HBO to Launch Stand-Alone Online Service in U.S. in 2015
Richard Plepler unveils the news at Time Warner investor day
HBO made it official on Wednesday: It will launch an online streaming service in the U.S. in 2015 that presumably in some ways will compete with similar offerings from Netflix and Amazon.com.
"In 2015 we will go beyond the wall and launch a standalone over-the-top service with the potential to produce hundreds of millions of dollars of additional revenue. And the international possibilities could be just as large, if not larger," HBO chairman and CEO Richard Plepler said during a presentation at Time Warner's investor day.
"That is a large and growing opportunity that should no longer be left untapped," Plepler said. "It is time to remove all barriers to those who want HBO."
Last month, at an investor conference, Time Warner CEO Jeff Bewkes hinted that HBO was considering such a service.
Plepler didn't give too many details about the service, such as on pricing and when it would launch or other details, saying he didn't want to tip off competitors too much. Shortly after Plepler's announcement, shares of Netflix dropped 4 percent, while shares of Time Warner have been about 3 percent higher as investors digested the HBO news as well as some other rosy predictions coming from the Time Warner investor day presentations.
Bewkes, for example, predicted per-share earnings would more than double by 2018. As of 11:30 a.m. ET, Netflix's stock was down 3.1 percent at $435.13. The company reports its third-quarter earnings later on Wednesday.
"So, in 2015, we will launch a stand-alone, over-the-top, HBO service in the United States," Plepler told the investor day Wednesday before addressing pay TV partners. "We will work with our current partners. And, we will explore models with new partners. 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."
During a Q&A session later in the day, Plepler said: "First, we're going to look at the 10 million broadband-only homes with our partners," calling them the "low-hanging fruit."
He added: “This is the most exciting inflection point domestically and internationally in the history of HBO.” So far, the HBO Go service is not available without a pay TV subscription in the U.S. An online-only HBO Go service has done well after some initial challenges in Finland, Norway, Sweden and Denmark, Plepler said.