Last month, HBO announced that in 2015 it will offer an unbundled tier, allowing customers to view HBO content without a subscription from cable TV companies. Basically, HBO plans to compete with Netflix, Hulu, Amazon Instant Video, and many other similar internet streaming services. This raises a few questions.
Will HBO offer all of its shows as part of this package? Currently, HBO subscribers have access to HGO Go, which allows them to stream almost the entire HBO catalogue. In addition, HBO allows subscribers to stream its latest episodes at the same time they are premiered on television. Will this new option only let customers access the back-catalogue of older HBO TV shows and movies? If so, that will reduce excitement for this news considerably.
It's also worth exploring why HBO finally decided to unbundle now. Currently, if you want to subscribe to HBO, you have to do so through your cable TV provider. So you end up paying the provider, who then pays HBO. With an unbundled tier, you will pay HBO directly, eliminating the cable providers from the equation. HBO must know there is pent-up demand for their content from cable cutters, but they don't know if it will provide them with enough revenues to totally cut them off from cable providers. That's why they haven't said what the unbundled tier will include - it's a decision they haven't made yet. The question HBO needs to answer is will they make more money by going directly to consumers, or through cable companies as they do now?
I wonder what HBO will charge for this unbundled tier. If it was my decision, I would price it in the $30-40 range, because cable TV cutters are desperate for the service, and would have no issues paying that much for their favorite channel. In addition, the quality of HBO shows is in a class of its own. Their closest competitor is Netflix, which charges $8.99 per month. But the common complaint with Netflix is the quality of its content. I have only found old TV shows and movies on it. Once in a while I will find some fairly new movie or show, but that is far from the norm. HBO, on the other hand, has the best TV shows in the business, and should charge accordingly.