The announcement on HBO's upcoming online-only streaming service came on Wednesday when company chairman and CEO Richard Plepler was addressing an investor meeting for Time Warner, HBO's parent company. After presenting the company's domestic returns, Plepler noted that there are now 10 million broadband-only homes and added that such number will most likely increase in the years ahead.
HBO's announcement gave television fans one more reason to bid their expensive cable subscription goodbye. Recently, more and more viewers are making the big switch from subscribing to an expensive cable service to accessing media using various online channels such as Hulu, Netflix and YouTube.
"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," says Plepler.
Up until this time, there are still a number of households that have chosen to hold on to their cable subscription since it is the only way for them to view some of their favorite programs. These would include live sports programs on ESPN and highly popular shows on HBO such as "Game of Thrones."
HBO may just find a way to change all that.
"This is an enormous breakthrough; consumers will be able to get to pick what they want and they will finally have content companies selling directly to them," says Gene Kimmelman, president of Public Knowledge, a public interest group. "The question is, 'Who is next?' That's trickier because this speaks to the power of HBO's brand to be able to break from the cable bundle."
HBO's streaming service will have three potential distribution models. The first model will involve selling the online-only service through the company's existing cable providers. The second model is focused on distributing the service through new partners such as Microsoft, Google or Amazon. Lastly, the third model would be in parallel with the Netflix model wherein HBO would provide the streaming service directly to consumers without having the need for a middle party.
HBO seeks to expand beyond the number of its existing customers in the U.S. which has now reached 31 million. At present, it offers an on-demand service for pay TV customers known as HBO Go. It has also granted license to a large portion of its library to Amazon Prime.
