DirecTV’s HBO Contract Indicates It Could Sell Standalone HBO Go

(Ángel Raúl Ravelo Rodríguez)

There are several mysteries surrounding the impending 2015 launch of HBO’s standalone streaming video service: Will it be the same as HBO Go? What will it cost? Do I have to buy it through my cable company? HBO hasn’t given any answers to these questions, but recent news about the network’s contract with DirecTV appears to indicate that even the satellite services may be selling the service.

Buried in this Wall Street Journal story on a clause in HBO’s contract with DirecTV is a mention that “DirecTV would immediately get the right to offer HBO’s streaming product” if the premium cable network can sign up more than 450,000 online subscribers nationwide (or 300,000 in any one market).

As DirecTV doesn’t currently offer its own broadband service, that seems to indicate that the satellite company would use its customer service and billing departments as a storefront for HBO.

This meshes with a November statement by HBO CEO Richard Plepler, who brushed off concerns that a standalone HBO Go would cannibalize its cable customers.

“There is gold in the hills, lets go get it together,” explained Plepler, hinting that the cable companies who also provide most of the terrestrial broadband service in the U.S. would get a cut of the monthly fees for the streaming service.

But DirecTV poses a different issue, as there is no immediately apparent incentive for a customer to get a streaming service from a company that can’t currently carry that stream. That may all change if DirecTV’s merger with AT&T is successful, but even if that deal is approved it could be quite some time until DirecTV is able to offer any broadband service to many of its more than 20 million customers.

The Journal story that includes the detail about DirecTV being able to sell HBO’s streaming service primarily focuses on a clause that would allow the satellite company to scale back its marketing of HBO if that 450K subscriber number threshold is crossed.

While that does seem like a clause intended to penalize HBO for possibly siphoning off pay-TV customers, it doesn’t make much sense why DirecTV would want to stop marketing a product that it makes money from. And with the two other big players in premium cable — Showtime and Starz — also looking to launch standalone services, it’s not like DirecTV would benefit by shifting its marketing to either of these networks.

HBO’s contract with DirecTV ends next year, and the streaming issue will undoubtedly be a major part of the negotiations for a new deal.

by Chris Morran via Consumerist