HBO to offer standalone streaming service…. to Nordic countries

 brace yourself hbo

HBO has been adamant about keeping its online subscriptions of HBO restricted to TV-subscribers, much to the non-TV subscriber’s dismay. Now, for the first time, HBO will be launching an online subscription service that will not require a cable subscription to HBO, reports Variety. Frustratingly for U.S. fans, it will be restricted to Nordic countries.

In Stolkholm on Thursday, HBO announced that viewers in Sweden, Norway, Finland and Denmark will be the first countries where “HBO Nordic AB” will be made available with month-to-month online streaming. The service will cost less than 10 euros per month, and launch in mid-October. For those of us who have been waiting for a standalone HBO streaming service to arrive in the West, we shouldn’t get our hopes up anytime soon. HBO has indicated that it has no intention of offering the same service to other countries.

“Each market is unique and HBO approaches each one with what we consider to believe the best business model specific to that territory,” an HBO spokesperson explained during the press conference.

But HBO’s shift and interest in offering its streaming service as a standalone product signals the first significant move in online streaming by HBO, which faces increased competition from Netflix. In 2010, Time Warner’s CEO, Jeff Bewkes, retorted that Netflix’s dominance in the TV space was as likely as the Albanian army taking over the world. As a rebuttal to Bewke’s statement, Netflix CEO Reed Hastings quipped yesterday on his Facebook page, “Excited to see HBO join us in offering standalone streaming service in Scandinavia…what about the USA? We thought the first match-up would be in Albania.”

HBO’s Nordic streaming news was announced only 24 hours after Netflix had revealed its plans to launch its service to the Nordic countries.

The motive behind HBO’s decision in the Noridic countries (and not the United States) is a complicated one. In the U.S., HBO is bound by lucrative contracts with cable providers that prevent the company from releasing a product that competes directly with Big Cable’s business. And despite all the talk about TV fans cutting ties with cable, statistics show that the number of cord cutters is likely too low to compel HBO to consider offering its HBO Go app, which requires users have a cable subscription, as a standalone streaming service. According to a Nielsen study, only 4.5 percent of television-owning homes have chosen streaming over cable. (Note that this study didn’t include homes without televisions.) On top of this, in the fourth quarter of 2011, 98 percent of viewing television was done on traditional television. Neilsen also found that only 1.5 million households in the United States cut the cord in 2011.

Streaming is, however, steadily growing as a substitute to watching television. The number of homes with free broadcast television and a broadband Internet connection has increased by 22.8 percent within the last year. We wouldn’t be surprised if in the future, HBO is compelled change their strategy in the United States. Until then, for those of outside of the Nordic countries, we’ll be forced to stick to our HBO subscription, or other means of watching our favorite HBO shows.