HBO to launch Netflix-like streaming service next year

Time Warner is ready to take HBO beyond cable.

The Jeff Bewkes-led media giant said Wednesday it is set to launch an HBO streaming service that will be available to every TV viewer in the country — whether or not they are a cable customer.

“We’ll go beyond the wall and launch an over-the-top product to produce hundreds of millions of dollars of additional revenue,” HBO chief Richard Plepler said during a Time Warner investor conference in New York.

The news had investors dreaming of expanded profits as they bid Time Warner shares up over 3 percent to $73.70 in heavy mid-morning trading. The move was even more dramatic than that — Time Warner shares had opened lower at $69.01, creating a nearly 7 percent jump in about 30 minutes.

The news of an aggressive HBO streaming roll-out would most affect Netflix which reports third quarter earnings after the bell Wednesday. Netflix fell as much as 3.9 percent to $432.54 in mid-morning trading.

Plepler emphasized that Time Warner’s global opportunities to roll out a streaming version of HBO would begin next year. HBO Nordic already operates free of traditional distributors.

“This is the most exciting inflection point in HBO history,” said Plepler. “Just the threat of going over-the-top gives us additional leverage.”

Plepler gave no other details of the service which would build on the existing HBO Go, which is available to those who pay for HBO via a traditional pay—TV subscription. The existing HBO service sold through cable TV distributors will remain.

The news comes amid a host of traditional players looking to build businesses online. While distributors have fought hard against streaming options which undermine their video packages, cable operators and telecom operators still benefit given that it drives broadband take-up.