HBO announced last week that it will offer a streaming-only subscription option for its popular television programming in 2015. The Time Warner channel’s content will not require a separate cable subscription to watch via its HBO GO service on the web or connected mobile apps, as it does now. This is being lauded as a win for “cord cutters” who have been clamoring for access to HBO programming without the required cable contract.
But HBO’s bold move is more than just a convenience for cord cutters. It’s the next step in transforming the broadcast entertainment industry, and it will undoubtedly shake the already tenuous foundation that cable providers have built their businesses on in the era of Internet streaming.
Since the advent of Netflix, Hulu, and Amazon Prime, consumers have begun to shy away from the traditional ways of consuming content. In fact, the U.S. paid television market declined for the first time in 2013 by more than a quarter of a million users. That’s small to start, but many users are still beholden to cable television because subscriptions are required in order to use the mobile apps tied to many pay-for-play networks.
But HBO is not ignoring the writing on the wall for the traditional cable model, and it seeks to provide users a different avenue to its popular content that cuts out the middle man and gives people access to what they want, whether it be on connected TVs, computers, or mobile devices.
This also pits HBO in direct competition with popular streaming service Netflix, which shared that same day that its subscriber growth — along with its stock — has begun to slip. Netflix has thrown money into original programming like House of Cards and Orange is the New Black in an attempt to capitalize on the popularity of “binge watching” and stand up to the formidable programming via HBO GO, such as Game of Thrones, Silicon Valley, and Girls. But with the advent of direct HBO subscriptions that do not require cable, Netflix might be feeling even more of a pinch in the coming year.
We work with a number of clients on what it really takes to transform their enterprises, because there comes a point where mere change is not enough. HBO understands that the cable industry needs to significantly alter the very fabric of its enterprise in order to move forward into a real transformation, but it is no longer content to wait for that to happen. The demise of paid cable has been talked about since the advent of Netflix, Hulu, and Amazon Prime, but HBO’s move to bring its content to the more than 80 million homes without a cable-related HBO subscription finally signifies a change in the old guard.
For an industry that enjoys keeping its content behind locked doors, this is a truly strategic transformative step that could put the cable industry one step closer to the much-dreamed of a la carte model in order to draw cord cutters back into the fray, putting the real control of content into the hands of the consumer.