retail news in context, analysis with attitude

by Kevin Coupe

It is of ongoing interest to me when companies decide to color outside the lines of their own businesses, challenging traditions and even taking bites out of hamburgers made from sacred cows.

Which is exactly what happened this week when HBO announced the details of the video streaming service it is about to launch, linking with Apple to initiate the new product. The move, the New York Times writes, serves to unite "two premium brands from the media and technology worlds in a quest to reinvent the way people watch television ... Called 'HBO Now,' the service does not require a traditional TV subscription and will be available exclusively on Apple devices when it makes its debut in early April."

Essentially, what HBO is doing is acknowledging a major shift in consumer behavior away from watching on TV sets hooked up to cable outlets, and toward watching on computers, tablets and other mobile devices - a recognition that has compelled companies like Amazon and Netflix to adjust their own business models.

According to the Times, "The new service is part of a growing wave of offerings this year from media, telecom and technology companies. Dish Network, the satellite provider, recently unveiled a new web-based service that includes ESPN and several other popular networks for $20 a month. CBS and Sony also are starting Internet-only subscription plans.

"The companies are fighting to stay relevant to a generation of so-called cord-cutters or cord-nevers, who pay for Internet access but not traditional TV subscriptions. As its target audience for HBO Now, the network has pointed to the 10 million homes in the United States with web service but no traditional cable or satellite television subscriptions — half of which are estimated to subscribe to a streaming service."

The story goes on to note that "the service will cost $14.99 a month and offer all of HBO’s original programming, past and present, as well as its movie offerings. People who subscribe to the service in April through Apple will receive the first month free ... The exclusivity with Apple lasts for three months. HBO also is in talks with other distributors, including traditional TV providers and digital partners."

The argument here is very simple. The people who are cutting the cord from traditional cable or satellite TV services are almost genetically bred to look for every opportunity to cut the cords that bind traditional consumers to traditional businesses. It would be a mistake - even foolhardy - to think that this compulsion won't impact every part of their consumption experience.

It seems to me that however you are doing business today, you'll be doing it differently - fundamentally differently - in five years time. Maybe sooner.

Consider this an Eye-Opener. A Wake-Up Call. Or whatever it takes.
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