By Sahil Patel
HBO is moving forward with its plans to launch a standalone over-the-top video service in 2015 — but instead of building the product in house, the company has decided to enlist the help of an external party.
According to reports from The Wall Street Journal and Fortune, HBO is partnering with MLB Advanced Media to build the video service. Fortune’s report indicates that HBO plans to launch the service by the start of the next season of “Game of Thrones,” which begins in April.
MLB Advanced Media has plenty of experience working with major content providers to stream their video content online. The MLB subsidiary currently supports streaming services for its parent company as well as ESPN and the WWE Network.
UPDATE: HBO CTO Otto Berkes has resigned from his post following the company’s decision to partner with MLB Advanced Media. In a memo, Berkes said: “This is a change in direction from what I planned with HBO and the approach will not utilize my overall capabilities.” He had come to the cable network from Microsoft, where he was one of the original creators of the Xbox.
There are still some questions about how HBO’s standalone option will function — especially as it pertains to the content it would offer to potential subscribers. A launch targeted to coincide with the season premiere of its biggest (and certainly most pirated) show suggests that HBO’s standalone option won’t delay access to content that HBO TV subscribers have.
The bigger question, perhaps, has been how HBO would build and sell such a service, when historically it hasn’t had to handle the infrastructure required to sell a product directly to customers.
Jeff Bewkes, CEO of HBO parent Time Warner, speaking at UBS’ investor conference in New York on Tuesday, outlined in broad terms how HBO could pursue its over-the-top strategy.
One option would be to partner with existing broadband companies to sell HBO as an add-on option to existing packages — this way, the broadband providers, many of whom are also TV distributors, would still support HBO in marketing, billing, and other infrastructure-related systems. Another option is to sell HBO via new distributors, like Amazon, which the network has a licensing agreement with. The third option is to go completely direct to consumers, which would allow HBO to keep all of the subscription revenue.
By partnering with MLB Advanced Media, it appears HBO is leaning toward option three, though that’s pure speculation and not something confirmed or even suggested by Bewkes.