
Sorry Cheapskates, But HBO Doesn’t Want Your Money - dwynings
http://www.splatf.com/2012/06/takemymoney-hbo/
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lr
This is the perfect illustration of how consumers are at the very tail end of
the market. So many decisions have been made before consumers "vote with their
dollars/feet" that they usually have little "choice." I put choice in quotes
because big companies hate consumer choice and it is why they will always
prefer to do business with a sigle entity that makes decisions on behalf of
the consumer. For instance, the monopoly beverage contracts that every
restaurant has with Coke or Pepsi. As a consumer, you don't really have a
choice in what to drink at a (fast food) restaurant, as that decision has
already been made for you.

~~~
jlarocco
> For instance, the monopoly beverage contracts that every restaurant has with
> Coke or Pepsi. As a consumer, you don't really have a choice in what to
> drink at a (fast food) restaurant, as that decision has already been made
> for you.

Most people don't care enough, but if it's that big of a deal for you, go to a
different restaurant. There's your choice.

If watching HBO is more important than having an internet only option, then
pay for HBO. Otherwise ditch HBO and go internet only through Netflix or
something.

Having choice doesn't mean you get to decide what all the options are.

~~~
bluedanieru
I think you're just being deliberately obtuse here, but anyway here goes: the
OP is pointing out the _restriction_ of choice, not what the choices are. You
won't find a restaurant that serves both Coke and Pepsi. Whether you can go to
another restaurant or whatever is completely beside the point.

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Bud
This guy's argument is rather unconvincing. For instance:

 _Even if HBO wanted to offer direct-to-consumer subscriptions, there isn’t
currently a payments and TV distribution service to build on top of, that’s
popular and easy enough, with the right economics for content owners. Roku?
Boxee? iOS + AirPlay? Samsung Smart TV? Xbox? Please. Compared to cable, these
platforms are less popular, often harder to use, more fragmented, and have
complicated or unfavorable billing systems. Maybe this will change as Apple,
Microsoft, and Google go deeper into the living room. But right now, cable is
still the safest bet._

Actually, iOS is popular enough, easy to use, has a very simple billing system
in place, and is MUCH easier to use than cable.

Cable may be the "safest" bet, for the meek and unimaginative, but it's no
longer the best.

~~~
jack-r-abbit
I'm not sure I would agree that iOS is MUCH easier than cable. I have a 50" TV
connected to a cable box accessible with a remote... that is pretty easy AND a
pretty good viewing experience (even with some of the crappy UI in the cable
box). I'm not sure what set up I would need to have in order have a comparable
viewing experience using our iPad but I have a hard time believing that it
would be MUCH easier (or even easier at all). To me that sounds harder and
less likely to be as enjoyable. But I suppose it would probably be cheaper. So
I guess different strokes for different folks.

~~~
rictic
I'll give you an example. A friend was over a few days ago and wanted to watch
a particular episode of Community. One quick google search and we found the
name of the episode. One quick search on iTunes, a couple clicks and it's
downloading. A moment later and iTunes suggests that we can start watching
immediately while it finishes downloading.

No worrying about when it shows, or if I'd remembered to set something to
record it or even managing local storage. Also, once you've bought a tv show
it looks like iTunes now lets you redownload it whenever you want.

There's still some work to be done to bridge that experience onto the TV
smoothly, but the experience is already much better than any cable experience
for me.

~~~
jack-r-abbit
> _There's still some work to be done to bridge that experience onto the TV
> smoothly_

Could you expand on that? The iPad is my wife's not mine so I personally have
not used iTunes for at least 5 years. Can you get the experience on the TV,
just not _smoothly_? or are you watching it on your iPad?

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nsxwolf
I'm not cheap. I'd gladly pay way too much for an HBO show if I thought it was
good enough. I just really, really hate broadcast media (channel numbers, time
slots) and the band-aids that try to make it tolerable (DVRs).

There is no show that is so good that I will ever subscribe to cable or
satellite for. I will not bring those hideous boxes into my home.

~~~
leak
I probably misunderstood what you said but, you want HBO to spend millions
producing a show and then let you decide what to pay depending on your
thoughts of the show?

~~~
nsxwolf
Oh, no. I just want to buy it on iTunes or similar. I'm saying I'd likely pay
whatever they asked.

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chrisdinn
HBO should never have released a consumer-facing streaming service. They
should've simply allowed viewers to access HBO programs through their service
provider's streaming service.

These apps just highlight how unnecessary the service provider is for the
delivery of HBO content. Sure, the numbers might not make sense for HBO but
they're still going to have to spend the next ten years explaining to
customers why they need to pay $100/month, subscribing to a full suite of TV
channels, just to watch Game of Thrones on their iPad.

Meanwhile, AMC is making TV that's just as good with a business model that
embraces cort-cutters. As streaming becomes more mainstream, HBO is going to
have to keep explaining why you can watch Mad Men in iTunes the day after it
airs but you have to wait almost a year to stream an episode of Game of
Thrones (legally). And their reasons aren't going to satisfy anyone except
execs at Time Warner and the service providers.

Streaming isn't going away. How long can a content brand stand against its
viewers in the age of rampant piracy? I have a feeling we're about to find
out.

~~~
bradleyland
I have yet to hear a statement from HBO that even suggests the line of
reasoning I'm about to lay out, but I think HBO is doing a great job of
maximizing their current business model, while preparing for a coup of epic
proportions.

HBO is building a robust streaming media platform. Everything about the system
would work as a standalone service, save one component: authentication and
authorization.

Stop and look at the moving parts for a moment. HBO isn't letting cable
providers deliver HBO content through cableco apps. HBO has their own
dedicated service and applications. When I want to view HBO content, the
experience is HBO from beginning to end; save the login page to my content
provider. The cable company's role feels a lot like an OAuth provider.

HBO is in the content business, and they know it. I wish I could find it, but
I recently read an interview with an HBO executive where he very eloquently
expressed the current HBO business model. Essentially, cable companies serve
as channel sales agents for HBO content. HBO knows that consumers want their
content, but opening a direct channel risks their current (and very
profitable) channel.

Now take another step back. If the cable companies are merely a sales channel
for HBO, what does that say about HBO's long term positioning. Keep in mind
that HBO is doing a great job keeping the cable providers in that role, even
from a technology standpoint. I think that HBO is putting themselves in a
position to jump from one sales channel to another as soon as those channels
are capable of supporting their business, or at least capable of mitigating
the significant risk posed by alienating the channel that currently delivers
89% of their operating revenue.

EDIT: Here is the article I was recalling: <http://dcurt.is/hbo-forbes-
journalism>. And a relevant excerpt.

> What you don't want to do is to pursue a distribution channel over here [ed:
> the internet], where you think, well, let's go around the affiliate and
> we'll get a couple hundred thousand subs. But the promotional, and packaging
> support we get over here [ed: the affiliate networks], which, by the way, is
> the foundation of our 30 million subs and enables us to get 10 million
> transactions, if that dissipates, and that shrinks, then we will lose a lot
> of subs over here. Because with 10 million transactions, you have to
> generate a lot of subs every single day. You can't afford to have that
> machinery slow down. So we'll gain a little over here, and we'll lose a lot
> over here, and we think there will not be a net gain, there would be a net
> loss. So it's really about economics and a business issue.

Meanwhile, HBO puts themselves in a position to leap when the economics are
right. Very savvy, IMO.

~~~
chrisdinn
I hope you're right. I think this is the best argument for their actions to
date.

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runT1ME
I think HBO is blowing smoke up the cable companies ass, and they are
carefully calculating _when_ to 'cut the cord' so to speak.

HBOGO is just too slick of an application to have been an afterthought freebie
for it's current customers. We're talking a _very_ well designed and
implemented web app, iPad app, and server side component. Does HBO really
think that will entice new subscribers, or keep unhappy subscribers from
canceling?

I highly doubt it. I wouldn't be surprised if HBO is counting each and every
hit and contemplating just how much money they'll make when that day comes.

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joejohnson
Internet subscriptions will happen, but I agree that HBO probably won't allow
it anytime soon. In the meantime, cord-cutters are forced to pirate shows (or
they can wait for certain shows in certain geographic regions). Eventually,
HBO will realize they are trying to compete with free (via pirating) and will
accept that $12/month, or something similar, might be an acceptable price.
Currently, HBO can expect to make billions, but as the cable companies lose
their stranglehold on the distribution channels, the price will inevitably
drop.

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Symmetry
_Time Warner CEO Jeff Bewkes has long been one of the biggest voices behind
“TV Everywhere”...Bewkes would be going against everything he’s talked up for
years_

Doesn't this boil down to, "The CEO would be willing to see his business fail
rather than admit a mistake"?

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mistercow
Then maybe they should stop whining about piracy.

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mcantor
It has nothing to do with being a cheapskate, and everything to do with
wanting to access content that I paid for on my own terms.

~~~
bradleyland
Here's the rub. You didn't buy the content, you bought _their_ terms.

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brennannovak
Viva La File Sharing!

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bluedanieru
Fair enough. They won't have it, then.

