Friday, October 17, 2014

HBO will offer a stand-alone streaming service

english: This is the american HBO brand logo. ...
english: This is the american HBO brand logo. ® 2008 Home Box Office, Inc. All Rights Reserved. portugu√™s: Este √© o logotipo da marca estadunidense HBO. ® 2008 Home Box Office, Inc. Todos os Direitos Rervados. (Photo credit: Wikipedia)
HBO will offer a stand-alone streaming service to customers in the U.S. next year, removing a big brick from the shaky foundations of the cable-TV industry. ”It’s time to remove all barriers to those who want HBO,” said HBO Chief Executive Richard Plepler at Time Warner’s (TWX) investor meeting on Wednesday, Oct. 15.
Specifics are practically nonexistent. Plepler didn’t say how much such a service would cost, whether it would include a full slate of content, or even how people would buy it. A spokesman for HBO declined to give any additional details. But his remarks should be enough to strike fear into the likes of Comcast (CMCSA) and Cablevision (CVC), whose business models are based on maintaining barriers to highly coveted cable programming.
The biggest open questions are about how HBO pursues a more direct relationship with customers than it has had in the past. The cable network has hinted it would work with broadband providers to make it possible for subscribers to pay an additional fee to get the streaming service, even if they don’t pay for cable TV. Internet-service providers (which are often the same as cable-TV providers) want to stay in the loop, and maintaining good relations with them is still important for HBO. Selling a new streaming product this way would probably help appease them. And it would also save HBO from having to build its own infrastructure for billing and customers relations—although everyone is still going to blame HBO when the service goes down during Game of Thrones.
But HBO could decide it wants to deal directly with customers. Simply opening up its HBO Go website to anyone with a credit card would be the most straightforward thing to do from the customer’s perspective. It would also benefit HBO, which right now gets some information about what’s being watched but has no access to the valuable demographic data that drive decisions at Netflix (NFLX) and other players in the streaming-video industry.
While this seems like a pure win for people who want to live without cable, there are clear limitations for cord-cutters. So far HBO has taken a liberal approach to people sharing accounts on its streaming website, which is supposed to be available only to HBO’s cable subscribers. Once it starts offering a paid streaming service, however, the company could decide that the free ride for password sharers is over. There are simple steps HBO could quickly take to make the practice much more difficult, such as banning simultaneous users on a single account and tracking log-in locations to identify suspicious activity.
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