By Liana B. Baker
Oct 25 (Reuters) – Comcast Corp customers will soon be able
to buy premium movie and TV channel HBO and its HBO Go online
service in a pared-down basic cable package that includes about
10 channels plus Internet access, for an introductory price of
about $50 a month.
The new offer, which is publicized on Comcast’s website, is
a chance for Time Warner-owned HBO to reach subscribers who felt
they could not afford the channel before. Until now, HBO was
generally marketed to customers who buy the priciest TV packages
through their cable company.
Comcast’s website said the “Internet Plus” offer, which ends
on Jan. 31, provides 10 or more non-sports basic channels,
including local broadcast and government channels, along with
broadband service. After 12 months, the price rises to $69.95 a
month. In some markets, the base price for the first year is as
low as $40, Comcast said.
Streampix, which is Comcast’s Internet streaming service
for movies and TV shows that competes with Netflix, is also part
of the offer.
The deal with Comcast, the largest U.S. cable company, with
more than 20 million video subscribers, brings HBO a step closer
to being some one day outside of a cable subscription, said
Morningstar analyst Michael Corty.
“For HBO this is a test run. They are testing the waters,”
Corty said.
HBO launched HBO Go in 2010 to let subscribers view its
shows over the Internet on devices such as Apple Inc’s
iPads, at a time when consumers were flocking to online
streaming services such as Netflix Inc.
HBO Go has about 6.5 million registered users, compared with
more than 100 million for HBO’s main service globally.
However, HBO Go is only accessible to viewers who pay for
cable TV service, plus an extra fee for HBO. Until now, that
meant monthly bills of $100 or more typically for people who
want to use HBO Go. Comcast’s package would be the cheapest way
so far to get access to the service.
HBO and Time Warner’s top executives have maintained that
the HBO Go product could one day be sold separately but that
currently the economics do not make sense, with cable operators
providing a large chunk of the network’s profit and revenue.
HBO is a money maker for Time Warner. It generated $4.5
billion in revenue in 2012, according to Gabelli & Co analyst
Brett Harriss.
(Reporting by Liana B. Baker; Editing by Steve Orlofsky)
