Cablevision Inks HBO Now Deal To Create New Kind Of 'Cable' Bundle

Welcome to the new cable bundle. Cablevision Systems said Monday it plans to offer HBO Now to its broadband subscribers, making it the first cable provider to agree to distribute Home Box Office Inc.’s stand-alone Web service.

Cablevision will pitch HBO Now to its Optimum Online broadband customers, even though it offers HBO as a premium channel to its pay TV subscribers. The bet here is that the move won't spur Cablevision's TV subscribers to drop cable in favor of the $14.99-per-month HBO Now and the burgeoning collection of streaming services such as Sling TV, which has 20 channels, CBSN and others.

"We are enabling Optimum Online customers to enjoy content in any way they choose to receive it," Kristin Dolan, Cablevision’s chief operating officer, said in a statement.

HBO Now is HBO's attempt to jump out of the cable- and satellite-TV bundle and reach the estimated 10 million U.S. households that take broadband but don't subscribe to a pay TV package. The first distributor of the service is Apple TV, which has a three-month exclusivity deal among streaming video providers.

But HBO also is offering HBO Now to its existing pay TV partners, such as Cablevision. Cox Communications also is eager to market the service, while Charter Communications, Comcast Communications and Time Warner Cable have been more reluctant to do HBO Now deals.

This deal means that Internet-only Cablevision subscribers will have an option to get HBO without buying into a bigger cable TV package. Cablevision gets a cut of the $14.99 monthly fee but risks having subscribers who are only in pay TV for HBO and its lineup of hit shows, including “Game of Thrones,” deciding to go Internet-only.

By partnering with HBO, Cablevision gives subscribers an incentive to remain as lucrative broadband subscribers even if some decide to drop the cable package.