Time Warner's (NYSE:TWX.DL) HBO has always been exclusive to cable and satellite television. Even though the pay channel now has its HBO Go digital streaming service, using it requires a cable subscription.

That may soon change as Time Warner CEO Jeff Bewkes said at a recent investment conference that the company was considering offering stand-alone access to HBO Go that would not require a cable subscription. That would put HBO in direct competition with Netflix (NASDAQ:NFLX).

Quartz shared some of Bewkes' comments explaining why Time Warner was considering changing its long-standing strategy. Bewkes was responding to a question about whether HBO would consider going direct to consumer, making it available to anyone with a broadband connection:

So now the broadband opportunity is getting quite a bit bigger, and the ability of the plant to deliver something robust is getting stronger; and so the question you're asking is becoming more viable, more interesting. What we're trying to do is basically make sure that we've done everything we can with our distributors to take advantage and have them take advantage of what customers they could have. And we've got to keep looking actively. We're seriously considering what is the best way to deal with online distribution.

If HBO were to offer a digital streaming service without a pay television subscription it would not only give Netflix a new competitor, it would be a blow to the cable and satellite companies. Having HBO as an exclusive offering has likely kept some pay TV customers from cutting the cord because doing so would mean losing access to popular shows including Game of Thrones, the last season of Boardwalk Empire, and Last Week Tonight with John Oliver. A stand-alone HBO would change that, but Time Warner still needs the cable companies, so it is likely to tread somewhat lightly even if it does launch a no-pay TV-subscription-required HBO Go.

A screenshot of the HBO Go website. Source: Author

Comparing HBO and Netflix
As of July, when Netflix reported its second-quarter results, the company had 35.09 million domestic subscribers and 12.92 million internationally. Prices vary around the world, but most U.S. subscribers pay $7.99 a month if they signed up before the company's May price increase.

Time Warner does not report subscriber numbers for HBO, but total HBO revenue for the second quarter of 2014 was $1.4 billion and revenue for the first six months of the year was $2.75 billion, according to the company. That's a little more than Netflix, which reported $1.14 billion in the second quarter and $2.2 billion for the first six months of the year.

Though their revenue is not that far apart, HBO is still much more profitable due to the huge investments Netflix continues to make in order to grow. Netflix, not counting its DVD business, had a profit of $278 million for the first six months of the year while HBO contributed around $1 billion to the Time Warner bottom line.

In terms of content, both brands produce prestigious original programs with high water cooler value. Netflix releases its shows in full-season batches while HBO uses a traditional television one episode a week model. At the 2014 Emmy Awards, HBO led the way with 99 nominations, winning 19, while Netflix had 31, but took home only seven trophies.  

Both services are fairly similar, though HBO has a longer history and more original shows in its archives (though some of those have been licensed to Amazon (NASDAQ:AMZN)) for its free streaming offering to Amazon Prime members. HBO also has sports, including some top-tier boxing, and a live weekly talk show hosted by Bill Maher along with Oliver's program. Netflix has much deeper archives when it comes to movies and countless deals to air television shows that it did not produce. 

If priced similarly, consumers would have reasons to select either service and the choice could come down to whether a person is more interested in the new season of True Detective on HBO or a new batch of House of Cards episodes on Netflix.

Will a stand-alone HBO work?
It's somewhat difficult to pinpoint what HBO costs each month because it varies by cable system and in many cases the channel is packaged with other premium services or bundled with other channels which trigger discounts. Blog HBOWatch researched pricing for the premium service in February of last year and the numbers it reported ranged from $14.95 a month to $19.99 a month. Netflix offers a number of packages, but it's normal U.S. deal costs $8.99 for new subscribers.

Whether a stand-alone HBO could be a threat to Netflix may well depend on price. Bewkes has to walk a bit of a fine line, at least for now, to not overly anger Time Warner's cable partners, which it relies on not only for HBO, but its Turner channels, the various CNN offerings, and assorted other brands. At $8.99 a month, HBO Go is an obvious alternative to Netflix, though at that price it's conceivable cord cutters would simply sign up for both.

If the price was closer to $19.99, which may be where HBO would set it in order to not be undercutting its cable partners or offering existing subscribers a way to pay less, then the demand would be lower and the move would be less of a threat to Netflix. 

Clearly HBO has the content to take on Netflix. But, while the brand's parent company remains at least somewhat beholden to its cable partners, its willingness to anger those partners by offering a price-competitive deal which does not include them may not be there.  This is a coming battle where it's possible HBO at least slows Netflix's growth, but it's unlikely -- especially if it's priced higher -- to cut into its subscriber base.  

Daniel Kline has no position in any stocks mentioned. He is a Netflix and and HBO subscriber. The Motley Fool recommends Amazon.com and Netflix. The Motley Fool owns shares of Amazon.com and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.