More Broadband Movie Delivery

The New York Post reports today that content from Time Warner’s HBO network will be available over broadband. The initial rollout is very limited in scope, but there are indications that the availability will expand.

The service will provide on demand access to 600 movie titles and about 4,000 hours of original programming including “The Sopranos” and “Six Feet Under”. What will this cost? If you’re a Time Warner cable broadband customer, or a subscriber to HBO, then you get it for free. Other users will be able to get access to the service for an additional subscription fee. There’s one more catch; initially, it will only be available in Green Bay and Miwaukee, Wisconsin.

In announcing “HBO on Broadband”, HBO co-President Eric Kessler is quoted by the Post as saying “We are different from the broadcast networks because we aren’t in the advertising business. We are in the subscription business, so if we can create services that increase the usage of our product, we can extend the life of a subscriber, which is great for us and for the cable operator.” So it looks as though Time Warner sees subscription-based service as a workable business model for content distribution on the Internet.

The Post story does not attempt to reconcile this announcement with Time Warner’s announcement last week that they are going to start testing new rate plans that would cut off broadband services to customers who use too much bandwidth. This is a shock to those who thought they were buying unlmited access to the Internet with their broadband subscriptions. The new packages will limit the amount of data that you can transfer in a month. It’s not clear how the company will treat the “free” downloads from the HBO on Broadband service, or whether using it would force users to step up to a more expensive cable broadband subscription.

I can understand the cable company’s desire to limit abuse of their broadband systems by the relatively small number of users who transfer extraordinary amounts of data, but I suspect that consumer reaction and competition will clobber their plan to charge more for higher data transfer volumes. And if their HBO division complains that these new limits pose a threat to the success of HBO on Broadband, expect the cable company to come up with a different approach to resolve broadband abuse.