HBO move should send a chill through Sky TV

There's been huge buzz in the US this morning about HBO's announcement it's going to sell its content directly to viewers over the web next year.

The channel has made a string of hit shows, from The Sopranos to the Game of Thrones; the kind of programming that people are willing to pay for.

HBO owner Time Warner told an investor day briefing that a standalone HBO video streaming service will be offered in the US, and overseas at some point over the next 12 months.

The multinational thinks it can extract more value from HBO by reaching some viewers directly over the internet. 

HBO won't be completely cutting the cord with pay TV companies. It will work with existing partners, and others.

There are a lot of unanswered questions, including what the new service will cost, and which territories will be in play.

Still, it's got to be a move that sends a chill through Sky TV [NZX: SKT].

CEO John Fellet has long talked about the threat of such "over-the-top" content plays. 

If HBO's initial foray goes well, it will push the direct streaming strategy harder. And other content makers will be encouraged to cut out the middle man and reach a paying audience directly over the web (and that doesn't necessarily mean watching on your laptop or tablet; an increasing number of cheap widgets like Apple TV and Google Chromecast let you view broadband-delivered content on a regular TV).

For the immediate future, however, Sky is well protected.

It recently renewed a multi-year NZ deal with HBO, including online rights that include Sky TV's pending Netflix-style service. That was a great coup, but will it be the last time the company can stitch up an HBO exclusive. Certainly, next time it will be even harder bargaining as HBO weighs the option of reaching paying Kiwi viewers directly.

Sky TV is also moving to shore up rights to top local sports. That's a sensible move. The likes of Netflix, Amazon Prime, Apple iTunes, Hulu and Google don't tend to focus on sport (though Google's YouTube has made some moves on Wimbledon and India cricket), let alone NZ content.

But, boy, some interesting times lie ahead.

Sky TV investors got a glimpse of the future this morning, and its a complicated landscape. 

HBO going direct to viewers over the internet will be yet another challenge traditional broadcasters don't need, but also a threat to the likes of Netflix, Quickflix and Lightbox.

It's crazy, fast-moving stuff. But perhaps there is one constant: content is king.

ckeall@nbr.co.nz

Follow @ChrisKeall