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HBO OTT plan hits Netflix

Premium US cablenet HBO has revealed it will launch a standalone internet-based on-demand service in the US in 2015, helping put a dent in the Netflix share price.

HBO chairman and CEO Richard Plepler told a Time Warner investors’ day event on Wednesday that it was time to “remove all barriers” from people who want to watch HBO.

The move is designed to target the 10 million broadband-only homes in the US with shows such as Game of Thrones and The Newsroom, which were previously only available via the company’s pay TV service.

Plepler said: “All in, there are 80 million homes that do not have HBO and we will use all means at our disposal to go after them.”

Details are currently sketchy, with Plepler promising more information soon.

But the news, combined with disappointing third quarter subscriber numbers, was enough to send Netflix shares plunging later in the day after the release of the US streamer’s latest financials.

Netflix added less than one million customers in the US and just over two million internationally in the three months to September 30, 2014 – below prior projections.

“This quarter we over-forecasted membership growth,” CEO Reed Hastings and chief financial officer David Wells said in a letter to investors.

The company saw its share price plunge more than 20% as a result, having earlier been dented by the HBO news. In their letter, Hastings and Wells responded positively, however, to developments at the Time Warner-owned pay player.

“It was inevitable and sensible that they [HBO] would eventually offer their service as a standalone application,” the pair wrote.

“Many people will subscribe to both Netflix and HBO since we have different shows, so we think it is likely we both prosper as consumers move to internet TV.”

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