The Long Island-based cable operator is the first pay TV provider to go along with HBO’s effort to offer its premium network to people who don’t also subscribe to an expanded basic package. The companies didn’t disclose pricing or terms. But Cablevision says it has an agreement to stream HBO Now to its Optimum Online customers.
“We are well-positioned to support HBO Now, and, as technology advances, Cablevision will continue to meet the evolving needs of our customers,” COO Kristin Dolan says.
HBO says it will launch the stand-alone streaming service sometime before April 12, when the new season of Game Of Thrones begins. Network chief Richard Plepler unveiled it this month as a $14.99 a month option for Apple TV users. Apple has a three-month exclusive period for digital-only services, but HBO said that traditional pay TV providers also could offer HBO Now from the start if they want.
But it was unclear whether cable operators would support or fight a service that could promote video cord cutting. Those who see HBO Now as a threat could, if they wanted, return fire by promoting other premium channels such as Showtime and Starz over HBO or by messing with parent company Time Warner’s Turner networks which include TNT, TBS, CNN, and Cartoon Network.
Time Warner CEO Jeff Bewkes told investors last week that while some undisclosed pay TV distributors were “on board,” others “believe it’s competitive with them and that they should have maintained their ability to be the sole place to get HBO.” He added that he expects them to “come around because it’s in their interest to take this powerful product and sell it.”
It’s fitting, in a way, that Cablevision is the first operator to team with HBO: The cable company was founded by Chuck Dolan after he created HBO, which he sold to Time Inc. before it merged with Warner Communications.
Cablevision has more up-to-date reasons for making a deal. Its systems are concentrated in the Tri-state area around New York City, where it faces intense competition from telco video providers, especially Verizon FiOS. It also faces the prospect of being dwarfed by other operators as Comcast plans to merge with Time Warner Cable and Charter prepares to expand.
What’s more, Cablevision has been a maverick on some industry issues: For example, it has endorsed a la carte pricing — which most programmers prohibit. CEO James Dolan also recently broke ranks with cable by saying that he didn’t think that the FCC’s new net neutrality rules would hurt internet investment.
In a quarterly conference call with analysts last month he hinted at a deal like the one announced today with HBO. “I don’t want to let any cats out of the bag, but I will tell you that we’re going to be very reactive to what we see, what the consumer wants,” he said. “The consumer wants their connectivity first. They’re a little less concerned with what their video packages are and some of them would prefer to save money on those. We’re going to be reactive to that and we’re going to continue to package our products so that we meet their needs and their demands. More to come, maybe the next call.”