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Source: Comcast Launching HBO Broadband Bundle Aimed at Netflix
by Karl Bode 04:21PM Thursday Oct 24 2013
An insider familiar with Comcast's promotional plans tells DSLreports that the company is preparing a new broadband and HBO streaming bundle aimed squarely at Netflix. The new promotion will be called "Internet Plus," and will include Limited Basic TV (20 channels plus VOD), Comcast's streaming video service StreamPix, 25 Mbps broadband and HBO/HBO GO. The 12 month promotion is expected to retail for $40-$50 depending on the market (or, more specifically, the lack of competition in your market).

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The new option is launching this month, though it's unclear if it will be available in every Comcast market. After 12 months the bloom is off the rose -- the promotional price jumps to $60 to $70 for six months, then jumping to $70 to $80. After that, it's up to the user to negotiate a better deal.

The most interesting component of the offer is the inclusion of HBO and HBO Go. HBO has of course been very stubborn when in comes to the idea of a standalone HBO streaming option, though HBO and cable executives have been talking for much of the year about possibly bundling HBO with smaller broadband packages. Internet Plus is clearly the first tangible product of those talks.

"Nearly a decade of promotional offer designs, and we have never had a limited basic/premium combination," notes the source. Comcast executives clearly think the combination of 20 channels, HBO Go and Streampix is enough to prevent Netflix defectors, but whether that strategy works remains unclear.

Comcast launched their Streampix streaming video service last year, and while cheaper than Netflix ($5 for Comcast subscribers compared to $8 for Netflix) it suffers from a lack of content like many "me too" ISP streaming video options.

The cable industry wants to prevent customers from backing away from the larger channel bundles (and the relentlessly soaring prices the cable and broadcast industry insists on charging for them). So far, however, cable industry talk about competing more seriously on price has largely been empty lip service. While this tier is a step forward, the sharp bump in price post promotion reflects some ongoing industry tone deafness in regards to consumer value.

Meanwhile, this is likely only the beginning of a larger frontal assault on Netflix. In addition to these new smaller plans and Comcast's slow but steady march toward usage caps and overage fees, Comcast is working very hard on licensing deals (one with 21st Century Fox in particular) that make it much harder for Netflix to license mainstream content.

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