Netflix, Inc. Down After HBO Streaming Service News

HBO announced on Wednesday, October 15th that it will offer an online-only streaming service sometime in 2015. This surprise HBO streaming news means the firm will soon be directly competing with Netflix, Inc. (NASDAQ:NFLX), and will give “cord cutters” a way to view all current HBO programming without a cable subscription.

HBO chairman and chief executive Richard Plepler made the big announcement while making a speech at an investor meeting for parent company Time Warner.

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Statement from HBO CEO

“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. So, in 2015, we will launch a standalone, over-the-top, HBO service in the United States.”

Plepler would not provide further details on the new standalone streaming service for competitive reasons, but said HBO planned to “work with our current partners”, ie, the cable and satellite companies that currently distribute the premium pay-TV channel.

“This is the most exciting inflection point, both domestically and internationally, in the modern history of HBO,” he added at the end of his presentation at Time Warner’s investor day meeting.

Three possible distribution models for new HBO streaming service

In his speech, Plepler discussed three possible distribution models for the new HBO streaming service. One possible model is to sell the online-only service through HBO’s existing cable providers (Time Warner, Comcast and so forth, where you can purchase HBO streaming without a cable subscription). A second is model to distribute the service using new partners like, Inc., (NASDAQ:AMZN), Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) and/or Microsoft Corporation (NASDAQ:MSFT). A third possibility would be to attempt a model like Netflix, Inc. (NASDAQ:NFLX), whereby HBO markets its streaming service directly to consumers without a middleman.

Other HBO streaming initiatives

HBO already launched a streaming app called HBO Go back in 2010 which allows viewing current programs, but the service is only available to cable service subscribers. HBO also took another step into the streaming world earlier this year when it licensed most of its content library to Amazon Prime.