HBO Joins the Movie Download Derby

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Comcast Could Still Come on Board

HBO's Kessler says the company is talking to all providers, including telcos such as Verizon (VZ) that have deals to also offer Internet service. Comcast, which controls roughly 20% of America's TV sets, may soon come on board. The cable giant is in the process of renegotiating its contract with HBO.

What HBO does have going for it is a killer brand name and some of the best shows on TV today. It has 400 hours of entertainment, compared with maybe 150 hours of video on demand for many cable operators. You get HBO movies, and they come from most of the biggies, such as Warner Bros., Fox (NWS), Universal, and New Line, but only when HBO has the rights to them, which starts about nine months after they hit the theaters and then lasts for only 18 months.

You also get its Emmy Award-winning lineup of shows, but not the entire season for some of them. For example, you can get the full season of Curb Your Enthusiasm. But there are only four to six episodes of Sex & the City available. HBO, which will refresh about 25% of its offerings every week, says it needs to save space on the service for sports documentaries, kiddie programs, and other stuff. HBO could also be wary of cutting into its DVD sales for some of its more popular offerings.

There are some other aspects to HBO on Broadband that were clearly designed to appeal to cable operators, who still pay the majority of the pay-TV service's bills. While the online service is available on up to five registered computers or various devices, there is a very sophisticated authorization process to make sure nonsubscribers can't log on. What's more, you can't gain access to the service away from your house like you can with Slingbox. You can, however, download and store movies to watch them on your laptop when you are away from home.

Still, HBO can give subscribers what HBO's Kessler says is the real prize—"the content that they want, when they want it." He figures the service will help operators such as Comcast attract new customers who haven't plunked down their money for either HBO or Comcast's online service.

See the BusinessWeek.com slide show for more about movies online.

Grover is Los Angeles bureau chief for BusinessWeek.