More details are beginning to emerge on HBO's new standalone online video service, HBO Now. The latest: Its deal to launch exclusively on Apple TV (NASDAQ: AAPL) is apparently part of a strategy to be available to subscribers through partners, rather than directly.
Unlike an SVOD service like Netflix (NASDAQ: NFLX), where consumers sign up directly with the provider, getting access to HBO Now means first signing up with Apple (presumably creating an account after purchasing an Apple TV), The Verge reports. Or, becoming a Cablevision (NYSE: CVC) Optimum customer--the operator announced on Monday its new partnership to bring the service to its broadband subscribers.
With two partnership deals announced and more deals likely, the move seems on the surface to be a way to appease traditional cable operators, which have worried that the standalone service will cannibalize their subscriber revenues. HBO currently splits its revenues with cable and satellite operators. With more MSOs adding "cable lite" or broadband-only packages to their service bundles, the potential is there to market HBO Now to operators' more OTT-focused subscribers and retain some of the subscriber revenues they currently stand to lose.
It's also not clear when HBO Now will be more widely available. Apple's exclusive deal with the service will run at least three months, beginning in April. The device maker is clearly hoping that HBO Now will boost sales of Apple TV, which still lag behind Roku and Google's (NASDAQ: GOOG) Chromecast device according to a December Parks Associates report. Meanwhile, Time Warner CEO Jeff Bewkes said that Apple's marketing muscle was the driving force behind their partnership.
In addition to HBO Now and, for a few months at least, a reduced price on the Apple TV device, consumers may soon have another reason to ditch their Roku for an Apple TV. According to The Wall Street Journal, Apple is in talks with programmers to offer a linear OTT service with about 25 channels. The service reportedly will launch this fall.
Such a move would put it into competition with Sling TV, already in operation, and Sony's planned OTT television service, which is continuing to shore up licensing deals.
For more:
- The Verge has this story
- WSJ has this story
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