HBO CEO Richard Plepler announced today that the company will launch a "stand-alone, over-the-top HBO service in the United States" in 2015. That means that you will soon be able to add HBO to the list of television you buy without a cable subscription, including Netflix, Hulu Plus, Amazon Prime, and NBA League Pass.
This marks a tantalizing development for millions of households without cable (and who, for whatever reason, weren't already borrowing HBO Go passwords from friends and family). Does it also mark the beginning of the end of the cable bundle?
There are three ways to gauge the impact of HBO "Go-It-Alone" on the TV industry:
- How many subscribers will dump cable once they can buy HBO alone?
- How many non-subscribers will be encouraged to remain non-subscribers?
- How will the rest of the industry react?
It seems that the audience most likely to pick up an HBO "Go-It-Alone" product today are mostly the young, lower-income Internet-savvy viewers who weren't cable customers, anyway. That suggests that HBO Go-It-Alone will restrain cable's growth by preventing new sign-ups, rather than hurt cable by creating more cord-cutters.
But that's bad enough. The cable empire is ridiculously profitable, and both the networks and the cable companies have an interest in keeping the gravy train on the tracks. But that empire is shrinking. Last year, cable lost 166,000 subscribers, the first annual decline ever. Meanwhile, hundreds of thousands of other households are downgrading to basic cable services that leave off popular channels like ESPN.