Other channels have followed suit. Showtime, perhaps the network most traditionally viewed as HBO’s rival, rolled out its “Showtime Anytime” app just over a year ago. At present, it’s a bit less polished than HBO GO, but it continues to improve.
Of course, the premium networks aren’t the only ones getting in on the fun. truTV, for example, offers truTV 2 Go, while the History Channel has an iPad app. In time, it seems like that most networks will embrace the app model, rolling out HBO GO-equivalents of their own.
What’s the point of the cable provider?
So if channels embrace the app model, and Netflix, Inc. (NASDAQ:NFLX) can demonstrate that it’s more profitable to sell directly to consumers, where does that leave the cable providers?
Certainly, the switch isn’t likely to happen overnight, but a move away from channels and toward Internet apps will make the cable providers little more than superfluous middlemen. Some cable providers — like Comcast Corporation (NASDAQ:CMCSA) — should be well-insulated from this shift. In addition to its cable operation, Comcast Corporation (NASDAQ:CMCSA) is the largest provider of high-speed Internet access in the US as well as the owner of a major network, NBC.
But others, particularly the satellite companies, seem to be heavily exposed. Perhaps this is why DISH Network Corp (NASDAQ:DISH) recently put in a bid to acquire Sprint. While DISH provides Internet, it’s not a major player in the industry.
Except for consumers in rural areas, rival high-speed Internet services are often a better deal than DISH Network Corp (NASDAQ:DISH). Comparatively priced plans from Comcast offer faster speeds and significantly greater download caps — a moderately priced plan from DISH caps the user at only 20 GB of data per month, Comcast Corporation (NASDAQ:CMCSA)’s plan caps out at over 250 GB.
The bulk of DISH’s business, then, remains in providing satellite TV. If apps delivered over the Internet are the future, DISH Network Corp (NASDAQ:DISH) is certainly in trouble. However, if it were to acquire Sprint, it might be able to leverage Sprint’s wireless networks to become a stronger player in the Internet game.
Cutting the cord
Ultimately, cord-cutting seems inevitable, though it will certainly take time. At the center of the shift is an emerging battle between Netflix, Inc. (NASDAQ:NFLX) and HBO. In time, more networks are likely to copy HBO’s HBO GO app, and will opt to sell these apps directly to consumers at some point in the future. This will undermine the business of most cable TV providers, particularly those that aren’t well diversified.
The article Netflix’s Battle with HBO Could Change TV Forever originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.
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