HBO Go on Roku - a shot across the bow

In one of the more curious developments in over-the-top, HBO Go, HBO's "TV Everywhere" service, which allows HBO subscribers to view many of the service's programs on their phones and tablets will now be available on TV -- specifically, TVs connected to Roku boxes.

It is not a surprise that the software could be successfully ported to the Roku box. Roku is the most open off all the over-the-top platforms and most over-the-top services are available on it (e.g., Netflix, Amazon Prime and VOD, MLB.TV).

What is surprising is that HBO chose to make it available on Roku. HBO has embraced TV Everywhere, not unwisely, as a means to increase the value of the service to its distributors. Go is not available at all to those without a subscription to HBO via a cable, satellite or telco multichannel TV distributor.

So, if you have to have an HBO "TV subscription" to get Go, why would you need it on the Roku? Isn't it already available on the TV already?

Here's three not-entirely-different use cases that come to mind:

1. Roku is connected to a TV in your home which does not have a cable box.
2. Roku is connected to a TV in your vacation home which has Internet access, but not a multichannel subscription.
3. Roku is connected to a TV in a friend's home which allows you to "share" the subscription.

There may be more (keep the Roku in your suitcase, connect it to a TV when you travel -- if you have access to the inputs on the back of a TV in a hotel).

What is striking to me about this list is that none of these are particularly attractive developments if you are an incumbent multichannel distributor, you know, HBO's primary/only customers.

1. is creating competition for the sale of an additional set-top box in the home.
2. creates an alternative to a multichannel subscription in the vacation home and
3. creates the same alternative for your friend.

What this suggests is that HBO is planning for the day that it can bypass the distributor and establish a direct retail relationship with its customers, like, say, Netflix. A direct relationship would provide HBO with a few obvious benefits.  If HBO retails its service, it has no need to split the retail price with the distributor. If HBO has a direct path to customers, like a broadcaster, it has increased leverage with the distributor in a renewal negotiation. 

More importantly, to my eye is that with a direct customer relationship HBO can get out of being packaged as an "add on" to an increasingly expensive basic cable package. (While it is theoretically possible for a customer to buy the broadcast level of multichannel television service and HBO and skip the expanded basic tier -- requiring a buy through of expanded basic is illegal -- as a practical matter no distributor makes this option particularly easy to buy.) It is a well known fact that each year when basic cable rates go up, many customers "manage" their cable bills by dropping or cutting back on premium services like HBO.

That HBO Go might be the path away from the multichannel distributor is not a new idea. Jeff Bewkes, the CEO of HBO's parent company Time Warner floated this very concept last December. If HBO were primarily interested in supporting distributors' TV Everywhere efforts, it would make it programming available through the distributors' TV Everywhere apps and websites, which, it does not.

To me, that looks like a shot across the bow.

Update (14 October 2011): Colin Dixon of The Diffusion Group makes a good point about another way that  HBO Go on Roku is a shot across the bow of the cable industry. Having your own app is a way of presenting your brand the way that you want it to be seen, instead of being limited by the distributors' hardware limitations and software development.