CBS All Access isn't the game-changer unbundlers hoped it would be. Source: CBS

Recently, both Time Warner's (NYSE:TWX.DL) HBO and CBS (NYSE:CBS) gave a glimmer of hope to the cord cutting and unbundling subset looking to cut pay-TV providers out of their lives. Both companies joined Hulu Plus and Netflix by offering a stand-alone, streaming product for their content. There's just one problem...if this is the future of television, consumers appear to be better off sending checks to their pay-TV providers.

Specifically, the issue is one of pricing and value: The two new entrants pricing is structured in such a way that it appears they do not want to compete against cable providers. Rather, it appears they are looking to add incremental revenue and are pricing the product in a manner that actually encourages a pay-TV subscription. In addition to providing streaming services, the unbundlers hoped for a value proposition from these channels. Sadly, it appears they're not going to get it.

HBO is not attacking its "bigger" opportunity
Time Warner's CEO Jeff Bewkes appeared to fire a shot across the bow to pay-TV providers at a September Goldman Sachs investor conference. When discussing HBO Go, its current Internet offering only available with a pay-TV subscription, he appeared to tip this hand to an Internet-only offering [emphasis added]:

Up until now, it looked like the best opportunity was to focus on HBO through the existing affiliate system... The broadband-only opportunity up until now wasn't ... at the point where it would be smart to move the focus from one to the other. Now the broadband opportunity is quite a bit bigger.

This was noteworthy considering last year at that conference he identified HBO's main opportunity as the 100 million pay-TV subscribers rather than the less than 10 million without pay-TV. However, if a recent report from The Information is correct, HBO plans to price the service at $15 a month -- generally more than the cost through pay-TV providers. A survey from The Diffusion Group, by way of Fierce Wireless, reported that only 6% of broadband users who don't subscribe to pay-TV were interested in HBO if the service was priced at $15 or more per month.

Will HBO keep the Go brand for its Internet-only service? Source: HBO

Although HBO may pay lip service to this new opportunity, the pricing appears to contradict this. Matter of fact, the pricing appears to be designed not to anger its pay-TV partners rather than provide value to unbundlers and cord cutters.

CBS All Access is still too expensive
Although CBS priced their All Access service at roughly $6, it is still too expensive when one considers the value provided by pay-TV. For perspective, the FCC estimates basic cable only averaged $64.41 in 2013. If CBS' price becomes the average price of a channel, subscribers can only purchase 10 unbundled channels; the average U.S. household watches 17 channels. In addition, you lose the optionality of new programming and discovery under an unbundled scenario. The end result could be fewer programs with higher costs.

CBS also faces problems in its All Access network by the exclusion of NFL programming. The NFL and other live sporting events are a powerful moat against cord cutting and the league appears to be on the side of pay-TV providers. The league has been reticent to cut pay-TV providers out of the process, but has deals with DirecTV and Verizon for limited streaming of games.

Final thoughts
Although many feel the pay-TV model in its current form is unsustainable -- myself included -- CBS and HBO haven't provided the value necessary for mass defection. Right now, Hulu Plus appears to have the right plan with its "mini bundle" of programming from ABC, Fox, and NBC for nearly $8 a month. If these channels are looking to entirely cut cable out of the process, I'd like to see a mini bundle of all these Internet-based services with an attractive price.