HBO Announces OTT Service for 2015

TV – The discussion about the future of TV in the US is not only a consequence of weaker TV set sales, but is also based on declining subscriptions to cable services. Discussions about a change in the TV landscape has been ongoing for years now. HBO, the US premium movie channel and content provider, has announced that it is looking at offering an OTT (over the top) version of its HBO GO service. This new service will be available sometime in 2015, but we do not know exactly when, or how much HBO is going to charge for a movie.

So far, HBO GO has required a cable subscription from the user to access the streaming version of HBO. Since the cable providers are also most likely to be the broadband internet providers for such a service, delivery by cable ensures the income stream to HBO.

However, not all broadband internet service comes from cable. Phone companies like ATT and Verizon offer the same service via their home connected networks, here in the US. Keep in mind, the broadcast and internet providing structures are quite different from country to country as are the issues with the TV infrastructure. What is an issue in one country is not necessarily an issue in another country. Nevertheless, the TV infrastructure is under distress around the globe.

What we see developing is a disentanglement of the various functions in the home entertainment industry. The internet is allowing on demand service, which appears to be very interesting for the consumer if increasing TV viewing over handheld devices is any indication. If I am watching TV over the internet in moderate volume, why would I have a cable subscription? From the standpoint of the consumer, I am willing to pay (I guess I am a honest consumer) for the content and delivery which I am using. I am not willing to pay for content and delivery that I am not using. This requires a clear cut switch from a bundled purchase that we have today to an á la carte system in the future.

The announcement from HBO brings the world one step closer to this position. If you are hooked on one of HBO’s shows and have an internet connection, you are good to go. Forget cable. This is another breach in the wall that the broadcast companies are building to conserve their current business model. It is anyone’s guess how long the existing business model will work. In the end it will come down to what is cheaper for the consumer, a cable contract or viewing á la carte. More choice for the consumer is a good thing, right? – Norbert Hildebrand