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Time Warner Collaborates with Apple to Launch HBO Now

Time Warner Inc. (NYSE:TWX) has roped in Apple Inc. (NASDAQ:AAPL) as its exclusive partner to launch the standalone streaming service of its premier channel HBO.

HBO’s CEO Richard Plepler announced the collaboration at the Apple event on Monday. HBO Now’s launch is perfectly timed with the season five premiere of the channel’s blockbuster show Game of Thrones.

HBO Now will be available on all Apple devices including iPhone, iPad and Apple TV from April for a monthly charge of $14.99. The subscribers will have access to all of HBO’s latest as well as archival content (both shows and movies). On its part, Apple slashed prices for Apple TV from $99 to $69 to make sure HBO Now reaches a wider audience.

In Oct 2014, Time Warner, which carries a Zacks Rank #3 (Hold), announced the launch of HBO Now. Online HBO will target those 10 million consumers who have access to internet but do not subscribe to cable. The group consists mostly of ‘millennials’ who have moved to internet TV.

For some time now, streaming services like Netflix’s (NASDAQ:NFLX) Hulu, Inc.’s (NASDAQ:AMZN ) Amazon Prime Instant Video and Google Inc’s (NASDAQ:GOOGL) YouTube have made internet TV quite popular. This, along with rising cable bills have resulted in large number of cord cutters.

Given HBO’s popularity, it was only matter of time before this channel went online to directly market its content to the Gen-next viewers.

Many analysts view this development as strong enough to alter the Pay-TV landscape. As per them, other popular channels will also follow suit in the coming days. CBS Corp has already announced a streaming service for Showtime, HBO’s arch rival, somewhere in 2015.

However, some analysts believe, apart from Pay TV, this move could prove dicey for the company as well. At $15 per month, HBO Now is rather expensive compared to Netflix, which offers a comparable service at almost half the price.

Moreover, availability of independent HBO might turn out to be a threat for other Turner Broadcasting channels like TNT, TBS and Cartoon Network that comes mostly in cable packages along with the channel. With HBO Now, many subscribers would also cancel their cable subscription. This move will definitely not go down well with the cable service providers. Angering service providers might jeopardize HBO Go, a streaming service from Time Warner that the viewers can access through cable subscriptions.


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