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Comcast To Offer
Comcast To Offer 'Internet Plus' with HBO

By Jennifer LeClaire
October 25, 2013 3:36PM

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Cord-cutters who don't want to be tied to expensive cable TV or other wired services are taking note of new services that enable them to enjoy TV Everywhere, in addition to Internet. Comcast's new "Internet Plus" targets this market of consumers looking for relatively low-cost access to Internet and entertainment TV, using HBO shows as a lure.

There's a surprising amount of buzz about Comcast taking steps toward unbundling HBO. The cable operator is officially promoting a new service in the U.S. called “Internet Plus.” For roughly $40 a month, depending on your location, consumers can get a limited number of local TV channels, broadband Internet access, and, yes, popular HBO cable TV programs.

The new package is being viewed as noteworthy because it's the first time HBO is being offered as part of a relatively low-cost package. Industry watchers suggest that Comcast is using HBO and its popular programs like Game of Thrones, Boardwalk Empire, and Girls to attract a broader user base for its Internet services.

As the line continues to blur between Internet access providers and cable TV providers, industry watchers also predict we'll see more changes like this, with the competition heating up in the "TV Everywhere" market.

Netflix, for its part, is reporting strong financial results thanks primarily to its streaming video and DVD service that enable viewers to watch what they want, when they want it. At the same time, AT&T recently moved to make more live programming available through its U-verse app on mobile devices.

Are Netflix Partnerships Next?

We turned to Ross Rubin, principal analyst at Reticle Research, to get his thoughts on the long-awaited market shift. He told us much of Netflix’s programming is competing with shows that cable operators have offered through their own on-demand offerings. That’s one reason why the cable operators haven’t been in a big hurry to partner with Netflix. But that could change.

“As Netflix begins to invest more in its original content, it becomes more of a differentiated offering, like HBO or Showtime, with franchises [and series] that consumers want access to,” Rubin said. “Pay TV providers want to own the user experience. And if Netflix is partnering with the pay TV operator and can offer some revenue share, it helps address this issue of bandwidth throttling.”

True TV Everywhere

As Rubin sees it, pay TV operators have a strong incentive to make a sanctioned service into a high-quality streaming experience. So whereas Netflix has been competing with TV Everywhere offerings that Comcast, Time Warner and other cable providers are pursuing, Netflix may find an open door.

That’s especially true with smaller operators looking to tap into Netflix's brand recognition and the investment the company is making in original programming and content acquisition.

“It’s very expensive and time consuming to build the kinds of services Netflix has established,” Rubin said. “Netflix has probably done a better job than any other service of being integrated into all manner of devices. That’s just one of the expenses that cable operators have to consider when they launch a TV everywhere offering.”

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