×
You will be redirected back to your article in seconds

HBO’s Over-the-Top Service: Here’s What We Know

HBO has shaken up the media biz with its plan to launch a standalone over-the-top service next year, making the pay-TV titan the first major cable programmer to be marketed to consumers who do not pay for a traditional MVPD (multichannel video-program distribution) subscription.

HBO chairman-CEO Richard Plepler made the announcement Wednesday with dramatic flourish at Time Warner’s investor-day presentation: “It is time to remove all barriers to those who want HBO,” he said.

Details about HBO’s plans were scant. Between Plepler’s comments and discussions with industry insiders, here’s what we know so far:

  • The new offering is likely to resemble the existing HBO Go authenticated service in offering a broad on-demand menu of new and vintage HBO and Cinemax programming. It is not expected to emulate the extensive channel cluster that linear subscribers receive.
  • HBO aims to work with cable operators in marketing the service as a carrot for those subscribers who only take broadband service from cable providers. “There’s tremendous opportunity for us with our partners to go after these subscribers,” Plepler said. Just to reinforce the point, he noted that the primary focus early on would be the roughly 10 million U.S. households that receive video only through broadband. He called them the “low-hanging fruit.”
  • HBO has had conversations with a range of partners for years, but no deals are imminent. Wednesday’s announcement was akin to hanging out the “Open for Business” sign.
  • Going it alone as a direct-to-consumer offering is an option for HBO, but sources said that is seen as a less attractive route that partnering with MVPDs or established digital players. Industry sources noted that digital distributors of an unbundled HBO could range from Microsoft Xbox and Sony PlayStation to Google and Apple.
  • There’s no word yet on pricing for the service, which is a key question. But sources say it’s unlikely that HBO would significantly undercut its traditional partners.

HBO’s announcement caught pay-TV providers by surprise, but key sources said the largest operators have been expecting this move for some time. Comcast, Time Warner Cable, Verizon and AT&T are already offering low-cost TV packages that include HBO and only broadcast TV channels in an effort to appeal to cost-conscious consumers. So there is precedent for Plepler’s point about working with MVPDs to use HBO as a carrot to lure reluctant subscribers.

In the post-presentation Q&A, Plepler downplayed the “cannibalizing” effect that this effort could have on basic cable service, which is important to HBO’s corporate sibling, Turner Broadcasting. Plepler cited a stat that 85% of Netflix subscribers also take some form of MVPD service.

MVPD sources were skeptical that an OTT HBO service could include the entirety of the HBO program library, as HBO Go now does.

Sources were also quick to note that many operators have “most favored nation” clauses in distribution deals with HBO. Those would allow them to drop the price they charge if HBO were to allow another distrib to sell it at a discount. It’s unclear how that would be sorted out of the OTT service is a different animal than the linear package.

Industry sources say they expect Showtime to follow suit in the near future. In a statement, Showtime would say only that OTT is something it has been “examining for some time. The subscription model is ideally positioned to take advantage of developing technologies in the consumer marketplace.”

(Pictured: Warner Bros.’ Kevin Tsujihara, Turner’s John Martin, Time Warner’s Jeff Bewkes, HBO’s Richard Plepler and Time Warner CFO Howard Averill at Wednesday’s investor presentation)

More TV

  • Federation Entertainment Acquires Israeli Series 'In

    Federation Entertainment Acquires Popular Israeli Series 'In The Spectrum' (EXCLUSIVE)

    Federation Entertainment has acquired distribution rights to Dana Idisis and Yuval Shafferman’s critically acclaimed original Israeli series “On The Spectrum” which took home the top Grand Jury Prize at Series Mania last year after premiering at Tribeca. Produced by Sumayoko Productions and YesStudios, “On The Spectrum” was commissioned and broadcast on Israel’s premium platform YesTV [...]

  • European Union Placeholder

    European Parliament Gives Final Approval to Controversial Article 13 Copyright Directive

    The European Parliament on Tuesday gave final approval of Article 13, a controversial directive that shakes up the rules around copyright in the continent with ramifications for online platforms, content owners and creators, and the general public. The proposed new framework, now approved, has sparked widespread debate among the platforms, public, and content firms. The platforms, [...]

  • Fox Disney Layoffs

    Fox Studio Quickly Fades Away as Disney Starts Work on Integration

    In the waning days of 21st Century Fox, there was a run on the searchlight. As Disney neared the completion of its $71.3 billion acquisition of 21st Century Fox, employees on the Fox lot rushed into the studio’s gift shop to pick up mugs, shot glasses, sweatshirts, hats and T-shirts emblazoned with 20th Century Fox’s [...]

  • Purple

    French Women’s Drama ‘Purple’ Wins Series Mania Co-Pro Pitching Sessions

    LILLE, France — At an awards ceremony on Monday night, French drama series “Purple” was announced as the winner of the Series Mania Co-Pro Pitching Sessions, scoring a cash prize of €50,000 ($56,500), the TV festival’s main industry award. The ceremony was hosted by Series Mania founder and general director Laurence Herszberg and jury president [...]

  • Osmosis

    Netflix Unveils Four More French Originals, 'Gims,' 'Anelka,' 'Move,' 'Of Earth And Blood'

    As it prepares to open a fully-staffed office in France and ramp up its investment in local originals, Netflix has unveiled three new documentaries, “Move” (working title), “Gims” (working title), and “Anelka” (working title), and the feature film “Of Earth And Blood” while at Series Mania in Lille. Announced during a panel with Netflix’s commissioning [...]

  • Charmed -- "Let This Mother Out"

    'Charmed' Showrunner Exits, Craig Shapiro & Elizabeth Kruger Board Series

    The CW’s reboot of “Charmed” is changing showrunners. Variety has learned that Carter Covington has stepped down as showrunner on the series, which has already been renewed for a second season. Husband and wife team Craig Shapiro and Elizabeth Kruger have been brought on to helm the series going forward. Shapiro and Kruger are currently [...]

  • Apple TV Plus Reese Witherspoon Jennifer

    What We Know About 'Amazing Stories' And Other Shows Coming to Apple TV+

    Viewers got a sneak peek of upcoming shows coming to Apple TV+, Apple’s newly unveiled streaming service, during the company’s live-streamed event in Cupertino, Calif., on Monday. The stars and creators of the most highly anticipated projects like Steven Spielberg’s “Amazing Stories” and “The Morning Show” from Reese Witherspoon appeared on stage to reveal more [...]

More From Our Brands

Access exclusive content