The veteran pay cable service confirmed plans to offer a standalone HBO streaming service in 2015. Time Warner’s HBO currently offers an online-video service, but viewers must be subscribers via cable or satellite.
“It is time to remove all barriers to those who want HBO,” said Richard Plepler, chairman and CEO of HBO.
Netflix chieftain Reed Hastings — who saw his independent company’s stock plunge 25 percent the same day on disappointing subscriber growth numbers — said the news out of Time Warner was “exciting.”
“We compete with them like baseball and football compete,” Hastings told CNBC. “People who are really into sports watch both. Are involved in both. We have different shows.”
HBO’s Pleper told Time Warner shareholders that the universe of “cord cutters” is “a large and growing opportunity that should no longer be left untapped. … 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.”
An estimated 10 million homes in the U.S. are broadband only, many of them receiving Netflix. Amazon and Hulu are major players in streaming content as well.
Netflix has about 36 million subscribers in the U.S., edging HBO’s 30 million or so.
The streaming service is expected to mirror HBO Go, the current offering. That service does not carry all high-profile HBO shows, to the disappointment of some consumers, but does carry “The Sopranos,” “The Wire” and other classics.
Netflix added in a letter to investors:
It was inevitable and sensible that (HBO) would eventually offer their service as a standalone application. Many people will subscribe to both Netflix and HBO since we have different shows, so we think it is likely we both prosper as consumers move to Internet TV.
Hastings has been a longtime admirer of HBO and its content, often praising the pay cabler’s original content as a model for Netflix’s development of films and TV series.
CBS, meanwhile, announced plans to offer a streaming video service of current and archived shows. CBS All Access is going for $5.99 per month. Live streaming is available in major markets, including Los Angeles, New York and Chicago.