Sign up to receive our
daily summary of tech news for free.

HBO CEO Richard Plepler. Photo by Bloomberg.
Media/Telecom

HBO’s Online Pricing Trap

Photo: HBO CEO Richard Plepler. Photo by Bloomberg.

HBO’s broadband service looks doomed even before it starts.

While HBO hasn’t disclosed details, pricing of the new broadband offering most likely won’t be less than HBO’s pay TV retail price of around $15 a month, according to a person familiar with the situation. That’s $6 more than the price of Netflix’s most popular plan and a price that will likely drastically limit demand for the new service.

HBO, of course, wants to avoid undercutting its pay TV version with a cheaper offering while at the same time appealing to a group of consumers it isn’t now reaching. But at $15 a month, HBO is likely to fail at both objectives.

It will be too expensive for many people, many of whom are used to cheaper offerings from the likes of Netflix. A recent survey of broadband-only consumers by the Diffusion Group found that only 6% were moderately or highly likely to sign up for a broadband HBO service priced at $15, while 65% to varying degrees were unlikely to do so.

But as expensive as it is, the new offering won’t help HBO protect the pay TV ecosystem. Even a high priced standalone service adds to a growing array of such offerings that over time could make it easier for people to disconnect.

As Netflix CEO Reed Hastings said in an interview with The Information, how HBO will price the service is “a tricky issue for them.”

Get access to exclusive coverage
Read deeply reported stories from the largest newsroom in tech.
Latest Articles
 
The Briefing Semiconductors Policy
A New Chip King: The Information’s Tech Briefing

The tech industry saw a symbolic passing of the baton on Thursday, as the market capitalization of Nvidia—the top maker of chips for artificial intelligence projects—surpassed that of Intel, long Silicon Valley’s most dominant chip provider, for the first time, reported Reuters.

The shift underscores the strategic importance many companies are placing on AI, and how investors ...

Latest Briefs
 
Google Seeks Ways To Avoid EU Antitrust Investigation of Fitbit Acquisition
Behind the Amazon-Zoox Deal: a Walk-Away Clause
Nvidia Overtakes Intel as Most Valuable Chip Maker
Stay in the know
Receive a summary of the day's top tech news—distilled into one email.
Access on the go
View stories on our mobile app and tune into our weekly podcast.
Join live video Q&A’s
Deep-dive into topics like startups and autonomous vehicles with our top reporters and other executives.
Enjoy a clutter-free experience
Read without any banner ads.
Exclusive Economy COVID-19
Under Armour Seeks Buyer for MyFitnessPal App
A few years ago, Under Armour made a splashy entrance into the burgeoning market for digital fitness apps with a series of acquisitions.
Org Charts Facebook
The People With the Power at Facebook After Chris Cox’s Return
In Facebook’s upper ranks, what’s old is new again. That’s because Chris Cox, one of Facebook’s most senior executives, recently returned as chief product officer, reporting to CEO Mark Zuckerberg, after a yearlong hiatus.
Exclusive Media/Telecom Entertainment
Microsoft Expresses Interest in Acquiring Warner Game Unit
Microsoft has expressed interest in acquiring the games division of Warner Bros., the publisher behind popular game franchises based on Batman, Harry Potter and other characters, according to two people familiar with the situation.
The Takeaway Venture Capital
The Tech and Media Culture War That Isn’t
Reporters, tech investors and executives like to think they are at the center of the world. And this week, based on conversations on Twitter, it briefly felt like they were.
Google Facebook
Facebook, Google Ad Market Rebounds From April Bottom
Digital advertising, the main source of revenue for Facebook and Google, just finished one of its most difficult three-month stretches ever.
Startups to Watch Venture Capital Startups
How Five Startups Responded to Economic Upheaval
The coronavirus pandemic has disrupted the tech startup landscape, driving some companies out of business and pushing others to the brink.