HBO has announced today plans to offer a standalone streaming service. HBO could threaten Netflix's dominance.
Today HBO announced plans to launch a stand alone online streaming service in 2015. HBO Chairman and CEO Richard Plepler said: "in 2015, we will launch a stand-alone, over-the-top, HBO service in the United States. We will work with our current partners. And, we will explore models with new partners. All in, there are 80 million homes that do not have HBO and we will use all means at our disposal to go after them."
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How can HBO challenge Netflix? HBO has the rights to movies before Netflix can show them. In addition to that, HBO has a ton of hyper popular original content like Game of Thrones. HBO could launch something that could become a premium Netflix if they are able to price it right.
A monthly Netflix subscription is right now priced at $8.99. The success of the standalone HBO service is dependent on the price. If it is too expensive compared to Netflix it will not fly high. If HBO is going to be agressive on pricing and for instance charge $15 per month than Netflix will have a problem.
The announcement of the stand-alone HBO online service got a lot of attention. It is ranking #1 on reddit right now with over 5,000 up votes. Clearly poeple are excited about this, but only if HBO makes it affordable.
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If you already have Cable, HBO is only in general a $10 per month upgrade. The HBO service needs to be attractive to those who do not subscribe to cable at all.