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Apple and HBO near deal on streaming service

Source: HBO. Look out! Paul Ryan released the full populist dragon when he took off "the shackles" from Donald Trump, says Jake Novak.

Apple (AAPL) and HBO are in talks, closing in on a deal to include HBO's streaming service on the Apple TV platform, sources tell CNBC.

Neither HBO nor Apple would comment, but the sources say HBO is talking to Apple about featuring its new direct-to-consumer streaming service, to be called "HBO Now," on Apple TV as one of its launch partners. The discussions are heating up as HBO is looking to launch its new service ahead of the highly anticipated season premiere of "Game of Thrones," set for April 12.

Though negotiations are far from final, the monthly price the two companies are talking about for HBO's new service is about $15, sources tell me. That's more than Netflix (NFLX), (nearly double the cost of its most basic service) and roughly the same cost of adding HBO to a traditional pay-TV subscription.

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Ever since HBO Chief Richard Plepler announced he's bringing HBO outside the traditional pay-TV bundle this past fall, the industry has been anxiously awaiting details on the streaming video product. The big question: Just how much will HBO charge in order to cover its costs, without threatening to cannibalize its core business "within" the pay-TV bundle.

It's no surprise that HBO and Apple are in talks: HBO is surely in discussions with all the major digital content platforms-from the game consoles, XBox and PS4, to streaming video boxes, including Roku. We'll also see if HBO can work out terms to package its new streaming app with a cable subscription-rather than just a pay-TV package.

The key thing the whole industry is watching: whether this new "HBO Now" app really just appeals to people who don't currently subscribe to TV, or whether it'll drive current subscribers to cut the cord.



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