About a month after Time Warner Inc. chairman and CEO Jeff Bewkes said he was open to allowing premium channel Home Box Office to ride on a straight broadband offering, Comcast apparently has taken him up on it.
Comcast confirmed Friday that it is testing a new package that would give consumers a 20-25 Megabit per second high speed data connection, its premium-level Streampix multi-screen video-on-demand service, Wi-Fi access, HBO and local broadcast networks for an introductory price of $39.99 per month. The price would rise to about $70 per month after the first year.
While viewed as the kind of package that would help Comcast ward off the cord-cutting trend, the company acknowledged that the new pilot package is aimed at selling on-product customers on a higher level of service.
In a statement, HBO said it was pleased to be part of the offering.
"This offer recognizes the popularity of HBO's programming and brand," HBO said in the statement. "For those consumers that prefer this type of package, we are thrilled HBO is being made available to them in this way."
Bewkes said at the Goldman Sachs Communacopia conference in September that he would be open to an HBO/broadband offering from cable and telco operators as long as the customer had an existing pay TV connection.
According to Morgan Stanley media analyst Ben Swinburne, the package “appears to be a first step toward addressing the pay-TV affordability issue for some consumers, while at the same time leveraging cable’s broadband/wifi product and two-way plant.” He estimates that the offering could generate returns of about 40% in its first year, rising to 60% over a three-year span.
Comcast is the latest U.S. cable operator to test out a high-speed/video service package that highlights the broadband component of the offering.
Cox Communications briefly tested an IP video service in Orange County, Calif., tailored to broadband-only customers that tied in almost 100 IPTV channels and a cloud DVR service. Viewed as a way to shield Cox from the cord-cutting trend, the service sold for $39.99 per month. Cox closed down the trial in September.
--Multichannel News technology editor Jeff Baumgartner contributed to this story.