During a Time Warner Inc. investor meeting on Wednesday, Richard Plepler, chairman and CEO of Home Box Office (HBO), revealed that HBO plans to offer a standalone streaming service in the United States sometime during 2015. This will be unlike HBO Go, which requires the customer to subscribe to HBO via their cable TV service.
During his presentation, Plepler pointed out that there are "significant growth opportunities" within the Pay-TV arena, and that the broadband-only market of ten million subscribers will grow over the next several years as customers begin to cut cable TV. He said this group is an extremely large and growing "opportunity" that shouldn't be untapped.
"So, in 2015, we will launch a stand-alone, over-the-top, HBO service in the United States," Plepler said. "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."
HBO has already taken one small step to meet consumer demand with its HBO Go service. But what will be interesting to see is how consumers react to a full-fledged standalone service costing a possible $20. To compete with Netflix, the company may need to dip down into the sub-$10 price point while possibly adding more content. The thing to keep in mind is that HBO really can't be a Netflix competitor because the former company doesn't offer TV shows and movies from other networks.
Will consumers buy into a standalone HBO streaming service? More importantly, will other Pay TV channels like Showtime and Starz launch a similar service? That will be interesting to see. As it stands now, HBO's pricing model will be key in determining if such an offering will catch on. We're hoping that the HBO service will cost less than Netflix per month.
So what will happen with HBO on cable? There's good reason to believe that Time Warner Inc., HBO's parent company, won't let go of the pay-TV service that easily. Subscribers will undoubtedly still have access, and possibly at a discount if they want access to the standalone service. Then again, customers have access to HBO Go as well, so cable subscribers may not need the standalone service after all.
What do you think about the HBO stand-alone streaming service?
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