HBO's foray into the online-only television market may come with a
heftier price tag than offerings from streaming competitors like
Netflix.
Following up on CEO and Chairman Richard Plepler's comment on Wednesday that he plans for a "standalone, over-the-top" offering, which would let customers pay a monthly fee to access HBO programming exclusively over the Internet for the first time, The Information is out with a report that the monthly fee may start at $15.
At $15 a month, the price is similar to how much HBO costs to have the service bundled with your cable or satellite package. The high price is a sign that the premium cable channel wants to approach the service cautiously, and wants to limit the number of subscribers it loses under the traditional bundled cable model. The Web-only service, details of which are still sparse, is slated to launch in the US some time in 2015 with the potential for an international expansion.
As of now, there is no way for US consumers to access new HBO shows online without a cable package. Only HBO Nordic -- available in Sweden, Finland, Denmark and Norway -- currently allows customers to access HBO content without a bundle.
At $15 a month, which is $6 more than Netflix's most popular subscription tier, HBO would also be positioning itself as a premium service while attempting to navigate the more murky waters of online-subscription services.
It's unclear if customers, accustomed to lower monthly prices for not only Netflix, but services like Hulu Plus as well, would be willing to pay such a high price to access television shows like "Game of Thrones" and "True Detective" on-demand and over the Internet. Netflix, with its original shows "House of Cards" and "Orange is the New Black," among others, has shown that it too can compete at producing its own Emmy-worthy programming, while slews of other companies have begun entering the digital TV space, including AOL and Amazon.
HBO has signaled in the past that it's willing to break free from its tight relationship with cable and satellite providers. Amazon announced in May that it had brokered a deal with HBO to bring older shows like "The Sopranos" and "The Wire" to its online streaming service for Prime members, the first such time HBO content has migrated outside the cable garden. However, the introduction of an online-only service that any customer could access for a flat monthly fee would be a landmark shift for the business that has long relied on exclusivity and the cable providers' fierce defense of program bundling.
The warming up to an online-only future for HBO comes at a time when providers and creators of TV programming have begun to more aggressively address the rise of cord-cutting. Time Warner Chief Executive Jeff Bewkes has in the past said that HBO's more lucrative untapped market lies in the 70 million pay-TV subscribers that do not pay for HBO and not the smaller yet growing base that have left behind cable altogether -- a number that is estimated to be around 10 million. That appears to be changing.
"This is a large and growing opportunity that should no longer be left untapped," Plepler said on Wednesday.
Still, HBO isn't the only one expanding its online presence. Numerous companies, including Verizon, Dish and Sony, have announced plans to bring content to online-only services beginning as soon as this year and have signed up programming providers like Viacom and Disney to access their library of available shows. Sports giant ESPN, which offers one of the remaining few incentives for customers to cling to cable packages, has begun to loosen its stance too. Last week, the company signed a nine-year licensing deal with the NBA to launch a dedicated streaming service for live basketball.
And on Thursday, CBS entered the game with its more fully formed online-only service, called CBS All Access. (CNET is owned by CBS Interactive, a unit of CBS.) For $6 a month, customers untethered to any cable package will be able to access episodes of current seasons for 15 prime-time shows; all past seasons of eight current shows like "Survivor"; live-streaming broadcasts from 14 cities across the country; and more than 5,000 episodes of past shows like "Twin Peaks" and "Star Trek." The service is available now for certain CBS platforms like CBS.com and its standalone app.
Those clamoring for unlimited access to HBO's storied backlog, however, will have to wait until 2015 to see how the company officially prices its offering and what, if any, caveats will be involved.
Following up on CEO and Chairman Richard Plepler's comment on Wednesday that he plans for a "standalone, over-the-top" offering, which would let customers pay a monthly fee to access HBO programming exclusively over the Internet for the first time, The Information is out with a report that the monthly fee may start at $15.
At $15 a month, the price is similar to how much HBO costs to have the service bundled with your cable or satellite package. The high price is a sign that the premium cable channel wants to approach the service cautiously, and wants to limit the number of subscribers it loses under the traditional bundled cable model. The Web-only service, details of which are still sparse, is slated to launch in the US some time in 2015 with the potential for an international expansion.
As of now, there is no way for US consumers to access new HBO shows online without a cable package. Only HBO Nordic -- available in Sweden, Finland, Denmark and Norway -- currently allows customers to access HBO content without a bundle.
At $15 a month, which is $6 more than Netflix's most popular subscription tier, HBO would also be positioning itself as a premium service while attempting to navigate the more murky waters of online-subscription services.
It's unclear if customers, accustomed to lower monthly prices for not only Netflix, but services like Hulu Plus as well, would be willing to pay such a high price to access television shows like "Game of Thrones" and "True Detective" on-demand and over the Internet. Netflix, with its original shows "House of Cards" and "Orange is the New Black," among others, has shown that it too can compete at producing its own Emmy-worthy programming, while slews of other companies have begun entering the digital TV space, including AOL and Amazon.
HBO has signaled in the past that it's willing to break free from its tight relationship with cable and satellite providers. Amazon announced in May that it had brokered a deal with HBO to bring older shows like "The Sopranos" and "The Wire" to its online streaming service for Prime members, the first such time HBO content has migrated outside the cable garden. However, the introduction of an online-only service that any customer could access for a flat monthly fee would be a landmark shift for the business that has long relied on exclusivity and the cable providers' fierce defense of program bundling.
The warming up to an online-only future for HBO comes at a time when providers and creators of TV programming have begun to more aggressively address the rise of cord-cutting. Time Warner Chief Executive Jeff Bewkes has in the past said that HBO's more lucrative untapped market lies in the 70 million pay-TV subscribers that do not pay for HBO and not the smaller yet growing base that have left behind cable altogether -- a number that is estimated to be around 10 million. That appears to be changing.
"This is a large and growing opportunity that should no longer be left untapped," Plepler said on Wednesday.
Still, HBO isn't the only one expanding its online presence. Numerous companies, including Verizon, Dish and Sony, have announced plans to bring content to online-only services beginning as soon as this year and have signed up programming providers like Viacom and Disney to access their library of available shows. Sports giant ESPN, which offers one of the remaining few incentives for customers to cling to cable packages, has begun to loosen its stance too. Last week, the company signed a nine-year licensing deal with the NBA to launch a dedicated streaming service for live basketball.
And on Thursday, CBS entered the game with its more fully formed online-only service, called CBS All Access. (CNET is owned by CBS Interactive, a unit of CBS.) For $6 a month, customers untethered to any cable package will be able to access episodes of current seasons for 15 prime-time shows; all past seasons of eight current shows like "Survivor"; live-streaming broadcasts from 14 cities across the country; and more than 5,000 episodes of past shows like "Twin Peaks" and "Star Trek." The service is available now for certain CBS platforms like CBS.com and its standalone app.
Those clamoring for unlimited access to HBO's storied backlog, however, will have to wait until 2015 to see how the company officially prices its offering and what, if any, caveats will be involved.
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