
HBO has worked recently to make itself more like Netflix.
For years, HBO and its fellow movie-heavy channels have existed as part of a “premium cable” plan that customers had to pay extra to access. Longtime HBO users, despite the extra cost, have been rewarded by a prevalence of dark, complex, and interesting television programming (The Wire, The Sopranos, Boardwalk Empire, Six Feet Under, Game of Thrones, etc.), a dearth of commercials and advertisements, and a treasure trove of recently-released films.
Now, however, with services like Netflix offering a huge range of programming in an on-demand fashion – including popular HBO shows – and more viewers flocking to online streaming services, both legal and illegal, to satiate their television and film needs, HBO’s premium cable business model is no longer as lucrative as it once was. Just last week, Netflix officially passed HBO’s base of 30 million United States customers, and the streaming service will only continue to grow as TV becomes more about watching what you want, when you want.
HBO has worked recently to make itself more like Netflix, introducing HBO Go, a service that allows subscribers to stream all of the shows in HBO’s archive, as well as the entirety of its current movie line-up, via the internet on a computer or mobile device.
However, with other streaming services out there that are more versatile than HBO Go (Netflix among them), the king of premium cable is now working to cater more to a budget-conscious consumer base. The first step in that movement is a new business agreement with Comcast which, according to a recent report from Reuters, would make HBO available as part of a “basic” cable package.
The new Comcast offer is wholeheartedly targeted at customers with a modest cable budget. For about $50 a month, Comcast customers would be able to buy a cable package consisting of about 10 basic channels – including the primary networks and local or government channels – as well as internet service and HBO access.
For HBO, the current Comcast agreement is less of a permanent arrangement and more of a beta test run. Comcast customers only have until January 31 to latch onto the promotion – called the “Internet Plus” offer – before the package goes away. However, if the package is successful and well-received, it could become a new way for HBO to open up its revenue streams and reach more people without giving up its status as a “premium” network.
For now, at least, HBO is still a lucrative business for Time Warner, the company that owns it. The Reuters report also indicated that HBO had made about $4.5 billion in revenue during 2012 alone.
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