Time Warner's (TWX) HBO already offers a digital-only, no-cable-subscription-required service in a few select countries. Now it's possible the pay channel will expand that offering to other parts of the world, directly positioning itself as an alternative to Netflix (NFLX 1.73%).

To do that, the pay-TV service would likely add content not only from other Time Warner properties, but also pursue deals with companies outside the corporate umbrella. 

People don't pick the programs they watch based on what companies own them, Time Warner CEO Jeff Bewkes said during the company's recent second-quarter conference call. "And I think one should always look at what consumers want to do and harness those platforms, but keep in mind exactly the range of products that consumers want. We think that we can have that for our HBO Turner or Warner product, but we're anticipating that people will want more than that."

HBO on its own is a powerful offering. The network does have a deal where some of its older programs air on Amazon's (AMZN 0.58%) Prime Video service, but its newer shows can only be seen by HBO subscribers. With a lineup that includes "Game of Thrones," "True Detective," "Girls," and the final seasons of "True Blood" and "Boardwalk Empire," HBO on its own might be worth the $8.99 a month that new Netflix subscribers pay. Add in the content from the Time Warner family, plus HBO's huge archive of older shows, and the value proposition becomes even more reasonable.

But given the huge volume of movies, original and reaired shows Netflix has, Bewkes might be right that making a real run at the streaming giant requires content from outside the family. That's one of two areas where offering a stand-alone, no-cable-subscription-required HBO becomes challenging. The second is that cable companies will not want to give up exclusivity.

Cable companies will fight this
The writing appears to be on the wall for the concept of cable companies forcing customers to buy all sorts of channels, but Comcast, Cablevision, Cox, and the rest won't accept debundling easily. By being the only way to subscribe to ESPN, HBO, and other premium channels, the cable companies have kept a steady stream of subscribers locked in.

If cable is the only place to get HBO, then the pay service's subscribers -- which the company said stood at 130 million worldwide (29 million in the United States) during the recent earnings call -- must keep paying for cable. If customers can pick and choose only the channels they want and receive them in a purely digital fashion, it will surely cause a flood of people to rethink their cable subscriptions.

This reality is coming. Walt Disney has already made deals to allow DirecTV and Dish Network to include ESPN and the various Disney cable channels in digital streaming services that will not require a cable subscription. Bewkes can see the future, and he knows that the current cable model has very little life left. Tying HBO to it may buy a little time, but not enough to matter.  

Launching a new service is not so simple
Time Warner owns an extensive film library as well as the Turner channels -- TBS and TNT, which both have large program libraries. The problem is that the vast majority of its shows are tied up in long-term deals with services that would be competitors to a stand-alone HBO. 

Some Time Warner programming, including previous seasons of animated and live-action shows from Cartoon Network, Warner Bros. Animation, and Adult Swim, as well as the TNT drama "Dallas" are already airing on Netflix as part of a multi-year deal. Amazon has rights to "The Closer" and "Falling Skies" from TNT, as well as select Warner Bros. TV properties including "The West Wing" and "Fringe."

Eventually those deals will expire and HBO would be able to bring its content back to its own digital platform. Making content deals with other providers will be challenging as well, since the company will be competing not only with Netflix, Amazon, and Hulu, but other companies planning over-the-top digital streaming services. It's a crowded space, and landing content people actually want to watch won't be cheap.

However, once it regains the rights to its own shows, HBO and its  powerful library would be in a position to make strategic deals for external content. The company already has signature originals and premiere shows, so it could look to add niche programs that enhance its offering. It's not an easy path to follow, but HBO and Time Warner are by far the best-positioned of any brand to challenge Netflix.

Will HBO do it?
HBO has no choice. Cable as we know it has already begun to fall apart with the overall number of subscribers in the U.S. declining slightly in 2013. That trend will accelerate as more younger customers cut the cord and move to digital-only choices. HBO has shows that people will pay for. That's been demonstrated by customers' willingness to add the service to already-expensive cable subscriptions. 

On its own, without the burden of requiring customers to pay for cable, HBO should emerge as an even stronger brand. The same people who buy Netflix as a cable alternative will likely see HBO as a similar value. A streaming HBO that does not require a cable subscription will be a strong challenger and complement to Netflix. That's a win for consumers and Time Warner, with the only losers being the cable companies.