HBO Turns Up the Heat on Netflix with Planned Streaming Service in 2015

by Parks Associates | Oct. 16, 2014

Yesterday, HBO announced plans to add a stand-alone streaming service to its content offerings. Though the company already has a successful subscription streaming service, HBO Go, this new streaming offering would allow consumers to opt-in without having to purchase an HBO subscription through their pay-TV provider.

HBO CEO Richard Plepler noted in his comments yesterday that about 10 million U.S. homes have high-speed broadband and no pay-TV service. Parks Associates research also shows that 55% of U.S. broadband households subscribe to an OTT video service. "That is a large and growing opportunity that should no longer be left untapped," Plepper remarked. "It is time to remove all barriers to those who want HBO."

How will HBO's entrance into the OTT market impact other services, such as Netflix and Hulu? Glenn Hower, Research Analyst at Parks Associates, commented for the San Francisco Chronicle that "if HBO can supply a large and diverse library, including their original content, for a price comparable to Netflix, Netflix is going to have a much more difficult time attracting and retaining customers. Lack of HBO original content has been a criticism of Netflix, and if consumers can get it through an HBO streaming service without a TV subscription, that is where they are going to go."

HBO's announcement comes at the same time that Netflix announced that it over-forcasted its membership growth last quarter, resulting in falling stock prices.

Is the market large enough to sustain both parties? "There is definitely room for both services to coexist," says Hower, who cited that Netflix's original programming—shows that HBO does not carry—can help the company maintain its share of the market.

Read the full USA Today article on HBO's announcement by clicking here, and read the full San Francisco Chronicle article on Netflix's falling stock prices by clicking here.

Glenn Hower currently studies entertainment content and delivery services. Glenn is experienced in entertainment content production and distribution systems with a particular emphasis on radio, television, and film content.

Industry Expertise: TV & Video Content Production, Content Licensing & Distribution, Television Services, Broadband Services, OTT Services, Digital Music

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