Time Warner (TWX) has made HBO available via multiple platforms through HBO Go, its video streaming application introduced earlier this year.

HBO subscribers can now watch popular shows and movies on PCs, mobile devices and tablets in addition to the television through partners like Comcast (CMCSA) and Dish Network (DISH). This is a good move by Time Warner to leverage the premium content and healthy subscriber base of HBO. This move also spells more competition for Netflix (NFLX), which is grappling with subscriber churn and seeking more licensing deals with content producers.

In its recently released third-quarter earnings, Time Warner reported an $822 million profit, up 57% from a year earlier, driven by the strong ticketing sales film division Warner Bros. recorded from the final film of the Harry Potter series, as well as syndication revenue from hit shows such as "Big Bang Theory," "Mike & Molly"and "Two and a Half Men."

See our complete analysis for Time Warner's stock.

HBO an MVP for Time Warner

HBO is a premium channel known for original programming, popular shows, new movies and blockbuster hits. It received 19 Emmy awards this year, the highest among all network channels, under various categories for its popular television series such as "Boardwalk Empire" and "Mildred Pierce."

Although HBO has a lower penetration rate in comparison with CNN, TNT and TBS, it earns a higher average subscription fee of $7 and a profit margin of 54%. According to our analysis, HBO constitutes 20% of Time Warner's stock price, and the programming distribution through a variety of platforms like smartphones and tablets will mean more subscription and ad revenue for Time Warner.

In its third-quarter earnings call, management said that the HBO Go app was downloaded 5 million times since launch in May 2011, and that the app will soon be available on Xbox as well.

Competing with Netflix

Last month, Time Warner signed a licensing deal to offer Netflix subscribers streaming access to shows on The CW through the 2014-15 season. While this is a sound move by Time Warner to increase distribution revenue, the media giant chose a channel for licensing that has lesser quality content and fewer subscribers compared to HBO. Time Warner surely wants to keep its cash cow to itself.

However, HBO may not be able to to hold on to its premium status for long, as video streaming providers like Netflix, Dish's Blockbuster and Amazon Prime compete to offer more titles and diversify their content.

While we estimate the monthly fee per HBO subscriber will decrease from $7.10 in 2012 to $6.80 by the end of our forecast period, Trefis members* project an increase from $7.90 to $8.10 during the same period. The member estimates imply an upside of 4% to the Trefis price estimate for Time Warner's stock.

We currently have a Trefis price estimate of $38.84 for Time Warner's stock, about 10% above the current market price.

* Trefis members constitute more than tens of thousands of users of the Trefis platform, inclusive of investors, financial analysts, and business professionals who use the Trefis platform to create their own models and price estimates.