HBO offers streaming service as viewers shift to TV à la carte

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    If you have been looking for a reason to cut the cord to your traditional cable TV, HBO may have just provided it.

    The longtime cable giant, producer of shows like "Game of Thrones" and "True Detective," fired a big shot across the media landscape yesterday when it announced it will offer a stand-alone online streaming service next year.

    Then today, CBS, home to audience favorites like "The Good Wife," announced a smaller, but similar move of its own. For about $6 a month, viewers will be able to stream CBS stations live in 14 markets. Live sports, however, are not included.

    It's an important moment for the industry.

    Sharon Waxman is the editor in chief of TheWrap.Com. It's a news website that covers the business.

    Sharon Waxman, welcome.

    So, how important a moment is this?

  • SHARON WAXMAN, TheWrap.Com:

    I think it's one of those pivotal moments where you have HBO, CBS both announcing streaming services.

    And there was another streaming service announced on Sunday. Starz, a smaller premium cable network, announced an international streaming last Sunday, which kind of slipped under the radar, and all of this at the same time as Netflix announced their earnings this is week, which is, of course, the biggest streaming service out there, and their growth has kind of slowed, which is to be expected because they have become this massive company, and their shares took a big hit.

    So, clearly, there's going to be important new entrants, important new entrants to the streaming marketplace, and they all seem to be these legacy content creators.


    So, why are they doing this and why right now?


    Well, I think they have resisted coming to the digital revolution and adopting — I mean, to back up, look, any one of these companies, the big media companies probably should have bought Netflix five or six or seven years ago, when that company was able to be bought. And none of them chose to do that.

    And that was a discussion that was had within Hollywood at that time. And there was a certain presumption that things are going to change a bit, but they're not going to fundamentally alter the business models that drive the way people consume entertainment.

    Well, guess what? Netflix showed, with its explosive growth over the past three years, that, in fact, people are changing the way they consume entertainment. And particularly young people, millennials, right, kids in their 20s, are not subscribing to cable. They are not cord-cutters. They are cord-nevers.



    They don't ever — if they use HBO Go now, they're probably using their parents' subscription number to access it. So, HBO is, I think very smartly, looking at that market, knowing it's going to grow, and saying, we need to make those people our customers somehow.


    So, sports, as we said, live sports not included, but is this the beginning of the end of cable television?


    I think — well, you know, we have announced the beginning of the end of a lot of things here in media, and it's turned out to be premature in almost every case.

    What we're seeing is a variety, is a fragmentation, is more diversity of ways to consume content on the media landscape. So I don't think it's the end of cable by any means, which is a massive part of the country, and most people are still going to be having cable subscriptions for a really long time.

    But I do think that it's a significant moment, where we're starting — where you have the main content-creating companies CBS, HBO, which is part of Time Warner — Showtime is also looking at this, which, of course, is owned by the CBS, Starz — are starting to understand that they have to start monetizing their content directly through digital, and not just selling is through via Netflix or even through Hulu, which is — of which FOX and NBC are owners. But it's a streaming company that again is an intermediary, and not a direct — not them directly providing their content to consumers.


    So, just quickly, less than 30 seconds, what do you think the main changes are going to be for consumers?


    I think, again, it's going to be a diversity of choices. They're going to have a broad array of choices.

    They can decide whether they're going to go a la carte on cable, whether they're going to get a great big cable package, or they're just going to have their laptop and a device that is going to push it to their big screen TV, because there's lots of different ways to do that now, and just choose individually what their entertainment choices are going to be.

    And, increasingly, I think the a la carte way is where people are going to be getting their entertainment, and not just embracing a single model, a single cable package. That's where I think we're going.


    Sharon Waxman with, we thank you.


    Thanks, Judy.

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