of HBO Now consumers say they would cancel service over a specific program, but we didn't definitively ask if it was specifically 'Game of Thrones' that they will cancel over.”

But the main issue with drawing conclusions from the survey was that subscribers often say they will cancel a service when they actually won't.

Netflix and the hatred of price hikes

The phenomenon is especially clear around price increases.

Here's a quick case study:

In 2016, when Netflix raised its prices, 41% of survey respondents told UBS that they would accept no price increase. But UBS estimated that only 3% to 4% of those affected would actually cancel. Though Netflix's growth that quarter disappointed Wall Street, the service still grew in the US, and certainly didn't see the mass exodus one might have predicted from the survey.

“If you believed survey data as an example, pay TV would have been dramatically smaller than it actually is,” Pivotal analyst Jeff Wlodarczak told Business Insider this week, speaking of Netflix's price hikes and the lack of corresponding cancellations. “When push comes to shove, people dislike price hikes, but they generally put up with it even with an increasingly subpar expensive product such as pay TV.”

Old challenges, new challenges

So how will the end of “Game of Thrones” impact HBO？

Toby Holleran, a senior analyst at Ampere Analysis, said HBO hasn't suffer immediate losses to subscription revenues after previous “Thrones” seasons ended, in part because a lot of subscribers see HBO as a necessary part of their TV offering.

HBO has about 140 million total subscribers and 50 million in the US, including more than 7 million for its over-the-top offering, HBO Now.

The consensus among industry analysts and insiders I've spoken with is that to succeed after “Game of Thrones” ends and compete with services like Netflix and Hulu, HBO will have to deliver fresh, original content to drive new subscribers and audience interest, and continue to provide a wide back catalog to keep subscribers engaged. That is especially true with subscribers of HBO Now, the over-the-top offering, which is easy to cancel and re-subscribe to.

“While 'Game of Thrones' may serve as a great ambassador for the HBO brand, there is still lots of other highly acclaimed HBO content, ranging from dramas such as 'Westworld' and 'Chernobyl' to comedies like 'Barry' and 'Silicon Valley,'” Holleran told Business Insider. “Ampere data suggests HBO's domestic on-demand offering has more than 2,500 hours of content, of which more than half is HBO original content.”

HBO is actively trying to ramp up its production of original programming. This year, the network increased its production of original programming from 100 hours to 150 hours.

That doesn't mean HBO doesn't face challenges, particularly the exit earlier this year of CEO Richard Plepler and the end of “Game of Thrones.”

But HBO has faced this type of challenge before. In 2007, when its CEO Chris Albrecht was suddenly ousted, the same existential questions about HBO's future were raised.

“The upheaval comes at a time when HBO is uncharacteristically vulnerable, with no blockbuster to replace 'The Sopranos,' now in its last season,” The Los Angeles Times wrote at the time. Sound familiar？

Still, there is evidence that “Game of Thrones” has driven sign-ups for HBO. Trim, a startup that helps users manage finances and cancel unwanted subscriptions, told Business Insider that in April it had seen 156% more new subscriptions for HBO Now, the over-the-top service, among its users than it did in March.

Now it will be up to HBO to convince those new subscribers to stick around.