HBO plans streaming service for viewers without cable or satellite
New service will be available to viewers without cable or satellite subscriptions, putting it in competition with Netflix, Amazon and Hulu
PUBLISHED : Thursday, 16 October, 2014, 9:33pm
UPDATED : Friday, 17 October, 2014, 3:14am
Agencies in New York
HBO - whose shows include 'Game of Thrones' - has until now not been available without a cable or satellite subscription. Photo: AP
HBO is planning a stand-alone streaming service direct to internet customers from next year, taking a giant step towards breaking the pay-TV bundle that has been a cornerstone of the industry for more than 25 years.
HBO chief executive Richard Plepler made the announcement at parent company Time Warner's investor day in New York, explaining that the new service would be aimed at consumers without a cable or satellite subscription, who have not been able to watch the premium channel - famous for shows like Game of Thrones and The Wire - until now.
HBO's service is currently available only to subscribers of pay-TV packages. But growing competition and changing consumer viewing behaviour has forced HBO into a rethink.
The company doesn't want to get left behind as audiences migrate to the internet and streaming-only services such as Netflix to consume much of their entertainment.
Plepler said the move would be "transformative for our company" by delivering the HBO service directly to consumers.
"Currently there are 10 million broadband-only homes in the US," Plepler said.
"That number is expected to grow. Of today's 10 million, about half subscribe to a streaming service. These consumers have no access to HBO. That is a large and growing opportunity that should no longer be left untapped."
At present, consumers can access HBO online through a service called HBO Go, but a subscription through cable or satellite is needed.
Plepler offered no details on a specific launch date next year or fees for the new service.
He said "we will work with our current partners and we will explore models with new partners" in an effort to reach the 80 million US homes which do not currently have HBO.
Woody Harrelson and Matthew McConaughey in 'True Detective'.
HBO would offer consumers a streaming video service similar to that of Netflix, Amazon or Hulu, but with a large amount of original content - something the others have only recently begun to produce.
The new service specifically targets "cord cutters" who have been dropping costly cable subscriptions and other consumers who rely on streaming video.
Forrester Research analyst James McQuivey said that for cable and satellite television providers which offer bundles and packages that include HBO, this news means "their worst fears have come true".
"This move by HBO was inevitable from the moment that people started streaming TV shows online," McQuivey said.
"HBO has some of the most prized content on the TV screen and it appeals strongly to the young, affluent, educated demographic that is most likely to cut the cable cord in the next five to 10 years."
Netflix said it expected competition from HBO but that the two services could both thrive.
"Starting back in 2011, we started saying that HBO would be our primary long-term competitor, particularly for content," said a letter to shareholders from Netflix chief executive Reed Hastings and chief finance officer David Wells with its quarterly earnings.
"The competition will drive us both to be better. It was inevitable and sensible that they would eventually offer their service as a standalone application.
"Many people will subscribe to both Netflix and HBO since we have different shows, so we think it is likely we both prosper as consumers move to internet TV."
Nat Schindler at Bank of America/Merrill Lynch agreed, saying the two services were aimed at different audiences.
Agence France-Presse, McClatchy-Tribune
