After talking about its product for nearly six months, HBO finally announced details of its streaming video service, said the International Business Times last week. The much-awaited service will be called HBO Now and will cost subscribers $15 a month. HBO plans to launch the standalone service in April to coincide with the fifth season premiere of “Game of Thrones.”
HBO is also talking to potential partners (e.g., Apple, Roku, Amazon) to help distribute the product. Once launched, TV viewers can subscribe to HBO Now directly from HBO without having to go through their cable or satellite TV providers. This will be the first time in HBO’s 42 years that HBO has been offered outside of a cable package.
As we reported last October, HBO joins other over-the-top (OTT) television providers like CBS and Sling TV, battling cable and satellite TV providers for television viewing dollars. With OTT services, so-called cord cutters can now ditch their cable boxes to get the programs they want to see without paying for pricey, bundled packages.
Insider Take:
HBO is not the first to enter the OTT market, and it has some worthy competitors including Sling TV which launched in February. This weekend Ubergizmo reported that Sling TV enrolled 100,000 paying subscribers in its first month. At a minimum cost of $20 a month (add-ons are available), this is a cool $2 million in additional revenue for the Dish Network.
So how will HBO Now fare? According to Re/code, research firm Parks Associates says HBO Now could garner interest from a pool of 10 to 12 million consumers who currently have broadband but not TV. While we don’t necessarily agree with this logic, we anticipate that HBO Now will be popular among younger viewers and cord cutters who are interested in controlling both their viewing options and budgets. If HBO Now has the success that Sling TV is having, it could boost revenue by $1.5 million by May.
A few notes of caution: HBO offers a service called HBO Go for subscribers who want to view HBO programs on their mobile devices. HBO needs to be clear which service does what. Also, with a launch less than a month away, HBO needs to kick off its marketing campaign immediately.
To date, details of the launch have been reported by a handful of news outlets, but not much has come directly from HBO. Why are they being so quiet? This lack of communication makes us question whether or not the April launch is feasible. Perhaps they still need to work out a few kinks before they are ready to shout HBO Now’s praises to the world.
UPDATE, March 10, 2015:
Since we first posted this story, HBO announced that HBO Now would launch first on Apple devices. iPad, iPhone and iPod Touch users would be the first to access HBO Now. HBO Now will be offered for $14.99 following a 30-day free trial.
