CBS and HBO plan streaming services

17 October 2014

NEW YORK: HBO and CBS, the US TV networks, have both announced plans to launch stand-alone, online streaming services to US households that have high-speed internet access but no pay-TV service.

Speaking at an investors' conference organised by parent company Time Warner, HBO's Richard Plepler said viewers would not require pay-TV subscription for the service, USA Today reported.

Those 10m households represent "a large and growing opportunity that should no longer be left untapped," he said. "It is time to remove all barriers to those who want HBO."

"There are 80m homes that do not have HBO and we will use all means at our disposal to go after them," he asserted.

Meanwhile, CBS's new "CBS All Access" service will provide live programming as well current and past shows on-demand at a cost of $5.99 per month.

The live service will start off in 14 US markets, including New York, Los Angeles, Chicago, Philadelphia, Dallas and San Francisco, with more expected to follow.

According to the New York Times, these developments mark the arrival of "à la carte TV" much faster than many in the media industry expected.

"Everybody is talking about it. It is an important part of our future," said Leslie Moonves, the chief executive of CBS Corporation.

"Our job is to do the best content we can and let people enjoy it in whatever way they want. The world is heading in that direction."

The announcements follow news that Netflix reported lower-than-expected global subscriber growth of 3.02m in the third quarter, which caused its share price to drop by 27%.

"HBO and ESPN are the two main reasons why people have cable and satellite TV," James McQuivey, an analyst at Forrester Research, told Associated Press.

"The whole industry has eyed them for years nervous that one day they would decide to do exactly what [HBO] said they'll do in 2015. We don't know until we see pricing and packaging how rapidly this will force a change in the way pay TV operators work, but it will definitely force a change," he predicted.

However, breaking away from the cable and satellite providers may force HBO to incur additional expenses, Associated Press said, such as having to build up its own customer service and marketing departments.

To date, those responsibilities have been managed mostly by the pay-TV providers that include HBO in their packages.

Data sourced from USA Today, New York Times, Associated Press; additional content by Warc staff