Is HBO finally considering decoupling HBO GO from a TV subscription?

HBO GO, Boardwalk Empire

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The pay TV content space is getting weird. Weird and competitive.

Earlier this year, all-you-can-eat content provider Netflix debuted its Kevin Spacey-helmed House of Cards series, which they were able to lure from HBO and Showtime, the traditional home for uncensored high quality dramas. And now, perhaps in response to the Netflix bid, HBO is reportedly finally toying with the concept of decoupling their popular HBO GO Internet service from the traditional cable subscription.

HBO GO debuted in 2010 and allows consumers to blow through episode after episode of original programming such as The Sopranos, The Wire, Boardwalk Empire, and many other cult faves. HBO GO users can access content via a laptop, tablet, phone, through a gaming console, or other streaming devices. The service has 6.5 million registered users versus 29 million for HBO as a whole.

Sounds like a good product tailored to the way people consume entertainment today! The only problem with HBO GO is that it is only available to those who are already signed-up with a cable account and have a paid HBO subscription. Increasingly, consumers are dropping traditional cable packages to rely solely on subscription services like Netflix or a la carte services like Amazon Instant Video.

According to the Convergence Online report "The Battle for the North American Couch Potato: Bundling, TV, Internet, Telephone, Wireless," (PDF here) "2.65 million (2.6%) US TV subscribers cut their TV subscriptions 2008-11 to rely solely on Online, Netflix, OTA, etc, 1.05 million (1%) in 2011 alone." Consumers are cord cutting like never before.

But consumers still want direct access to HBO content on their own terms, but aren't necessarily willing to buy monthly cable subscription full of channels they will never watch or to purchase episodes at inflated prices through services like iTunes (where, for example, a single episode of Boardwalk Empire is currently $3.99, or $47 for an entire season).

At the recent premiere of the third season of HBO's hit show Game of Thrones, Reuters reports that HBO's CEO Richard Plepler commented that the company might team up with broadband internet companies to provide content to the growing number of consumers who do not have a traditional cable package. Stating that "maybe HBO GO, with our broadband partners, could evolve."

This isn't the first hint that there is at least a discussion within the HBO ranks about giving consumers direct access to GO. When Plepler spoke at a New Republic event in late January, as reported by The WSJ, he stated that that while it doesn't make sense for the company to alienate its cable partners and the "billions and billions of dollars in revenue that are part of our distribution landscape," but that "doesn’t mean we are not mindful that the problem exists."

He went on to elaborate that the company is considering decoupling options, which would likely include talks with cable providers who are often Internet providers as well. "Every day there are people now thinking about what are the variations on the theme. How can we work with our partners to do that? Is there a broadband-only play, with HBO GO, with our partners, that might be appealing?”

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