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Comcast thinks HBO may have just made a huge mistake

Comcast HBO Online Streaming

Surprise: Comcast isn’t overly enthusiastic about HBO’s plan to offer a standalone streaming service that will appeal to cord cutters. Barron’s notes that during an earnings call this week, Comcast EVP and NBC CEO Steve Burke was asked for his take on HBO’s decision to offer a standalone streaming option starting next year. As you might expect, Burke downplayed its significance and even suggested that HBO might come to regret breaking itself away from the bundle in the future.

RELATED: HBO will fulfill cord cutters’ dreams and launch a standalone streaming service next year

“HBO [right now] probably has the most elegant, economically attractive sort of business model of anybody who has ever been in the television business,” he said. “And it’s going to be very interesting and I think challenging for them to go and try to attract new customers into that ecosystem without cannibalizing existing customers. The existing customers that are sold through cable and satellite are extremely high margin. So even if they sell at $15 a sub, they’ve got to be very — when they go directly to consumers via the Internet, they have got to be very careful with cannibalization.”

Of course, if HBO’s new service “cannibalizes” existing customers it will also mean less revenue for Comcast since those customers will be opting out of pricier pay TV packages in favor of streaming HBO alone. Nonetheless, HBO has benefitted in the past from the cable bundle system and if its streaming program proves to be popular it could yield lower margins for the company.

All the same, HBO is also smart enough to see where the future of TV is headed and it’s trying to get ahead of the curve with its own streaming service that can go toe-to-toe with Netflix and other streaming services.

Prior to joining BGR as News Editor, Brad Reed spent five years covering the wireless industry for Network World. His first smartphone was a BlackBerry but he has since become a loyal Android user.