Editorial: HBO now poised to blaze a trail online, but will others follow?
HBO is making moves to break the pay-TV bundle by launching a stand-alone streaming service in 2015.
In the mid-1990s, HBO made a strategic decision to invest more in original programming and make it the network’s selling point, as opposed to the second-run movies that dominated its lineup in the early years. That programming — from “The Sopranos” and “Six Feet Under” to “True Detective” and “Game of Thrones” — not only won HBO millions of new subscribers, but blazed a trail for the likes of FX (“The Shield”) and AMC (“Mad Men”) to follow, ushering in a new golden age of television.
Now, HBO says it’s planning to take another portentous step. Chief Executive Richard Plepler told investors Wednesday that within a year, the network plans to start selling an online version of HBO to people regardless of whether they subscribe to cable, satellite or other pay-TV service. Although it hasn’t revealed the
details, the move is good news for consumers eager to stop paying for dozens of channels they don’t want in order to get the ones they do.
Cable networks such as HBO have been reluctant to offer their programming online, arguing that the audience is minuscule compared with the vast numbers who subscribe to pay TV. Executives also worried that making the networks available online would encourage more “cord-cutters” — consumers who dropped their pay-TV service in favor of such online services as Netflix and Hulu Plus — hurting the cable and satellite providers that have been the source of so much of the network’s revenue.
But when confronted with the sweeping technological shifts the Internet is causing, companies eventually stop worrying about cannibalizing today’s sales and start trying to adapt to tomorrow’s market. For the major record companies, that happened in the mid- to late-2000s, when they finally embraced 99-cent MP3s and streaming services instead of trying to protect their slumping CD sales. HBO’s announcement may be a sign that a similar moment has arrived in TV. Rather than locking its latest programs behind online gates that only pay-TV subscribers can open, as most cable networks (and a number of over-the-air broadcasters) do, HBO plans to sell a streaming service to people who don’t want pay TV. That potential audience, Plepler said, could be 80 million homes.
It remains to be seen whether HBO pursues cord-cutters seriously by offering its latest programming for a reasonable fee. And even if it does, there’s no guarantee that other major cable networks will follow. Nevertheless, with a growing number of viewers either eschewing pay TV or signing up for fewer programming tiers, the pressure is building on networks and pay-TV operators alike to let consumers sign up just for the content they want, delivered through the medium they most want to use.
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