What HBO’s New Standalone Service Means

There will be a lot written in the next couple of days regarding HBO’s announcement that they will be launching a standalone streaming service in 2015. Here are some brief thoughts on this:

  1. It won’t be HBO Go. There’s too much value included in that package, and I believe HBO will want to play nice with the cable providers and not get kicked out of current arrangements by tempting those currently with HBO subscriptions, albeit via 3rd parties, to switch. Instead, I would bet that it will be limited to what’s currently available on-demand via a cable subscription (current season and maybe previous season for shows, limited to seasonal windows) and a live-stream. And most likely not the full spectrum of HBO networks that a cable subscription provides, but just HBO live-stream.
  2. It won’t be Netflix priced. This is HBO we are talking about, the network that charges $3.99 an episode on iTunes versus the regular $2.99. A premium brand, if not the premium brand, in US TV. You won’t be getting that for $8 a month. They have shareholders to answer to! I think a price point of $14 is much more likely.
  3. Cord Cutters won’t flock to it. Although ostensibly the target market for this new offering, I have doubts that many of this group will pick up HBO Lite for $14 or so when they could keep using their pal’s password to HBO Go, unless…
  4. HBO Go is going to see password restrictions. HBO Go is notoriously lax for being easy on password sharing. Recently, I even heard a co-worker saying that they share out “our friend’s dad’s password, but we tell people don’t look at any adult stuff because it belongs to an old man.” HBO wouldn’t go to the trouble of launching a new product, one would surmise, unless they were serious about cutting off the free access/piracy of HBO Go. Once again, go back to the shareholders. They are most likely tired of being such generous individuals, and want their money. If you consider what is happening at the larger Time Warner organization as a whole, with buyouts and layoffs offered at Warner Bros and Turner, and Time being spun-off, profit maximization is the new mantra.
  5. It will begin the unbundling of the cable deal, but also show the true value of these networks. Those who believe they can cherry pick networks like FX, AMC, USA or Comedy Central for $1 each are in for a rude awakening. These networks will all look at what Netflix charges for a library of 1 or 2 new shows a month plus re-runs and think that, at the very minimum, they are worth the same. At the same time, this will also show the value of owning your content, and may ultimately lead to more production studios launching their own streaming services like Sony has with Crackle. Much like HBO led the TV Everywhere charge with HBO Go, they will once again change the landscape with this announcement.