Apple (NASDAQ: AAPL) announced Monday that HBO's new a la carte streaming service, HBO Now, will launch exclusively on Apple TV and iOS devices in April, at a price of $14.99 a month.
Apple conducted a Monday morning press conference primarily to discuss its new wearable, the Apple Watch. But HBO CEO Richard Plepler was also at the event to disclose what was arguably one of the year's most anticipated announcements in the pay-TV industry.
"All you need to get HBO Now is a broadband connection and an Apple device," Plepler said to a throng of tech-blog reporters. "There will be a brand-new HBO Now channel on Apple TV so you can enjoy it on the big screen or you can watch HBO Now on your iPhones and iPads."
According to Plepler, the service will launch in time for the April 12 season premiere of hit show Game of Thrones.
HBO said it's launching HBO Now, which doesn't require a pay-TV subscription, to tap into what it estimates to be 10 million U.S. broadband consumer who aren't cable, satellite or IPTV users.
"This is the moment," said James McQuivey, an analyst with Forrester Research, to the Los Angeles Times. "We'll look back and say this was when the game was fundamentally changed ... This action by HBO will almost certainly encourage cord-cutting."
Indeed, the implications of having a premiere programming service that's always been exclusive to pay-TV leave the walled garden are significant. However, confinement to the Apple universe of devices will have limiting effect on impact.
The exclusive relationship with Apple will provide HBO with sorely needed marketing muscle for its new service. HBO has, since it launched more than two decads ago, always relied on its pay-TV partners to promote its service--a luxury not enjoyed for HBO Now, given the lack of support for the product in the pay-TV industry.
However, the programming service will be shut out of some of the biggest streaming platforms--Android, Roku and Xbox One, just to name a few of them.
"You are seeing technology companies take advantage of the frustration that exists with the existing pay-TV system," said Steve Beck, founder of cg42, a management consultant firm, to the Times. "For years, cable TV was the only way that consumers could access the content they wanted to watch. They subscribed not because they loved their cable TV provider but because it was the only way to see the content. But now there are alternatives."
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