Netflix stock was down on Monday as HBO revealed that its standalone video service HBO Now will be available on Apple TV for $14.99 starting next month. According to an HBO spokesman, the company is also in talks with various pay TV distributors to offer the service starting next month.
HBO Now a threat to Netflix?
On Monday, Netflix opened at $454.93, but shares declined immediately to $441.20 after the announcement. Yesterday, Netflix shares closed down 1.87% at $445.63. A similar pattern was noticed in October last year when HBO announced its standalone streaming service.
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According to Seeking Alpha‘s Clark Schultz, “HBO Now is considered a more viable threat to Netflix than streaming options from major broadcasters and pay-TV operator.”
Along with competing with Netflix and Amazon, the new service from HBO could be seen as a threat to the video businesses of cable and satellite television providers, which have been battling hard to retain users.
HBO, Apple come together
Starting in April, HBO Now will be available in the form of a new channel on the Apple TV box and on iPhones, iPads and the iPod Touch. For three months, Apple will hold the exclusive rights to the content of HBO Now.
Both Apple and HBO will market the service. However, on the customer service front, Apple will be responsible for billing related queries, while HBO will look into other customer service issues, according to a report from The Wall Street Journal. As of now, there is no information available on how the partners will divide the revenues. Generally, cable and satellite companies get half the revenue from an HBO subscription, according to The WSJ.
HBO, which is a part of the media giant Time Warner, was an early pioneer of cable television. The service will offer the network’s past, present and future series and its stock of Hollywood movies, according to HBO Chairman and Chief Executive Officer Richard Plepler.
According to the company, HBO Now will offer more than 2,000 titles. The content includes current series such as True Detective, Silicon Valley, Girls, Veep and The Leftovers. Some of the past series that will be included in the lineup are The Sopranos, Sex and the City, True Blood, The Wire and Deadwood.