Making Sense Of HBO Alone
Netflix, there's going to be a new player in your neighborhood.
HBO has announced that next year it is launching a standalone online service, meaning people who don't subscribe to HBO on cable will still be able to watch the entertainment service's top shows - online.
Is this the beginning of the end of cable subscription services like HBO?
"Well, sure, in the long run," said Kelly McBride of the Poynter Institute's Sense-Making Project. "I think HBO is putting its eggs in a slightly different basket and they're doing so because they see the disruption on the horizon and they want to be a part of it. Cable television is not going to disappear next year or even in the next five years. But we've already seen a lot of other products that people turn to cable television exclusively to view become available elsewhere."
About 10 million people have, as they say, 'cut the cord,' and view all of their video entertainment online instead of on cable TV.
But that's not the audience HBO is aiming for with this new service.
"There are 80 million households that don't have HBO because HBO is a premium service. So all of those homes may now look to a la carte services from HBO," McBride explained.
If this is the beginning of the end of cable premium services, does this new HBO standalone internet service signal an end - someday - to cable?
"Sure. eventually cable will be disrupted," said McBride. " But cable companies may just become internet service providers and they'll still make all their money."
One thing HBO may have to do is get their password situation under control. Right now, people can hand out the password to its current online service, HBO Go, to multiple users.
That won't make economic sense for their new standalone internet service.
"That's how most of us get on to HBO Go right now, and for this model to work for them I think they're going to have to cut down on that," McBride said.