HBO Now will be one of the most anticipated web services, and HBO is in talks with Apple to make Apple TV one of its launch partners.
Since the past two decades, HBO has been making quality TV series. Currently, the viewers are enjoying HBO shows like Game of Thrones and True Detective. They manage to sign great actors, which make their TV shows a big hit. Boardwalk Empire is another example of HBO great shows. Now HBO is in talks to make Apple TV as one of the launch partners for their new streaming service called HBO Now.
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The streaming service will debut in the next month. Both HBO and Major League Baseball Advanced Media are working to make HBO Now a standalone service. They want the service to be up and running as HBO is also going to be premiering the fifth season of Game of Thrones. HBO will make things easier for the consumers as we will be able to subscribe for HBO Now directly through HBO. We wouldn’t need to go to the cable, satellite or any TV distributor to get the service.
When you will purchase the service from HBO, the expected retail price for HBO Now is around $15 per month, according to IBT. The price is somewhat near to what you pay HBO when you order through your cable or Telco provider. Time Warner would want a new line of distributors which might include Apple TV, Amazon, Xbox, PlayStation or Roku. They will help them market HBO Now and the service will reach an estimated 10 million United States broadband subscribers.
These 10 million broadband subscribers aren’t paying for TV bundles at this current moment. CEO Jeff Bewkes believes that as much as 70 million cable TV subscribers will be able to get the service. He believes that they might subscribe to the service when given the option to subscribe through their internet. So consequently HBO Now service will be reaching millions of subscribers.
HBO’s service will cause problems to the cable bundle. Normally in cable bundles, users are required to buy channels they aren’t even going to watch. According to some studies, the consumers say that they will stop buying those cable bundles and will opt for services like HBO Now. Because in this scenario they are going to pay for the content they will actually watch.
Cox Communications and Cablevision have shown interest and are willing to bundle HBO Now with broadband for their own subscribers. Whereas Apple has been working hard on getting on HBO’s good side. They want HBO Now on their Apple TV. Apple has been working on their streaming service for quite some time, but they were never a hit among the subscribers.
Now, they are trying once again to come through the cracks and become a major TV service provider. This is why they are courting HBO in a bid to add their service to Apple TV. HBO could be willing to give them the HBO Now service as Apple TV is already carrying their HBO Go for their current HBO subscribers. Adding another HBO service would get Apple TV more subscribers. So adding this service would help Apple TV as they have spent past years in negotiating for the rights to offer their own TV packages.
HBO has still not decided on a launch date for their HBO Now service but it is expected to be in April when the new season of Game of Thrones returns. If this is the case, then it will be very hard for Major League Baseball Advanced Media which will have to make a new front end for the users which is separate from HBO Go and they will also need to do some work on their back end. The HBO Go service was launched last year with the premiere of Game of Thrones’ 4th season.
The HBO Go service wasn’t an immediate hit as many consumers complained that it had tech glitches. So this time around, HBO will make sure that it will come with a solid application without any tech glitches. The launch of the new HBO Now service will be another milestone for HBO’s corporate parent Time Warner’s premium TV channel. Previously the channel was distributed as an add-on to a package of cable channels.
HBO Now will help HBO in signing a new group of distribution partners. Those distributors pay a wholesale price for HBO and then they go on and sell the service to their consumers which ranges from $13 to $18. A study was held which showed that the consumers are less likely to drop the service or switch partners. If the service is going to be for $15 a month, then some consumers will look at it as somewhat expensive.
This HBO Now service will be significantly expensive when compared with Netflix. Netflix charges its subscribers which ranges from $8 to $12 a month. The price varies for different levels of service. But even their highest price is $3 less than the expected $15 a month service. HBO was quick to say that they have a more current film library when compared with Netflix and they also have original programming.
HBO’s CEO Richard Plepler said that the HBO Now service is a premium product and that it will be priced accordingly. He said this when was at a Time Warner earnings call in February. HBO always talked about bypassing traditional cable TV and now they have a great chance of doing that with their new HBO Now service. There are some people who don’t want the HBO Now service to be launched.
Most of them are the current distributors which include Comcast and Time Warner Cable. These two companies are in the midst of a $46 billion merger. HBO heard misgivings from companies when HBO added satellite TV providers as distributors. Some believe that their strategy is to give early partners a pricing advantage over newer ones. Some analysts are still thinking about how Apple will take all of this because traditionally, they used to squeeze advantageous deals out of the media.
We even remember Apple came up with the 99-cent single more than a decade ago. Bewkes said last December that he saw cord-cutting accelerate as a lot of TV providers started to drop subscribers. According Leichtman Research Group, US pay TV providers lost as many as 125,000 subscribers in the last year. And on the other hand HBO and Cinemax reported that they have a record number of subscribers which reached 2.8 million.
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One major problem HBO will face is that they will have to differentiate between the HBO Go and HBO Now services. HBO Go is a service that allows HBO’s cable TV subscribers in accessing content on the Web, tablets and smartphones. Both of the services will have separate applications and log-in pages. So HBO Now is a service for people who don’t subscribe through TV and HBO Go is a service for people who want to watch content on their devices. Michael Learmonth tweeted in which he said that HBO will launch a new web service called HBO Now and its price will be $15 a month. He also said that the launch partner will probably be Apple.