A New Era in Streaming as CBS and HBO Announce Direct-to-Consumer Plans

Finally! Two channels have announced their own direct-to-consumer access sales. In a world of “cord cutters” (people who are fed up with ever-increasing cable costs and so stop subscribing) and “cord nevers” (younger customers who don’t see the need to subscribe to a cable or satellite TV service at all), networks are finally realizing that protecting the cable/dish monopoly in TV provision isn’t in their best interest.

First, HBO announced that 2015 would bring a stand-alone internet streaming service.

Richard Plepler, chief executive of HBO, pointed to 10 million homes in the United States that pay for broadband connections but not a traditional TV service.

“That is a large and growing opportunity that should no longer be left untapped. It is time to remove all barriers to those who want HBO,” he said. “All in, there are 80 million homes that do not have HBO and we will use all means at our disposal to go after them.”

HBO already has an HBO Go service set up, but to access it requires a subscription to traditional pay TV. That provides a framework to build on. No word is yet available on what HBO will charge, and that may be the sticking point. HBO costs about $10 a month through cable (depending on the deal), but Netflix or Hulu Plus streaming is $8, with greater variety. We know there are people who are willing to pay HBO directly, mostly just for Game of Thrones, but it remains to be seen if they’ll be consistent subscribers. (If HBO’s service includes lots of past episodes, someone could sign up for a month, binge, and then stop paying. This is why the WWE Network only gives customers the $10/month price if they subscribe for at least six months.)

CBS soon followed suit, but they were willing to say that their plan costs $6 a month. They had to name a price, since it’s available now. The live streaming is only available in 14 large markets, but everyone else can see current programs the day after they air (complete with ads) or access libraries of older programs, including Cheers and Star Trek (with no ads). Sports are *not* included. Since CBS also owns Showtime, expect a similar announcement for that channel soon. CBS has a tougher road than HBO, since with an antenna, you can get their content for free (although not on demand — you’re required to follow their scheduling). Note also that CBS was the only big network not to participate in Hulu — ABC, NBC, and Fox all sell access there.

Many customers have been begging for a la carte subscription models, so they could buy only what they wanted, but if $10 becomes the price point, if you subscribe to only 5 channels monthly, you’d soon be approaching the cost of your cable bill. Plus, you’d be responsible for your own equipment. A Roku box is relatively cheap, and it’s a one-time cost instead of a monthly rental, but the real cost comes with reliable broadband. People who get internet through their cable company will likely find those costs rising quickly to make up for the declining programming subscriptions.

The announcements focus on access through computers and mobile devices, but I’m curious to see which allow for access through devices that connect to your super-large TV screen (such as Roku, AppleTV, Google’s ChromeCast, and so on). Especially if you want to watch with more than one person (old-fashioned, I know), nothing beats the existing equipment setup.

Also, many people are more loyal to particular shows than to networks. People are fans of Mad Men, not AMC. Those types already have plenty of ways to access just the particular show they want, with plastic discs, iTunes season passes, or other outlets. It’s going to be tricky, trying to figure out which services have the items you want to watch.


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