Cablevision Systems Corporation’s CVC broadband customers will now be able to enjoy HBO’s upcoming streaming service – HBO Now. This HBO contract makes Cablevision the first company to strike such a deal with the former. Cablevision’s shares gained 2.0% on the news.
However, Cablevision has not offered any pricing-related details. Nearly three million broadband customers will be able to access HBO Now. The service has been strategically launched, matching the time of the season five premiere release of the channel’s blockbuster show – Game of Thrones.
Owned by Time Warner Inc. TWX, HBO announced the launch of HBO Now in Oct 2014. On Mar 9, 2015, Time Warner Inc. roped in Apple Inc. AAPL as its exclusive partner to launch the standalone streaming service of its premier channel HBO. HBO Now will be available on all Apple devices including iPhone, iPad and Apple TV from April for a monthly charge of $14.99.
We believe that this deal will not only help Cablevision draw more broadband customers but will also drive its revenues. We also believe that this service will cater to the young generation who prefer watching TV content online. Notably, Cablevision lost 20,000 high-speed data customers in 2014.
Recently, a report of Leichtman Research Group Inc. (LRG) revealed encouraging data which illustrates cable MSOs’ dominance in the high-speed broadband (Internet) market, steering past the telecom industry. This comes as a respite at the time when cable TV operators have been losing foothold in the core video market to fiber-based telecom operators and online video streaming service providers.
Cablevision currently has a Zacks Rank #3 (Hold).
A better-ranked stock worth considering in this sector is ViaSat Inc. VSAT with a Zacks Rank #2 (Buy).
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