"It's time to remove all barriers to those that want HBO."
With those words, Home Box Office Inc. (HBO) Chairman and CEO Richard Pleper this morning announced at a Time Warner Inc. (NYSE: TWX) investor meeting this morning that his company will introduce an over-the-top HBO service in the US next year. Initially, the new service will be delivered through pay-TV partners in an attempt to reach the millions of broadband-only subscribers. Pleper said HBO will work through its existing distributors (i.e. with cable and telco TV providers), but will also explore opportunities with new partners as well.
Pleper added that HBO will also launch its OTT service in some additional countries later next year. (See HBO Braces to Battle Netflix in Europe, Comcast Set to Bundle Broadband & HBO and Time Warner Shakes Up the Bundle.)
The introduction of a standalone product isn't the only way that HBO intends to boost its profits in the future. The company also plans to negotiate better terms with pay-TV distributors to reduce the number of non-revenue generating subscribers currently on the books. And, for the first time in 20 years, HBO plans to run a brand-specific marketing campaign in an effort to reach new audiences.
On the web, HBO will find itself going head to head with Netflix Inc. (Nasdaq: NFLX), but Pleper is highly optimistic about the network's potential. He noted that HBO had commissioned research showing that when people learn about everything that HBO has to offer, non-subscribers are interested in signing up.
Pleper offered no specific information on pricing or distribution for the new standalone HBO service, saying that for competitive reasons he couldn't reveal details yet. However, he was demonstrably confident that the new OTT offering would be compelling, saying "this will be transformative for our company."
— Mari Silbey, special to Light Reading