3 Things about HBO’s Streaming Service Announcement

by Brett Sappington | Oct. 15, 2014

Let it not be said that HBO restricts drama to its original series. Today’s announcement that HBO will launch an online video streaming service next year has added a new twist to the pay TV versus OTT plotline. While Mr. Plepler’s statement leaves us with as many questions as it provides answers, here are three things that we can take away from this news.

  • This move shouldn’t be a surprise. Few that follow the industry closely will be surprised by HBO’s announcement. HBO has been aggressive in the online space for some time. HBO GO was first launched back in early 2010, an early option for pay-TV subscribers in TV Everywhere. The company launched HBO Nordic at the end of 2012, offering an OTT video service in selected countries in northern Europe. With a decline in consumer uptake in premium TV services, the direct threat that Netflix and other OTT services pose to premium pay-TV spending, and the appetite for HBO content among consumers, a move by HBO to offer its own OTT service has likely been in the company’s strategic thinking for some time.
  • HBO is prepared for the challenges of a direct-to-consumer business. As pay-TV providers and Netflix know, offering a successful consumer-facing service is no small task. Operational details (including billing and customer/technical support), effective marketing and promotion, and product feature set all impact the viability of an OTT service. HBO Nordic has allowed the company to begin its climb up the steep learning curve of direct-to-consumer services.
  • Priorities for HBO and pay TV are not aligned. While HBO values its important relationship with pay-TV providers, the company has likely come to realize that HBO’s best interests are not necessarily being served by its pay-TV provider partners. HBO has long relied on pay-TV providers to market and sell HBO as part of the pay-TV subscription package. By stepping up with its own service, HBO is signaling that it does not necessarily trust pay TV to attract the cord-cutting and shaving crowd apart from HBO’s direct intervention. 


Next: Ready, Set, HBO GO: Premium Network to Offer Standalone OTT Service in 2015
Previous: 4K Pay-TV Service to Be a Key Differentiator for Younger Consumers

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