HBO has been offering an online stream to some cable subscribers only through their cable operator. In a recent statement HBO’s chair made it clear that it intends to keep things that way.

Time Warner Inc.’s pay-television channel, home to shows including the “The Sopranos” and “True Blood,” holds cable and Internet rights to films from Warner Bros., Twentieth Century Fox and Universal Pictures and is unlikely to make a deal with Netflix, HBO Co-President Eric Kessler said.

“There is value in exclusivity,” Kessler said in an interview. Consumers “are willing to pay a premium for high quality, exclusive content,” he said.  (Bloomberg)

In other words, don’t look for HBO’s programming on Netflix or any other non-cable operator any time in the foreseeable future.

That’s very short sighted. There is no rule that states HBO has to be offered as part of a catch all package. In fact, it could easily be added as a service tier to Netflix, Hulu, Clicker, or even as a stand alone HBO offering. The fastest growing audience is cable cutters, not subscribers. Cable cutters are no longer willing to pay $30-$40 per month just to have access to HBO for another $10 or $20. Many may just be willing to pony up a ten spot or more for HBO via a stream they can access from any broadband connection. In fact, Mr Kessler, that is the future of content distribution. Not catering to cable cutters is already eroding your shareholders’ value. Even if you won’t listen to potential customers. sooner or later, you’ll have to listen to them.

If you’ve been with us for long, you already know we think services like Netflix are the future of pay TV. Two news items today are beginning to make it look like the future is here.  With growth of a million subscribers  at an increased profit and 61% of them streaming their selections the end of cable tv as we know it has begun.

There’s plenty of room for more players, and they’re already in the game to some extent.  The others are Hulu, Amazon, Apple, Youtube and more. The glaring absence remains in the cable channels themselves and programming distributors. The cable guys and Verizon still have some big bandwitdh potential in their dumb pipes. AT&T and the satellite guys are likely to suffer the most.

The battle between traditional broadcast and cable and the Internet continues to intensify with news from Netflix. Soon, the online entertainment services customers will have access to new movies from Relativity at the same time the content is made available to premium channels like HBO.  Netflix already offers some current content from Starz concurrently with the networks cable play and subscribers have access to a live Starz feed. For $8.99 a month this could be trouble for premium channels like HBO and Showtime that cost more than $8.99 in addition to basic cable fees.

The deal announced Tuesday with film financier Relativity Media LLC adds to a batch of newer movies from The Walt Disney Co. and Sony Corp. that can be watched online through Netflix’ 2-year-old deal with Starz Entertainment LLC on a service called Starz Play.

Among the first films in the deal are “The Fighter,” starring Christian Bale, Mark Wahlberg and Amy Adams, and “Season of the Witch,” starring Nicolas Cage. The films are set to hit theaters later this year.

With new movies from Relativity available early next year, about one-fifth of the rental movie chain’s 100,000 movie and TV show titles can now be streamed online. (Yahoo)

The next questions is: Will HBO and Showtine see the light soon enough to jump on the TVoIP bandwagon or will the be displaced by upstarts. This brings us even closer to the time when subscribers will demand bigger pipes from a protected duopoly  that competes directly with web based services.

It could be the tipping point for the broadcast, cable and satellite businesses as we currently know them. While the cable industry worked hard to get everyone to buy into it’s TV Anywhere concept, the real growth has come in the form of streaming devices like Roku’s little internet stream box. With Google’s Google TV announcement earlier this week, followed by the Apple rumor mill ballyhooing a fruit cult stream box this could be there year net video will take control of the big screen.

With so much video m0ving across the net, consumers should start demanding bigger pipes to better carry HD streams. With the duopoly’s myopic focus almost entirely on wireless, it’s a great opening for new competition. Now, if we could just re-open the last mile……..

With cable and satellite subs flat and the telcos struggling to grow a pay TV business, online video is thriving - even the pay subscription kind. The cable guys and telcos can blame the recession, but there’s still business to be had if you give people what they want: a movie anywhere there is an internet connection for $9 a month. The combination of online viewing with a DVD in the mail, Netflix managed to grow its customer base by more than 1 million in the last quarter. If the movie studios would allow, the DVD could be done away with all together.

The results reflect the growing popularity of Netflix plans that bundle DVD rentals with unlimited video streaming over the Internet for as little as $9 per month. Netflix’s success contrasts sharply with more traditional home video options such as Blockbuster Inc. and Movie Gallery, which are closing hundreds of their stores and struggling to attract traffic to the locations still open.

Netflix added more than 1.1 million customers during the quarter — the most in any three-month period in its history. It took Netflix four years to attract its first 1 million subscribers after launching its rental service in 1999. (Yahoo)

We keep hearing Apple wants to add a subscriber model to its iTunes walled garden with the video content as its main feature. Apparently, network TV suits aren’t buying the idea. With an open internet to peddle shows  on as well as free to air, what do the networks need with what amounts to a cable operator delivering content via the very same Internet? If Apple can conjure up yet another cute device like the iPhone, the idea could be viable. Having said that, I have to wonder how long the most devoted Apple fanboys  will accept being limited to the iTunes ghetto for their content.

Apple is courting owners of US television networks, including CBS and Walt Disney, in the hope of launching a subscription television service over the internet next year, people familiar with the discussions said.  (FT)

The service is expected to be offered over Apple’s iTunes digital entertainment store, which sells movies and TV shows, but does not offer them for a recurring monthly fee.

Roku had been doing a brisk business with it’s  little $99 set top box when it had Netflix, MLB and Amazon on board as content providers. Recently it’s been adding channels at a brisk pace, and most of the new ones are free. They include Revison3, Blip.tv, Motionbox, Mediafly, Twit.tv,  Facebook Photos, Flickr, and Mobiletribe.

While these content channels are all of the new media variety, I don’t think it will take long for the other shoe to drop with old media getting into the act too as the exodux from cable TV gains steam.

More info is available on Roku’s site.

Disclaimer: Third Pipe is a Ruku affiliate, however we received no compensation for publishing this post from Roku or any other source. Third Pipe receives a small referral fee when a reader buys a Roku product via our links.

Google appears to be betting big on the growth of online video. With RJ jacks becoming almost as common as dirt on larger consumer TV’s it’s probably a good bet. Online video will continue to grow exponentially, with available bandwidth becoming the most limiting factor.

Google and On2 Technologies jointly announced today that they have entered into a definitive agreement under which Google will acquire On2, a developer of video compression technology. The acquisition is expected to close later this year. On2 markets video compression technologies that power high-quality video in both desktop and mobile applications and devices and also holds a number of interesting patents.

Some of its codec designs are known as VP3, VP4, VP5, TrueMotion VP6, TrueMotion VP7 and VP8. Its customers include Adobe, Skype, Nokia, Infineon, Sun Microsystems, Mediatek, Sony, Brightcove, and Move Networks. On2, formerly known as The Duck Corporation, is headquartered in Clifton Park, NY.

Under the terms of the agreement, each outstanding share of On2 common stock will be converted into $0.60 worth of Google class A common stock in a stock-for-stock transaction. The transaction is valued at approximately $106.5 million. (Tech Crunch)

Making the most of available bandwidth is a good defensive move for anyone distributing content online. Never the less, lack of available last mile bandwidth will continue to keep a choke hold on how much content can be delivered to consumers.  I have to wonder how long Google and other content producers and distributors will tolerate the duopoly limiting the potential to  grow their businesses going forward.

It’s all about open source. Wikipedia is an open source true believer and the first with real muscle to get behind open standards in online video. Are Flash and Silverlight in trouble? No way. Never the less an open platform being deployed on a portal as significant as Wikipedia is bound to keep them from becoming too closed.

The current IPTV champ has already inked deals for international content from Indian and Britain. The interesting bit is they may return the favor and take their show/services on the ‘Road to Morocco’. –

Of course, the idea is to change this. Speaking with The Financial Times, Andy Forssell - Hulu senior vice president of content acquisition and distribution - said that the company is in the midst of discussions to launch the site in “six to eight” of the leading broadcast markets.

We’re not sure why he’s confused about numbers seven and eight. But there you have it. And the company’s new British and Indian deals are at least a small step towards the site’s internationalization.

Hulu also argues that these deals deliver content that most Americans haven’t seen. But knowing Americans - a race of people who are interested in themselves - they aren’t likely to see it now either. Ex-pats? Sure. Forssell also told The FT that the company has been in talks with The Beeb and ITV about pacts involving their shows as well.

If I were them I would do it. There are some international markets far less regulated and mind controlled by the ISP’s than here in the US.

linky.