HBO launches independent streaming media video business next year

Time Warner's cable and satellite TV network HBO today officially announced the launch of an independent streaming video business in 2015. The impact has just released Netflix, which has just had a slightly lower-than-expected three-quarter earnings slump of 26.44%.

According to WSJ, 10 million families in the United States now have access to the Internet but have not paid for cable TV. HBO is clearly targeting this huge market. "It's time to remove all the hurdles and let the users enjoy the HBO program," says Richard Plepler, CEO of HBO. According to Re/code, HBO's streaming media business will use the freemium billing wall model, where users can watch some shows for free, but more content needs to be subscribed to. Jeff Cole of the University of Southern California said:

It was an earthquake in the television industry.

The quality of HBO's programs has always been legendary, and the current domestic audiences are familiar with the repertoire of "Game of Thrones", "Atlantic Empire" and "Silicon Valley". In addition to providing services to traditional TVs and users, HBO offers paid TV services to users via iOS, Android, Apple TV and Xbox. But they have no internet access.

The admission of HBO has left Netflix with a one-fourth drop in market capitalisation overnight. The latter's three-quarter earnings did not meet expectations (new users were less than 1 million, new pay subscribers 1.18 million, revenue grew 25%), but as their CEO Redd Hastings said, this time the user's growth was slightly lower than expected due to a rise in service charges. The bad news is not enough to scare investors into selling.

Notably, another cable giant, Comcast, is trying to buy HBO's parent, Time Warner Cable, the former board of Directors has endorsed the takeover move. But now the public and U.S. regulators are wary. Netflix is also a staunch opponent of the deal.

Streaming video business is likely to face even more fierce competition in the future, and this morning Google released the Android TV system's Nexus Player. Amazon's Instant Video business, which has overtaken Hulu and Apple TV, may further hit Netflix's hinterland after acquiring Twitch. The old giant's admission, the new giant exerting force, Netflix's good day is over?

Extended reading: To die: Netflix's stumbling path