HBO's Web-Only Service Projected To Be A Huge Hit

When HBO unveils its standalone streaming plan later this year, it won't be lacking for customers. A new survey conducted by Parks Associates found a whopping 17% of the estimated 100 million broadband households in the US as, "likely to subscribe" to the company's over-the-top (OTT) service  , one that eliminates the need for a pay TV subscription. The vast majority (91%) of these households already have a pay TV service, but cable providers should take note that Parks projects half of them as willing to drop their TV subscription once they can get HBO as a standalone service. The findings from this 10,000 household survey illustrate, at the very least, the willingness of consumers to adopt to new distribution models.

"HBO picked a good time to announce its standalone HBO Go OTT service," says Parks Associates analyst Glenn Hower. "HBO recognizes that lot of people are doing whatever it takes to watch shows like 'Game of Thrones' and they're offering an easy, legal way for viewers to do that." With CBS already offering its own web-only package and Dish's Sling TV bringing ESPN to cord-cutters, industry watchers expect more OTT services to be launched in the coming months.

While the traditional pay TV model is still extremely lucrative for content producers, TV executives have only to look at the music industry as a prime example of what happens when you resist giving customers what they want on the platforms they prefer. And this doesn't have to be a money-losing proposition. HBO's standalone service is expected to cost around $15 per month, the same amount most customers now pay for the channel as an add-on to their cable subscription.  And as much as viewers complain about high cable bills, Hower doesn't see streaming customers balking at the lack of a discount. "We've seen that a sizable number of consumers find a lot of value in premium content," he says. Citing a 2014 Nielsen report that shows viewers watch an average of just 17 out of the 189 channels they're forced to buy with their cable package, Hower says, "It's a frustrating prospect for a lot of viewers when they have to move up to a higher tier bundle just to get a single channel that they like. They may be comfortable with paying almost the same money but getting just the channels they want."