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HBO Finally Realizes It's At War With Netflix

Two years ago, Netflix CEO Reed Hastings stated that Netflix wanted to become HBO before HBO woke up and realized it needed to become Netflix. HBO of course at the time was heavily resistant to the idea of offering a standalone streaming HBO service, wary of cannibalizing its traditional cable viewers and angering its subsidy-laden relationship with cable operators. HBO has since woken up, culminating in this week's launch of HBO Now, its $15 a month standalone streaming platform.

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Fast Company profiles HBO CEO Richard Plepler, and documents HBO's slow but steady shift toward finally giving users what they want. The big shift in thinking came as HBO saw the opportunity in marketing a standalone service to the 10 million broadband subscribers (and growing) who don't feel the need to also have a traditional cable connection:
quote:
Schoen came back convinced that there were two groups with large numbers of "persuadables." One group consisted of the 10 million or so homes with broadband Internet service but no cable subscription...The even bigger opportunity, however, was the 70 million U.S. households that pay for cable but do not have HBO. Schoen believed that 15% were gettable—they had steered clear because HBO, sold as a premium "add-on" on top of basic cable bundles, was too expensive. The average pay-TV bill of an HBO subscriber was $130 a month.
In other words, people weren't adding HBO because they were already paying an arm and a leg for traditional cable. As such, HBO pushed cable operators to offer a lower overall tier of basic TV service that included HBO -- thus all the $40 bundles from companies like AT&T and Verizon we started seeing the last few years. The problem? While the promo prices on those services are initially low, they very quickly balloon back to relatively expensive packages when the promo period ends.

While HBO Now won't appeal to people who don't mind the already higher price tag of their overall bundle (or get a discount on HBO because they're already paying so much), the new service will appeal to cord cutters, standalone broadband users or those who like to mix and match their TV viewing options -- especially those who don't need access to live sports. The big question is whether or not HBO will have to budge on that $15 price point, or whether Netflix will simply raise prices to meet HBO. Tried the service yet? Post your thoughts in our comment section below.
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GENERAL_ZOD
join:2015-03-26

GENERAL_ZOD

Member

still wont sign up

still wont sign up. they used to have new movie every Friday night something like that till then I wont sign up I want new movies.
Justin024
join:2010-08-11
Atlanta, GA

Justin024

Member

For me it's worth it

It makes sense to sub to HBO from time to time w/o having to worry about calling AT&T to cancel. Right now I'm broadband only w/ Netflix. I use my PS4 and Apple TV box.

However I am thinking about Playstation Vue when it becomes available later this summer in Atlanta. While it is $50 I can come and go as I please plus it has a lot of the channels I'm looking for.

SmilingBob
join:2013-09-23
League City, TX

SmilingBob

Member

Like the idea, but...

Won't sign up at $15/mo, which is pretty close to what we pay monthly for Netflix + Amazon Prime Video. Since Amazon Prime has a good deal of the HBO programming from yester-years, the only compelling reason to watch HBO for us is GoT. If HBO Now came down to below $10/month as an add-on bundle with SlingTV? Maybe.

HereToHelp2
@charter.com

HereToHelp2

Anon

Re: Like the idea, but...

Not going to happen. Um Real Time, Last Week Tonight, there are other shows on HBO also. new movies every month. HBO is not pricing this service low than cable. They still need cable and they aren't going to tick them off that much. Netflix is going to have to raise prices again soon. They can't sustain their service at $9 a month. Sling gives you 3 HBO streams. Find someone to give you $5 a month for one of those streams.

SmilingBob
join:2013-09-23
League City, TX

SmilingBob

Member

Re: Like the idea, but...

I didn't realize Sling gives 3 HBO streams, so I guess there is some value there since SlingTV is a single stream at a time normally. Most other shows do not interest us in the least, but GoT is a favorite. We can watch a good portion of the HBO offerings on Prime Video, as I mentioned. Can't really justify another service just for one show, but I guess one could subscribe for a month after the GoT season is over and binge watch it and then cancel until next season. Thanks for the info.

twiZZle9912
@cox.net

twiZZle9912 to SmilingBob

Anon

to SmilingBob
HBO go (no sling) is a much better deal, the sling version you don't get as much - and you can watch it on a few of your devices too, so right now just on Apple TV or iphone/ipad but still for the same price you get much more on-demand selection than the sling version, plus it's a free trial on apple (for now)

climardo
@verizon.net

climardo

Anon

I wish I was a cord cutter

Please note, there is some bias in this post since I am a Verizon FiOS subscriber with HBO and Netflix access, but read on for my thoughts: MLB makes it impossible for me to be a cord cutter without moving or somehow spoofing my location. Also, having a fiance who watches reality TV and other mindless garbage makes it more difficult. And add to that an employee discount for Verizon FiOS that includes every channel (minus some premium sports channels, but including Red Zone) with Internet and phone (who cares) for $79/month (it may be $89, not sure). Not really interested in cutting the cord yet.

With all of the different offerings made available by companies like Netflix, HBO, Amazon and Hulu, one could easily cut the cord nowadays. But thinking about it, for $65/month for 50/50 Fios Internet (you could possibly get something cheaper elsewhere), Netflix $9/month (min. 2 TVs @once), Amazon $8/month, Hulu $8/month, and HBO for $15/month you're paying close to $100/month without even adding sports which are a pain due to the blackout restrictions.

With all that said, I'm sure some of those services overlap in content and you wouldn't necessarily get all of them. And I certainly appreciate not having to pay ridiculous operator, government and other miscellaneous fees that cable providers slip into your bill. AND set top box rental fees... get out of here with those. Let me buy my boxes up front, charge me an upgrade fee if your new features or better service requires new equipment, but don't keep charging me a rental fee for over 2 years when I have likely paid the actual cost of these set top boxes and more. I know I could buy boxes from TiVo but I don't want to pay someone else monthly fees for recording stuff on my own equipment.

Everything about cable is wrong for 2015, but they got me... and I'll keep paying until it doesn't make sense. And when that happens, I will be so glad that Netflix and HBO Now exist. I can't wait for Silicon Valley! As long as Netflix and HBO are committed to creating great content, offer that content using modern delivery methods and charge reasonable,competitive prices, then I'm happy and I think consumers in general will be happy.

Getting to the topic of the original post: does HBO offer a better service and content than Netflix? That question is based on HBO charging more for their service than Netflix. Answer: Yes. HBO has been creating original content for a long time now. Netflix is just getting started, so there may come a day when the tide changes, but not today. Service-wise: we have yet to see if people will start complaining about slow HBO streams, but based on HBO GO having been around for some time now, I don't think that is the case. And HBO Now doesn't have a limit on number of simultaneous streams. I wish HBO was independently owned. Being backed by Time Warner is the only thing that makes me dislike HBO, as a company. But again, competition is usually good for the consumer. Fingers crossed nobody is merging or buying out anyone else.

MalibuMaxx
Premium Member
join:2007-02-06
Chesterton, IN

MalibuMaxx

Premium Member

Re: I wish I was a cord cutter

OTA...

Brian_M
join:2004-06-19
Manchester, GA

Brian_M

Member

Re: I wish I was a cord cutter

... isn't a viable option in a LOT of places.

Anon
@megapath.net

2 recommendations

Anon

Anon

Re: I wish I was a cord cutter

Except it is for like 95%+ of the population

maartena
Elmo
Premium Member
join:2002-05-10
Orange, CA

maartena to climardo

Premium Member

to climardo
said by climardo :

Please note, there is some bias in this post since I am a Verizon FiOS subscriber with HBO and Netflix access, but read on for my thoughts: MLB makes it impossible for me to be a cord cutter without moving or somehow spoofing my location.

A SmartDNS (such as the one from UNblock.US) will solve that. Just put it in your router, and enjoy the full speed of you connection watching mlb.tv - $5 a month, but a whole lot cheaper then cable/fios, even with the costs of MLB.tv, plus it gives you access to a lot of foreign content such as the BBC,

Also, having a fiance who watches reality TV and other mindless garbage makes it more difficult.

The truth comes out. She wears the pants in the relationship. Yeah, cord cutting isn't for you. the (future) wife always wins.

I'm happy MY wife was on board immediately. She is the one with the Amazon Prime account, and thats how she watches all her stuff. The only reality stuff we both watch is The Voice, which I record from OTA.
gutch
join:2003-01-16
USA

gutch

Member

cheaper than cable company

i only signed up because my cable provider charges $20/month

n2jtx
join:2001-01-13
Glen Head, NY

n2jtx

Member

My Perspective

The big question is whether or not HBO will have to budge on that $15 price point, or whether Netflix will simply raise prices to meet HBO.
I'll take "Netflix will raise its prices to meet HBO" for $500 Alex!

They already have a price increase in the pipeline (I am grandfathered at the $7.99 level for another year or so) but they can simply raise the $9.99 tier now and hit everyone else when the grandfather period ends.

aaronwt
Premium Member
join:2004-11-07
Woodbridge, VA
Asus RT-AX89

aaronwt

Premium Member

Re: My Perspective

said by n2jtx:

The big question is whether or not HBO will have to budge on that $15 price point, or whether Netflix will simply raise prices to meet HBO.
I'll take "Netflix will raise its prices to meet HBO" for $500 Alex!

They already have a price increase in the pipeline (I am grandfathered at the $7.99 level for another year or so) but they can simply raise the $9.99 tier now and hit everyone else when the grandfather period ends.

I've noticed recently a note on my Netflix streaming account. It says "Your plan price is guaranteed so long as you stay a member." I've had the 4 stream plan for $7.99 a month for a long time now. This comment implies that I can keep the $7.99 a month price for the 4 stream plan indefinitely. I know at one point it said I was grandfathered into the price. So I have no idea what this new thing is about.

I have no plans to drop my Netflix disc account anytime. I've had it for over sixteen years now.

TOPDAWG
Premium Member
join:2005-04-27
Calgary, AB

TOPDAWG

Premium Member

Re: My Perspective

you only get to keep that steaming 4 plan to some date I forgot what netflix said think it was like 2016 or 2017 or something. ok find it.

»www.ibtimes.com/netflix- ··· -1704345

According to Netflix, the latest price increase will not immediately affect existing subscribers -- already paying for 4K content -- as they will be "grandfathered" into the older $7.99 a month plan until Aug. 12, 2016, HD Guru reported, adding that the new 4K plan allows up to four devices to stream content simultaneously.

Once they rise the price I'm doing account sharing for the 4 streams as I myself will only ever ran one.
biochemistry
Premium Member
join:2003-05-09
92361

biochemistry to n2jtx

Premium Member

to n2jtx
Why increase the price when it gives Netflix such a competitive advantage to be significantly cheaper?
brianiscool
join:2000-08-16
Tampa, FL

brianiscool

Member

HBO

I want the old HBO! Where they would get the movie before it hit stands.

dks7
join:2004-05-31
Omak, WA

dks7

Member

Wars

Wars and rumors of wars, why is everyone so hell bent on using the word war. So many tv shows with that in its title. Competition perhaps, but you can catch more flies with honey, provide a good product, good shows, good delivery, cater to your customers, and you shall be rewarded, be shrewd and greedy and you will die, slowly, but die non the less.
qworster
join:2001-11-25
Bryn Mawr, PA

qworster

Member

Fifteen dollars to use MY bandwidth? No thanks!

Make it ten and perhaps we can talk.