According to an announcement made today, HBO is to launch a stand-alone Internet streaming service which will begin in April.
The service will only be available to Apple users, and will cost $14.99 a month. The launch date is timed to coincide with the next season of “Game of Thrones,” the network’s most-watched series.
HBO Now: opening offer
The new service is to be known as “HBO Now,” and will not require a subscription to other cable or satellite services. HBO’s original offerings both past and present will be available, as well as movie offerings. The company is currently in talks with potential partners.
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Early adopters who sign up in April will get their first month free. HBO CEO Richard Plepler called the launch a “transformative moment for HBO,” during an Apple event in San Francisco.
HBO’s digital service was first announced in October, and will add another rival to Netflix and Amazon in the online-streaming arena. Traditional television will also come under increasing pressure as new digital streaming services are introduced this year by companies such as Dish Network, CBS and Sony.
Companies are struggling to remain relevant to the increasing number of people who only watch television shows and movies online. There are an estimated 10 million U.S. homes that have internet access but now cable television subscription, a large market for HBO to target.
Parent company Time Warner needs to implement a broad growth strategy after rejecting an $80 billion takeover bid from 21st Century Fox. Part of that strategy is growing digital business, developing new original programming, placing more emphasis on international business as well as a round of cost-cutting at various television and film properties.
HBO and Time Warner will need to be careful not to damage relationships with cable and satellite television companies, from whom they currently earn billions of dollars in revenue.
HBO and sister network Cinemax added 2.8 million subscribers over the course of 2014, the highest figure in over 30 years. Together the two networks have 138 million worldwide subscribers, and approximately 46 million paid U.S. subscribers. Rising subscription revenue, as well as licensing fees for original programming, led to a 10% increase in revenue at HBO last year.
Netflix had 59 million total paid members, with the U.S. market accounting for 40 million of those.