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HBO-Go: The Death of Cable? Print E-mail
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House - Entertainment
Written by Omie Ismail   
Thursday, 18 February 2010 02:57

I have been writing for some time that the death of cable companies will come when premium services like HBO and Showtime start offering their shows via an online subscription. HBO announced today the availability of HBO-Go, an online streaming of many of their hit shows and movies. But if you are clicking on a new browser tab to sign up, you'll want to know about a not-so-little catch.

HBO knows where its bread is buttered. With 100 million cable subscribers, they aren't going to shun their core customers. Those customers being the cable companies... not you! The cable operators have enormous influence and the catch to HBO-Go is that you can't get it unless you are already an HBO subscriber through cable. So today, if you are a Verizon Fios or Comcast customer, you can sign up to start seeing your HBO online. Other cable customers will have to wait until their provider is ready for the authentication.

HBO-Go allows online access to 600 plus hours of current and past shows and movies available in both standard and high definition. "HBO Go immerses customers into an elegantly designed HBO environment with access to a robust offering of HBO programming" said Eric Kessler, Co-President, HBO in the company's press release.

Call it an interim step in the death of the cable companies. In time, HBO will have to weigh the risk of competing with "Streaming Only" companies versus catering to their loyal cable operators. The undeniable fact is that higher speed connections are becoming more ubiquitous and content is flowing over the Internet increasingly unbundled from stuff people don't want. Much like iTunes allowed users to pick the songs they like without buying the whole album, someone is going to eventually break the networks apart from the packages that make cable so profitable. Cable bills of $60 to $100 a month are an enormous target for aspiring entrepreneurs and well positioned companies.

Of course, the real threat to both HBO and the cable companies has been Netflix. With the ability to stream content originated from a multitude of networks on Netflix, many people have pulled the plug on cable. While HBO-Go might be a nice perk, it is unlikely to be a Netflix killer. The cost to have HBO is on par or higher than Netflix and the selection of titles and sources is far fewer.

Right now, Netflix has 12 million subscribers but that's still just a fraction of cable's 100 million customer base. But even as the pool of cable clients shrinks, Netflix continues to grow subscribers at twenty to thirty percent per year. Given that irreversible dynamic, the pressure on all industry players to offer a streaming only subscription will magnify. I for one would pay $20 a month just to get HBO and be able to junk the rest of my cable subscription.

So the bottom line is, if you are a Comcast or Verizon Fios customer, you get a nice perk but if you are waiting for an HBO only plan, you'll have to wait a little longer.

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