Comcast to offer HBO in basic TV package

Reuters

By Liana B. Baker

Oct 25 (Reuters) - Comcast Corp customers willsoon be able to buy premium movie and TV channel HBO and its HBOGo online service in a pared-down basic cable package thatincludes about 10 channels plus Internet access, for anintroductory price of about $50 a month.

The new offer, which is publicized on Comcast's website, isa chance for Time Warner-owned HBO to reach subscriberswho felt they could not afford the channel before. Until now,HBO was generally marketed to customers who buy the priciest TVpackages through their cable company.

Comcast's website said the "Internet Plus" offer, which endson Jan. 31, provides 10 or more non-sports basic channels,including local broadcast and government channels, along withbroadband service. After 12 months, the price rises to $69.95 amonth. In some markets, the base price for the first year is aslow as $40, Comcast said.

Streampix, which is Comcast's Internet streaming service for movies and TV shows that competes with Netflix, isalso part of the offer.

The deal with Comcast, the largest U.S. cable company, withmore than 20 million video subscribers, brings HBO a step closerto being some one day outside of a cable subscription, saidMorningstar analyst Michael Corty.

"For HBO this is a test run. They are testing the waters,"Corty said.

HBO launched HBO Go in 2010 to let subscribers view itsshows over the Internet on devices such as Apple Inc's iPads, at a time when consumers were flocking to onlinestreaming services such as Netflix Inc.

HBO Go has about 6.5 million registered users, compared withmore than 100 million for HBO's main service globally.

However, HBO Go is only accessible to viewers who pay forcable TV service, plus an extra fee for HBO. Until now, thatmeant monthly bills of $100 or more typically for people whowant to use HBO Go. Comcast's package would be the cheapest wayso far to get access to the service.

HBO and Time Warner's top executives have maintained thatthe HBO Go product could one day be sold separately but thatcurrently the economics do not make sense, with cable operatorsproviding a large chunk of the network's profit and revenue.

HBO is a money maker for Time Warner. It generated $4.5billion in revenue in 2012, according to Gabelli & Co analystBrett Harriss.

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