Thanks to the viewing habits of the millennial generation, it appears that this universal desire will become a reality as soon as the winter of 2014. HBO is leading the charge, researching the viability of unbundling from traditional cable and charging discounted premiums for the stand-alone HBO GO app. service, which will allow anyone with a connected tablet or smart phone to watch content like Game of Thrones on demand without cable.
Together, as millennials and cord cutters reject cable, they are changing the face of American television. HBO GO becoming its own service would be a huge victory for them, and for the shifting trends they represent.
Con: Harder for HBO to Create Content
However, offering HBO GO separately from HBO could come at a price. Because for now, HBO, and all the content they provide, are still very much entrenched in a classic model of distribution.
When viewers first started to clamor for standalone HBO GO accounts several years ago, Ryan Lawler at Tech Crunch observed, “HBO currently has about 29 million subscribers and reportedly receives around $7 or $8 per subscriber per month. So HBO could, theoretically, get more per subscriber than it’s currently making. But that doesn’t include the cost of infrastructure needed to support delivery of all those streams, including all the CDN delivery and other costs that would come with rolling out a broader online-only service.””
This could affect the quality and/or quantity of HBO’s famed original content. Shows like Game of Thrones are not inexpensive properties to produce, and season-to-season costs tend to rise rather than fall.”(1)
In an effort to combat “The Netflix Effect,” HBO isn’t the only premium cable provider looking into ways to capitalize on millennials and grow its subscriber base.
“Dish, the second-largest satellite-TV provider, is in a race with other pay-TV providers including Sony Corp. and Verizon Communications Inc. to deliver television via the Internet, all aiming to reach younger users who don’t subscribe to traditional cable. Dish, which had delayed the start of its service from midyear to year-end, is planning to offer lower-cost program bundles viewable on tablets, smartphones and game consoles.” (2)
“Verizon has plans to launch an “a la carte” Internet-based TV service by mid-2015, according to the company’s CEO Lowell Mcadam
At a Goldman Sachs investor conference in New York last week, McAdam announced the company’s plans for the service but didn’t reveal too many details, Huffington Postreported. McAdam said Verizon was eyeing a “late first half of 2015″ launch for the mobile-focused service, which would offer “a la carte” channel options, instead of traditional bundled cable packages.
“No one wants to have 300 channels on your wireless device,” McAdam said.”
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