HBO has dropped a bombshell, announcing plans to launch a standalone over-the-top service in the U.S. in 2015. The announcement was extremely short on details, except to say it was targeted to the 80 million U.S. homes that do not currently subscribe to HBO. Here are my 8 quick reactions to the news. Many more thoughts to follow as more details are released.

1. Content is key to success - No question, HBO's outstanding content will be the key to HBO OTT's success. But what will actually be included and what won't be? In particular, HBO did a big multi-year licensing deal with Amazon in April providing it not only library content like "The Sopranos," "The Wire" and "Treme," but also past episodes of current shows like "Girls," "Veep" and "The Newsroom." Did HBO insist on a non-exclusivity carve-out provision if it launched its own OTT service? If it didn't then there will be a ton of great HBO content that won't be in HBO OTT, seriously undermining its appeal. With all the hype that HBO OTT is going to be a cord-cutter's nirvana, anything less than what HBO Go offers (i.e. full library, current seasons, equal access with linear, etc.) is going to be a big let down for a lot of people.

2. Price - In addition to content selection, price is the other key variable to success. Netflix has set consumers' expectations at $8/month for what a high-quality OTT service should cost. If HBO OTT is above $8/month it will suppress demand. But it's extremely hard to see HBO OTT being offered for anything less than $20/month when pay-TV operators typically retail it for $15 or more. How aggressively HBO OTT is priced will say a lot about just how willing HBO is to jeopardize its critical pay-TV relationships.

3. How does HBO OTT affect its pay-TV partners? Speaking of, the big issue with HBO going OTT has always been concern it would upset critical pay-TV partners who strongly market and support HBO. But HBO CEO Richard Plepler believes pay-TV operators will actually "lean into" HBO OTT as it will help their broadband businesses. Further, he strenuously stated he sees "no risk" that HBO OTT will cannibalize existing HBO subscribers or induce cord-cutting, seeing "the great preponderance of all this as additive." Again, depending how good HBO OTT's content/price are these comments could be wildly optimistic.

4. Pay-TV message feels blurry - Even as Plepler insisted HBO OTT won't cannibalize or cause cord-cutting, he broadened his definition of the target market for HBO OTT, saying, "All in, there are 80 million U.S. homes that do not have HBO and we will use all means at our disposal to go after them." Well, doesn't that mean at least some of these 80 million (many of whom ARE pay-TV subscribers) will be induced to drop pay-TV and take HBO OTT directly? Amid these messaging cross-currents, somehow HBO has to figure out new deals with pay-TV operators for HBO OTT to keep them incented.

5. Why are 10 million broadband homes so important all of a sudden? - Putting aside the 80 million, Plepler pegged today's broadband-only homes as in the 10-15 million range. Historically HBO's argument for not pursuing them was it was too small a group, and not worth risking existing pay-TV relationships. What changed? Netflix surpassing 50 million subscribers. Rupert Murdoch's bid for Time Warner. And HBO's need to not look like its head was in the sand.

6. Pay-TV will be more about sports than ever and Turner is in the hot seat - As broadband homes have ever-greater entertainment options online, pay-TV is becoming more about sports than ever. With Turner's new $11 billion, 9-year NBA deal, that means it has to extract ever-higher carriage fees from operators. Can it? We'll see.

7. Netflix is still the 800-pound OTT gorilla - Talk about timing - right after HBO announced HBO OTT, corporate sibling Warner Bros. announced a licensing deal with Netflix for the full, sought-after "Friends" catalog. That deal underscores Netflix's massive clout in the industry and just how high the OTT competitive bar is. HBO has to learn about infrastructure, data, customer service, etc. - all things Netflix mastered years ago.

8. Netflix U.S. cable deals on the way - Speaking of Netflix, we should definitely expect it to now expand its U.S. pay-TV partnership deals. If HBO can have its cake and eat it too (be a pay-TV partner and an OTT player), then Netflix will argue it can too. Given Netflix's strong brand, it will likely start having more success.

So what's it all mean? In the short-term HBO OTT probably means very little. It will be at least 6-9 months before it's in market. Depending on what it actually is and how it's priced, it could really resonate and tap into the latent vein of interest in HBO programming, or it could be a huge dud.

Over 3 years ago, in "Could HBO be the Next BLOCKBUSTER," I laid out all the risks in front of HBO if it DIDN'T adjust to new broadband realities. Well, now it appears to be doing just that. And Time Warner is taking a massive risk with its crown jewel, potentially setting off a chain of events that could eventually upset the whole pay-TV industry's tentative equilibrium.