Is HBO’s standalone on-demand video service DOA?
Just days after Dish Network introduced its new Sling TV service, another highly anticipated standalone streaming video product had hit some strong headwinds as it gets closer to become a reality. Changes in strategy at Time Warner have affected the development of the company’s standalone HBO Go service, according to Re/Code.
First announced in October, the new service is being targeted at the 80 million U.S. households that don’t currently subscribe to HBO through a cable or satellite provider. Like Sling TV, the standalone service will work across multiple platforms and be available through a monthly subscription.
Time Warner originally hoped to build a digital platform that would support not only HBO, but other properties such as Turner Broadcasting and Warner Bros. This technology, according to sources, would be used globally and be ready to launch in 2016.
Rising costs, and a bid by Rupert Murdoch’s Twenty-First Century Fox for Time Warner last summer, changed this plan.
Now, Time Warner is focused solely on building a standalone HBO Go product that will launch sometime in 2015. Instead of doing this in-house, the company has turned to MLB Advanced Media, a subsidiary of Major League Baseball known for powering the technology that streams live baseball games.
The change will save the company millions of dollars, which is being viewed as good news for investors. Twenty-First Century Fox has since withdrawn its bid for Time Warner.
In the meantime, Time Warner has lost a number of key executives who were once tasked with getting the Internet service up and running.
Otto Berkes, who was previously a Microsoft executive, resigned from the CTO position in December, only a matter of months before HBO is expected to start selling the new product, and two senior vice presidents on the technology team, Mark Thomas and Drew Angeloff, are also leaving, sources familiar with the situation said.
So when will HBO’s standalone service finally debut in the U.S.? Time Warner isn’t saying. They have also been mum on the pricing for the new product and how it will be sold.
Some believe that Time Warner should have kept with its original plan and created an Internet platform in-house. One source notes “HBO and Time Warner lost the appetite for the investment required to go big here.” They continued, “Old media lost its nerve.”
I’ve long been a “cutting the cord” advocate, believing that we should only have to pay for the TV channels we want. I also recognize, however, that cable and satellite providers continue to be huge players in the marketplace, meaning that changes will take time.
I expect that we’ll be seeing a standalone HBO Go service launch later this year, despite the growing pains. In the meantime, we can celebrate the arrival of Sling TV, which is definitely a step in the right direction as far as cutting the cord goes.
Announced earlier this month, the service offers access to live feeds from ESPN, ESPN2, TNT, TBS, Food Network, HGTV, Travel Channel, Adult Swim, Cartoon Network, Disney Channel, ABC Family, and CNN. The cost: $20 per month. Additional channel packs will be available for $5 per month each.
