HBO, Showtime Getting Closer to Offering Standalone Apps

/ Sep 11, 2014


Netflix’s chief content officer Ted Sarandos once stated that the goal for Netflix is “to become HBO faster than HBO can become us.” The only way this is likely to happen is if HBO decides to untether its HBO Go service from its cable package and offer it directly to consumers.

Right now, that’s highly unlikely. Financially speaking, it simply doesn’t make sense for HBO to. The premium network receives free marketing and other services from its pay-TV partners in exchange for splitting revenues generated by monthly subscriptions — and that’s not even factoring that in order for customers to have the ability to subscribe to HBO, they have to first pay for a whole host of other channels.

That said, tides are clearly moving in one direction. As consumers flock to digital platforms and gain more control over what they watch and what they pay for, premium cable networks like HBO and Showtime have to consider the possibility of one day going direct to consumer with their digital video services.

Which is why comments made this week by Jeff Bewkes, CEO of HBO parent Time Warner, and Les Moonves, CEO of Showtime parent CBS Corp., shouldn’t come as much of a surprise.

“The broadband-only opportunity up until now wasn’t…at the point where it would be smart to move the focus from one to another” Bewkes said at Goldman Sachs’ annual Communacopia conference in New York, according to Cnet. “Now the broadband opportunity is quite a bit bigger.”

HBO has already begun going direct in Nordic countries, paving the way to do so elsewhere. On the other hand, Showtime hasn’t made any concrete moves towards following a direct-to-consumer model.

When prompted with the same direct-to-consumer question, Moonves said: “Is there some time in the future when that could happen? Absolutely. I don’t know when that is.” He later added that over the next three-to-five years, the “business will change dramatically.”

Needless to say, this could prove to be contentious with current pay-TV providers. But when models shift enough that it’s a viable alternative to the current way of doing things, it won’t matter. After all, Viacom just gave Sony the rights to carry 22 of its channels on a internet-only TV service.

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