HBO to unleash a game-changer.
Tom Dougherty, CEO – Stealing Share
16 October 2014
HBO announcement spells doom for cable and satellite
The revolution to rid ourselves of cable and satellite TV providers took a long-awaited step forward yesterday when HBO announced that it will offer its HBO GO-like app to those who are not subscribers to either cable or satellite.
If you don’t think this is a big deal, think about this. If all the TV content developers (like HBO) decide to skip the middlemen (cable, satellite) and go directly to viewers, cable and satellite TV is effectively finished.
For the HBOs of the world, this is a chance to ride the current wave of Internet viewing and collect revenue without paying fees to the cable and satellite companies. For viewers, it’s a chance to “cut the cord,” as so many have already done and gain the control of their viewing habits.
For the cable and satellite companies, it spells doom.
The content developers knew this was coming, already offering apps that show current shows and, in some cases (HBO), offer its entire library. But you had to be a subscriber to either cable or satellite to use it.
The argument from some content developers has been that going the entire Internet route would inhibit the ability for them to develop other channels or shows because many companies own more than one channel. Viacom, for example, owns MTV, Nickelodeon, TV Land, Comedy Central and many others. But CBS announced today that it will offer an all-access subscription service (although it won’t include its NFL package).
Therefore, I think even Viacom will eventually go the HBO route. If you’ve watched any programs on these kinds of apps (such as FXNOW), you see other shows on FX being advertised during breaks. The companies could do the same thing for new channels or make it a package deal.
I’ve noted this before, but the final move that will shut off the cable and satellite lights forever is live TV, especially sports. Of course, you can buy an HD receiver that gets you the local channels on which many sports are carried. However, if ESPN (or any of the other sports channels) goes the HBO route, it’s really over.
The sports leagues themselves could offer packages that go directly to consumers, and DirecTV and the NFL are running some pilot programs at universities with that strategy. But the NFL, for example, still needs someone to cover the game and that league in particular gets billions from its television contracts. So don’t expect that anytime immediately.
The day is coming when cable and satellite providers are no more, or nothing more than Internet providers. You do see them thinking ahead somewhat with DirecTV now developing its own TV shows.
But make no mistake. This move by HBO is a game-changer.
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