"How Broadband And Cable Consolidation Could Help You Get HBO Go Without A Cable Subscription"
Around this time last year, I wrote a long piece explaining why you can’t purchase a stand-alone subscription to HBO Go. The service, intended as an enhancement of the HBO experience for existing subscribers, was an attempt to enhance the cable model, not to subvert it. HBO’s entire business model is distribution through cable companies, who are in competition with streaming services like Netflix and Amazon Prime. Throwing in with the competition could lead to retaliation. And it’s not clear that there are enough people who would prefer an HBO Go subscription to cable to make it worth blowing up that business model.
But HBO has always been interested in expanding its potential reach. And HBO CEO Richard Plepler is starting to talk about ways HBO could get out of the conundrum of its business model—and one solution he’s proposing could be directly enabled by the consolidation of internet and cable companies into single businesses:
“Right now we have the right model,” Plepler told Reuters on Wednesday evening at the Season 3 premiere of HBO’s hit TV show “Game of Thrones.” “Maybe HBO GO, with our broadband partners, could evolve.”
HBO launched HBO GO in 2010 to let subscribers view its shows over the Internet on devices such as Apple Inc’s iPads. The service has about 6.5 million registered users, compared with about 29 million for HBO’s main service.
However, HBO GO is only accessible for viewers who pay for cable TV service, plus an extra fee for HBO. This means monthly bills of $100 or more typically. HBO GO is available to subscribers of several pay TV companies that provide Internet service such as Time Warner Cable, Comcast and Verizon FiOS
Plepler said late Wednesday that HBO GO could be packaged with a monthly Internet service, in partnership with broadband providers, reducing the cost.
Or, in other words, HBO would still be tied to large cable and broadband providers—it wouldn’t just let you sign up for HBO Go without verifying your subscription to a cable or internet service in the same way you sign up for streaming Netflix. But HBO would be tied to consolidated companies with the diminished expectations that it’s better to get customers to sign up for one service if the choice is between that and not having them sign up for cable and high speed internet with you at all.
I still think that the cable package will continue to have value for a lot of consumers. If a la carte cable pricing tied to internet subscription takes off, per-channel pricing is still going to be quite expensive, and many consumers will end up paying similar amounts to what they spend now for five or ten channels. But for both die-hard cord cutters, and for media companies, this is probably a reasonable detente.