Apple-Exclusive “HBO Now” Debuts at $14.99/Month; Apple TV Price Cut to $69

Apple-Exclusive “HBO Now” Debuts at $14.99/Month; Apple TV Price Cut to $69

Time Warner Inc.’s (TWX) HBO (Home Box Office) channel has for months now teased at a stand-alone streaming service offering.  HBO is cable television’s oldest paid network channel, acitve since 1972.  Today it’s home to such popular series as Sex and the City, The Sopranos, The Wire, Entourage, Six Feet Under, Boardwalk Empire, Game of Thrones, and True Blood.  It also owns the rights to extremely popular miniseries, such as the Spielberg-produced war drama Band of Brothers.  Upcoming offerings such as True Detective and Westworld are generating substantial buzz, as well.

At its smart watch + MacBook unveil event today Apple, Inc. (AAPL) delivered a bit of a surprise, announcing that the new HBO streaming service would be Apple exclusive.

The new service is named “HBO Now.”  For those confused about how this fits in with the pre-existing “HBO Go” streaming service, recall that “HBO Go” is free, but requires a cable subscription.  By contrast HBO Now requires no preexisting subscription, making it a so-called “over the top” service.

HBO’s CEO Richard Plepler previews the new Apple-exclusive streaming service.
[Image Source: The Verge]
The new service is also expected to have more accessible content than the subscription-unlocked-but-free Go service.

HBO’s CEO Richard Plepler remarked:
We love Apple, and all the extraordinary products that capture the imagination of many people over the world… All you need to get HBO Now is a broadband connection and an Apple device…  This is a transformative moment for HBO.
The service will be available for those with an iPhone, iPad, or Apple TV. The clients are not quite ready, but will be available by April, according to HBO.  The good news is that it does appear that the service may be available for both Mac OS X users, and for users of Microsoft Corp.’s (MSFT) Windows PC OS.  Time Warner writes in its press release:
At launch, HBO NOW will be available on iOS devices and on PCs.
The subscription service is pretty pricey — $14.99 USD/month.  Still, compared to the cost of a standalone cable package it might be cheaper for those looking for legal content.  Given that some buy cable packages solely to get access to HBO shows, this could allow certain folks to cut the cable.  Apple and HBO are offering a free one month trial to those interested in the service

[Image Source: The Verge]
It’s unclear how long Apple has exclusivity on the service, but we can assume that in the next year or two it will make the leap to other platforms like Google Inc.’s (GOOG) Android OS, as well.
  Alongside the unveil of HBO Now, Tim Cook announced a price cut on the Apple TV from $99.99 USD to $69 USD.  He also revealed that Apple TV has sold a modest 25 million units to date, making it a “category leader” in his words.  That number indicates a nice pickup in sales over the 2014 season.

A third generation Apple TV set-top box
The first generation Apple TV launched launched in Jan. 2007.  In its first seven years on the market it had sold a reported 20 million units (through the end of 2013).  The latest sales figures indicate that sales have picked up since.

Roku — whose first set-top box launched in May 2008 — had sold only 8 million units through the end of 2013.

That said, the price cut makes it event that Apple isn’t entirely happy with the low sales volume and is a bit nervous about an onslaught of low-priced competitors like Roku and Google (who makes the ChromeCast products) who are vying with Apple for customer dollars in the set-top box and streaming stick niches.  Market researchers suggested rivals were outpacing Apple in volume in the sector, last year.