HBO (TWX) in Talks with Apple for Launch of HBO Now
PUBLISHED ON: Mar 6, 2015
Shares of Time Warner Inc.(TWX) closed up +0.18 or +0.22 percent to $83.26 per share in Thursday's regular trading session after news that its wholly owned subsidiary, Home Box Office Inc. was in talks with Apple Inc. (AAPL) to make Apple a launch partner for the company's new streaming service which debuts next month. The new service, named "HBO Now" will be ready to launch in April coinciding with the premiere of the fifth season of the highly popular series "Game of Thrones".
New York City, New York based Time Warner Inc., formerly known as AOL Time Warner is the result of the 1990 merger of Time Inc.
HBO, which is owned by Home Box Office Inc., is an operating subsidiary of Time Warner. Time Inc. gained full control of the company in September of 1973 and was subsequently merged with Warner Communications in 1990. HBO is the longest continually operating pay cable TV service in the United States, having begun operations in November of 1972.
Time Warner expects to market HBO's new "HBO Now" streaming service to more than 10 million broadcast subscribers that do not currently pay for a cable TV package. An additional 70 million potential customers that subscribe to cable but do not currently receive HBO in their subscriptions.
The launch of HBO Now will be the first time that subscribers will be able to purchase HBO without going through a traditional cable TV or satellite provider such as Comcast or Verizon. The subscription is expected to be $15 per month, the same price for HBO that a cable provider would charge.
The ongoing talks with Apple Inc. will have Apple TV become a launch partner for HBO's new stand alone service, joining other distributors such as Xbox, Playstation, Roku and Amazon. Apple TV already carries another HBO service, HBO Go for its current subscribers and has spent several years in negotiation for the rights to offer its own TV package.
HBO has still not confirmed a launch date for the new service, but is expected to coincide with the premiere of the fifth season of "Game of Thrones" which will be on April 12th. The company wants to make sure that the service runs properly and without the glitches which its HBO Go service suffered during its debut last year.
Investors have decided to wait until the market opening to voice their opinion, with Time Warner stock unchanged in this morning's premarket. Nevertheless, Deutsche Bank today began covering the stock and has given the stock a "buy" rating with a $100 per share price target.
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