According to Gabelli & Co analyst Brett Harriss, HBO generated somewhere in the neighborhood of $4.5 billion in revenue in 2012 for its parent company Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK). Apparently, Comcast feels as though there is another revenue stream available for HBO, and began offering an economical bundling of the iconic home of movies and original programming earlier today.
Comcast offering HBO
Presently, HBO is generally only made available to Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK) customers who opt for the high-end subscriptions that the cable giant offers. Today, Comcast looked to shake this up by reaching out to lower-end customers by offering its “Internet Plus” service. “Internet Plus” will offer 10 or more non-sports basic channels, HBO, and broadband service for $49.95 per month through the end of January.
After 12 months, the price will rise to $69.95. In a few markets, the original package is being offered at $39.95.
Streampix, which is Comcast’s Internet streaming service for movies and TV shows that competes with Netflix, Inc. (NASDAQ:NFLX), is also part of the offer.
It’s fairly clear that Comcast is looking to bring back customers who have “cut the cord” and purchased Netflix, Inc. (NASDAQ:NFLX) subscriptions while also ridding themselves of Comcast’s premium subscriptions as well as showing those unfamiliar with Streampix what it has to offer.
The deal with Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK), the largest U.S. cable company with more than 20 million video subscribers, brings HBO a step closer to being offered someday outside of a cable subscription, said Morningstar analyst Michael Corty.
“For HBO this is a test run. They are testing the waters,” Corty said.
HBO Go launch
In 2012, Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK) launched HBO Go for those that wish to use their mobile devices to view HBO wherever they might be. This service is only available to present HBO subscribers who are often paying upwards of $100 a month for their packages. HBO and Time Warner Inc (NYSE:TWX)’s top executives have maintained that the HBO Go product could one day be sold separately, but at present that isn’t economically viable.
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Either way, Comcast has provided a great way to line their coffers by presenting an option for those who aren’t at home too often or cannot justify three-figure internet/cable bundles each month. It may also offer a cheap enough option to some to stop the piracy of HBO content from other services like torrent sites.