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Thursday, February 18, 2010

HBO introduces online streaming

The cable network is making its movies available to subscribers online. Will this hurt Netflix?

Home theater © Frare/Davis Photography/CorbisHBO has taken a page right out of Netflix's (NFLX) business model with the introduction of HBO Go, its new video-streaming service.

Here's how it works: HBO subscribers can go online and watch the same movies HBO offers on its cable networks. And -- at least for now -- the service will be free.

But HBO Go is only for the 38 million subscribers to HBO or Cinemax, according to CNET. If you don't pay for the cable channels, you won't get online access.

This is similar to the way Netflix offers on-demand video streaming for its customers. Netflix has long considered this to be its future business model; mailing DVDs to customers is just a way to get it there.

Will HBO Go be a "go" for consumers? CNET's Greg Sandoval wonders why the cable channel would even bother.

A huge part of Netflix's appeal is lower-cost video entertainment. Cable subscribers can jump to Netflix and pay just $10 a month to watch DVDs mailed to their home or the movies that Netflix streams over the Web.

But at least HBO will likely have newer titles than Netflix. So far, Netflix's on-demand offerings have been a bit lackluster. The company is trying to change that, and recently agreed to delay Time Warner new releases for nearly a month in return for better titles on its streaming service.