Oct 25 Comcast Corp customers will soon be able to buy premium movie and TV channel HBO and its HBO Go online service in a pared-down basic cable package that includes about 10 channels plus Internet access, for an introductory price of about $50 a month.
The new offer, which is publicized on Comcast's website, is a chance for Time Warner-owned HBO to reach subscribers who felt they could not afford the channel before. Until now, HBO was generally marketed to customers who buy the priciest TV packages through their cable company.
Comcast's website said the "Internet Plus" offer, which ends on Jan. 31, provides 10 or more non-sports basic channels, including local broadcast and government channels, along with broadband service. After 12 months, the price rises to $69.95 a month. In some markets, the base price for the first year is as low as $40, Comcast said.
Streampix, which is Comcast's Internet streaming service for movies and TV shows that competes with Netflix, is also part of the offer.
The deal with Comcast, the largest U.S. cable company, with more than 20 million video subscribers, brings HBO a step closer to being some one day outside of a cable subscription, said Morningstar analyst Michael Corty.
"For HBO this is a test run. They are testing the waters," Corty said.
HBO launched HBO Go in 2010 to let subscribers view its shows over the Internet on devices such as Apple Inc's iPads, at a time when consumers were flocking to online streaming services such as Netflix Inc.
HBO Go has about 6.5 million registered users, compared with more than 100 million for HBO's main service globally.
However, HBO Go is only accessible to viewers who pay for cable TV service, plus an extra fee for HBO. Until now, that meant monthly bills of $100 or more typically for people who want to use HBO Go. Comcast's package would be the cheapest way so far to get access to the service.
HBO and Time Warner's top executives have maintained that the HBO Go product could one day be sold separately but that currently the economics do not make sense, with cable operators providing a large chunk of the network's profit and revenue.
HBO is a money maker for Time Warner. It generated $4.5 billion in revenue in 2012, according to Gabelli & Co analyst Brett Harriss.