Color me not surprised. HBO is finally pulling the trigger to offer its channel as a standalone streaming service. The easiest comparison is to say the company is gearing up for battle with Netflix. That may be their end goal, but for now, HBO seems to be borrowing a revenue model versus competing.
HBO is diving into the realm of streaming because of the slow rise of cable cutters. If a consumer decides to cut TV, an immediate barrier is placed in front of HBO. That’s bad news when you’re talking to investors. HBO CEO Richard Piepler talked about the announcement during an investor meeting with Time Warner.
“That is a large and growing opportunity that should no longer be left untapped,” Plepler said. “It is time to remove all barriers to those who want HBO. So, in 2015, we will launch a stand-alone, over-the-top, HBO service in the United States. We will work with our current partners. And, we will explore models with new partners. All in, there are 80 million homes that do not have HBO and we will use all means at our disposal to go after them.”
Sure, you will get the headlines of HBO encroaching on Netflix’s turf. It wants to remove barriers to entry. They have enough hit shows to get people to sign up. Game of Thrones will be sitting on the network for years to come. Original programming is a mainstay of the network, and Cinemax is coming along nicely with shows such as Strike Back and The Knick.
Distributing the new streaming service can hit every vertical. You would be able to buy the service through your ISP provider, new partners such as Google, Amazon and Microsoft, or the Netflix model.
Using the Netflix model, they could snatch up an ever-growing number of subscribers and cut out the middlemen. It also kills the argument of the barriers of access to shows like Game of Thrones without opting into expensive contracts. Yeah, most cable and satellite providers give you sweetheart deals, only to lock you in on contracts.
The launch of the HBO service will likely be an expansion of the HBO Go app. The app will no longer be tied to a subscription for those that want their TV a la carte.
With HBO jumping into the deep-end, will there be any additional dominos? Will we finally get sporting events separated from the confines of a cable bill? Judging by how much the networks and the leagues make, I wouldn’t hold your breath.