Wednesday, October 15, 2014

HBO GOes Without Cable

HBO just announced that in 2015 it will start to offer the HBO GO digital content, without a cable subscription.  While there are limited details, HBO has clearly been feeling the heat from Netflix, Hulu, Amazon and others.  And while HBO cable subscriptions continues to deliver valuable revenue, the threat of cord cutting can damage their leadership position.

I wouldn't be surprised to learn that HBO offered some deals with their current cable providers to move in this direction.  Such alternatives might have included revenue guarantees against current customers that might drop HBO cable for HBO GO.  I believe that HBO's research would indicate that they won't experience this shift in viewing.  I suspect that current cable/HBO subscribers will maintain their subscriptions and HBO GO being offered directly to consumers will actually result in more additive growth than shifting of platforms. 

There is certainly a risk that this move by HBO to offer HBO GO and the likely repercussions of other premium services like Showtime and Starz developing a similar move, will ultimately lead to greater cord cutting.  It may also lead to cable companies pursuing more a la carte offerings to deliver a lower priced set of networks for consumers still seeking a cable platform.  At the same time, cable companies must also push for a complete TV Everywhere experience that lets every linear and on demand channel to be accessible via authenticated viewership to its customers.  Till then, this move by HBO is a necessary one to stay competitive against its digital rivals.

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