For the very first time, HBO fans can get access to all its content without going through a cable company.   Are cable companies suddenly turning into middle men? Welcome to the era of ala carte content.

Front page news:

At this week’s Apple event, Tim Cook & Co. announced an exclusive partnership to sell its HBO Now service and the industry went nuts.  For $14.99 a month, subscribers will get access to HBO’s hit shows like “Girls” and “Game of Thrones” via an app directly on their Apple devices. After opening the app, you can access new shows and HBO’s deep vault of content including documentaries, sports and older original programming including “Sex and City” or “Curb Your Enthusiasm” episodes (hooray!). The service launches sometime in April and will be exclusive to Apple for 3 months. It is the exact same content current pay TV subscribers get through the HBO GO streaming service, but now there’s no need to subscribe to cable to get the streaming content.

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Reading between the headlines:

With this deal, the media landscape shifts yet again.  By offering the service through non-cable companies, HBO clips its dependence on the Comcasts of the world and creates new pathways to get to the customer, who is sick of paying upwards of $100 to get access to HBO.  It is also creating a new trend where customers only pay for exactly the bundles of content they want to watch. It’s like dining off the ala carte menu versus gouging at an all you can eat buffet. With this, millions of customers will feel less fearful of cutting ties with their Pay TV provider (cable, satellite).

With this groundbreaking move, HBO could get 10-15 million new subscribers. In fact, according to a Parks Associate survey, half of HBO Now’s subscribers are interested in CANCELLING their pay TV service.

So does this mean the death of TV?

“Television is not dying, but it is evolving…the age of appointment television is coming to a close, and programming will need to adapt to an on-demand environment.” – Glenn Hower of Parks Associates

What’s next:

In order to get the reach HBO is looking for, it needs to launch on other services including Netflix, Roku and Amazon Prime. So just sit and wait for that to happen. Also an extension to the Android platform seems like a no-brainer too.

We’ll also look to hear about how profitable this venture is for HBO. Think about it. They will lose cable subscription revenues in this shift to a new model.  It won’t come without a price either. Apple historically  takes a 30% cut of sales of iTunes.

Finally, wait for more bundles to come.  My prediction is that cable companies will flood the markets with their bundle-creation over the next 5 years – until the right balance is found. But first, they need to throw lots of bundles at the wall to see what sticks.  Already, Viacom has announced a streaming Nickelodeon channel and NBC has plans for streaming comedy content, see what I mean?

All hail consumer choice!

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