HBO Cutting the Cord?

Posted by Sam Churchill on

HBO could widen access to its HBO GO online streaming service by teaming up with broadband Internet providers for customers who do not subscribe to a cable TV service, according to HBO’s Chief Executive Richard Plepler.

“Right now we have the right model,” Plepler told Reuters on Wednesday evening at the Season 3 premiere of HBO’s hit TV show “Game of Thrones.” “Maybe HBO GO, with our broadband partners, could evolve.”

HBO GO, launched in 2010, let subscribers view its shows on internet connected tablets. The service has about 6.5 million registered users, compared with about 29 million for HBO’s main service. It is available to HBO subscribers of Verizon FIOS, AT&T U-verse, Google TV, Cox, Comcast, Time Warner Cable, DirecTV, Dish Network, and Charter Communications. In June 2012, the Android app became available through the Amazon Appstore, and can be downloaded on the Amazon Kindle Fire.

But HBO GO is only accessible for viewers who pay for HBO and cable TV service. This means typical monthly bills of $100 or more. Now HBO GO may be packaged in partnership with broadband providers, reducing the cost.

Customers could pay $50 a month for their broadband Internet and an extra $10 or $15 for HBO to be packaged in with that service, for a total of $60 or $65 per month, Plepler explained. “We would have to make the math work,” he added.

It May Be a Tease, according to Business Week. Peter Kafka in All Things D writes, “Sure, I guess. But not for a long time, because right now the current system—where HBO (and Showtime) are only available to pay TV customers who also buy a lot of other TV channels—works well for the guys who own the shows, and the guys who own the pipes.”

HBO, owned by Time Warner, relies on large financial support from its cable and satellite TV partners to help distribute and promote its shows. There are billions of dollars generated from HBO’s existing distribution network and to simply circumvent that would not make business sense.

Still, Internet-only rivals such as Netflix and Amazon can disrupt this approach. They deliver original programming directly over the Internet.

Perhaps “wireless cable” will cut out the phone and cable duopolies.

If Google or Apple bought 20-40 MHz from Softbank or Dish, advertising could subsidize broadband service. Conceivably a 5-10 Mbps wireless connection could cost $20/month. Settops from Google, Apple, or Intel could offer a variety of cable-like services.

Tier One might include Youtube entertainment for $9.95/mo, Tier Two might offer Netflix, Amazon and Hulu Plus for $19.95/month, and Tier Three might include everything plus HBO GO.

Just sayin’. Google’s I/O kicks off on May 15. Perhaps with a 2.6 GHz Nexus 7.

Posted by Sam Churchill on Friday, March 22nd, 2013 at 11:45 am .

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