HBO is set to launch a standalone streaming service in April just before the new season of Game of Thrones goes on air. For $15 per month, subscribers to the new service, HBO Now, will gain access to all the content that was previously only available as part of a TV package with providers like Verizon or Comcast.
An estimated 10 million U.S. broadband users do not pay a television subscription and HBO's parent company, Time Warner Inc., is looking to tap into this potentially lucrative market. The move will put HBO in direct competition with Netflix which is currently available for between $8 and $12 per month.
HBO is in talks to make Apple TV a launching partner for the new service according to International Business Times. But to maximize reach Time Warner is also likely to want to make HBO Now available through platforms like Roku, Xbox, PlayStation and Google Chrome.
The expected $15 monthly fee makes HBO Now significantly more expensive than Netflix, but Time Warner is gambling that people will pay extra for its original content and access to a back catalogue of movies and hit shows like The Sopranos and The Wire.
"It's a premium product and it will be priced accordingly," HBO CEO Richard Plepler said during a Time Warner earnings call in February.
HBO's back catalogue is impressive, but there's an argument that competitors are producing equally good original content such as Neflix's House of Cards and Amazon's Emmy-winning Transparent. Although, for now, the $15 fee shouldn't be an impediment as it's roughly what millions are already paying as part of their cable package and it's cheaper than signing up for an entire bundle.
Although there is no confirmed release date, HBO Now is expected to be available by April 12 when Game of Thrones is due to debut. The technology for the service is being designed by Major League Baseball Advanced Media, which is building the back-end along with a new front-end separate from HBO Go, the online service currently available to HBO cable subscribers.
This news comes a day after NBC also said it plans to launch a comedy-focused streaming web service later this year.
HBO creates some of the most sought-after content on TV and this standalone service could represent the beginning of the end for TV cable bundles. In the past consumers have been happy to pay for bundles to get their favorite shows, even though they never watch most of the channels in the package. But now, with shows available via streaming services like Netflix and Hulu, millions don't pay for TV at all. It seems the number of people not subscribing to TV has now reached critical mass, or at least a large enough percentage of the market that Time Warner is willing to operate outside the cable bundles.
Photo: HBO
