
HBO to Netflix: We’re taking our ball & going home - timjahn
http://venturebeat.com/2012/01/05/time-to-torrent-more-boardwalk-empire
======
hesdeadjim
The CEO of HBO is infuriating. I will never have a cable subscription ever
again and it has nothing to do with the economy, yet I would love to be able
to purchase HBO shows digitally. Game of Thrones? Still not even available on
DVD, let alone iTunes, Amazon, or shit, even some crappy HBO run service. Have
friends in the same situation who just gave up and pirated it.

Perfect picture of an out of touch media executive.

~~~
ghshephard
Everyone I know who wanted to watch Game of thrones has torrented it. Many of
them after checking iTunes first. DVDs are out for those who no longer have
DVD Players (all the macbook Air types). Streaming is out for those who want
to watch stuff remotely. Cable Format has to be the most useless delivery
format I can conceive of - you have to: (A) Purchase Digital Cable, and then
(B) Subscribe to HBO on top of that, and finally (C) Go through the hassle of
tracking/converting all those shows into a watchable format.

For the first time in my life, I can say with almost complete assurance, that
the reason the majority of the people I know are torrenting, is because the
rights owner isn't willing to sell in format that they want to watch it in.

Don't call him out of Touch though - The reality, though, is that the CEO of
HBO is a highly informed profit maximizing individual and the reason we don't
get Game of Thrones on DVD/iTunes, is because of the huge revenue stream
represented by the other 95% (99%?) of the population who is more than happy
to Tivo GameOfThrones. He'll forego the 5% of us who won't purchase it on
Cable, in order to make money on the other 95% The Reality is, that some
percentage of that 5% would have Torrented it rather than paying the $50 for
an iTunes season.

They know how much they can make through iTunes, DVD Sales, and, most
importantly, their Cable Customers (Comcast, etc...).

And, if SOPA goes through, it will provide a platform for attacking the
Torrents. First the entertainment industry will DNS blackhole "piratebay.org",
then, when people avoiding that in numbers enough to matter, they will pass
SOPA Part II, and start blackholing IP addresses. SOPA Part III will come out
once people figure some way of connecting to dynamically assigned IP
addresses.

It will be a legislative game of Cat-and-Mouse driven by the massive $$$ that
the entertainment industry is paying the lobbyists.

~~~
absconditus
What in the world do they stand to lose by offering Game of Thrones through
iTunes or Amazon in a reasonable amount of time? iTunes is already selling it
even though it will not actually be available until March. None of us who are
waiting for it are going to subscribe to cable in the meantime.

~~~
andylei
they are afraid that people will cancel their HBO subscriptions and buy just
the shows they watch

~~~
Steko
It's half this and half that they want to convert DVD buyers to subscribers so
they come out with the DVDs a month before the new season starts.

The market for the DVDs is still good (True Blood S3 was the #1 TV show DVD
for 2011) and I'm sure they're research tells them they get more from
conversions then they lose in DVD sales by opening it up 2 months earlier. And
if they started selling DVDs 6 months earlier they'd lose current subscribers
like you say.

------
patrickod
One of, if not the main feature that I associate with Netflix is its large
library of content. I pay the monthly fee as I can assume to a certain degree
that the majority of the things I want to watch will be available. I'm sure
I'm not alone in this.

Fragmenting the content like this over numerous streaming solutions each with
their own charges and workings is, in my eyes, a huge step backwards for
online content. I can't see users being happy to pay more parties for the same
content on numerous services. This to me reeks of networks killing the golden
goose.

~~~
wdewind
OR...

having one large company on the internet be the "distribution" company for a
bunch of media creators sounds a lot like cable TV doesn't it? I think we
actually DO want the media fragmented across multiple providers. We should
look at it as a Good Thing that media creators distribute their own media, no
matter how big they are.

~~~
chc
Except HBO won't do this. If HBO wanted to charge some pittance for HBO Go,
I'd pay it. Instead they want me to sign up for cable, which I don't want, so
they don't get my money at all. (And I don't see how refusing to negotiate a
DVD rental deal helps that goal at all.)

~~~
Steko
"(And I don't see how refusing to negotiate a DVD rental deal helps that goal
at all.)"

If Netflix hemorrhages subscribers and loses it's value proposition vs cable
that's clearly good for HBO/Time Warner/Turner.

Giving your competition a discount is what doesn't make sense and that's why
HBO decided to stop doing it.

~~~
tsotha
>If Netflix hemorrhages subscribers and loses it's value proposition vs cable
that's clearly good for HBO/Time Warner/Turner.

Is it? How much money will they make from all the torrents?

------
gamble
If HBO wasn't hopelessly compromised by their dependence on cable networks,
the smart move would be for them to use their proprietary content as the lure
for a full-fledged competitor to Netflix streaming, similar to the way that
Valve used their own games to get people using Steam. I'd be willing to pay
the $8/month I give Netflix just for access the HBO back-catalog, assuming it
didn't require a cable TV subscription that I'm never going to pay for again.

~~~
AJ007
Curiously, Time Warner Cable customers do not have access to their streaming
service HBO Go. I have a feeling they might be working on a little trick to
pull the carpet out from underneath their competitors.

~~~
robterrell
HBO and TWC patched up their differences on Dec 16 and announced that TWC
customers would soon be able to use the HBO Go app.

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doty
Interesting. It's easy to pattern match this against the old "media company
wants control and doesn't get the modern world" chestnut.

On the other hand, try pattern matching this against the "band decides to put
work directly on internet rather than going through a label" or "writer
decides to self-publish rather than go through a publisher" story. Why
wouldn't a direct-sales model work for them?

Admittedly, they aren't quite doing the direct-sales model, since they only
grant access to HBO GO through some sort of premium TV subscription. But if
they offered direct subscriptions to HBO GO...

~~~
untog
_But if they offered direct subscriptions to HBO GO..._

Unfortunately, that's exactly what they won't do- they've stated as much
themselves. The cable companies essentially promote HBO for free right now, so
HBO is unwilling to rock the boat with them. Selling subscriptions online
would most definitely rock the boat.

I don't know if I blame them or not. I don't think there is any doubt that
this kind of online subscription is the future, but I'm not sure it would
reach as many people as a premium cable subscription would _right now_ , so
they'd stand to lose a lot of money and subscribers. Of course, setting up HBO
GO means that they have the system set up and ready to go whenever the market
changes.

~~~
jonnathanson
I think they can afford to be slightly ballsier than they're being. But not by
much. And that matter of degrees is what makes the situation with "rocking the
cable providers' boats" so fraught. Fact is, HBO is _not_ in a power position
against its cable providers. HBO doesn't drive cable subscriptions en masse
the way sports packages do. HBO still -- for the time being, at least -- needs
Comcast, Time Warner, et al., a lot more than they need HBO.

That said, I don't think there is a major cable provider out there right now
who'd dare drop HBO from all of its offerings if push came to shove. And I
think HBO is, in many ways, _the perfect content brand_ for on-demand
subscriptions or a la carte episode sales on digital ecosystems. Its content
is top-notch, and the potential audience for that content is theoretically a
large multiple of the current HBO subscriber base. The quality of a typical
HBO scripted series is lightyears beyond that of almost any other network
show, and consumers would eat it up.

I agree with you that HBO seems well-positioned for either world right now:
the world in which it currently lives, or the world in which it could find
itself a few years from now. HBO GO is a great app with what I imagine is a
large install base. It seems relatively future-ready, if not wholly future-
proof.

------
herge
"At that time, Kessler also said his company sees cable-cutting as no more
than a temporary austerity measure that will cease as soon as the economy
takes a turn for the better."

To steal a page from John Gruber, this sounds like one to keep for claim
chowder.

~~~
smackfu
HBO has strong content, an amazing brand, and a mobile app. They can turn
around tomorrow and sell a streaming service for $10 that will get tons of
subscribers.

But right up until that point, they will say cable is great and will never go
down.

Thinking this is "claim chowder" is just thinking too small and literally.

~~~
libraryatnight
This is what I was thinking. I almost wrote a rant about how it's unfortunate
that HBO, a network that makes some pretty awesome shows, isn't getting with
the times etc etc. Then, I thought I should probably just hold my tongue and
watch what happens.

I suspect the scenario you describe is correct, they'll defend cable up until
they launch their own service.

------
crikli
Here's what I do when I want to watch a show:

1) Check out Netflix Instant.

2) Hit up Amazon VOD.

3) Check out iTunes

IFF those fail, then I go to the bay.

I prefer to use legitimate services to get content. But I'm not moving away
from my keyboard to do it, and I'm not paying for HBO/Showtime/etc just for
the one or two shows I want to watch.

~~~
franckbyron
You should check out hulu first. It has the biggest selection for tv shows

~~~
kbutler
Hulu has horribly obnoxious ads - repeated multiple times per episode of the
show. Voting "not relevant" on an ad doesn't prevent it from appearing. There
was an ad my wife found quite disturbing (about exorcism), and it played
almost every ad segment. I had to mute and tab away.

And this is on a free trial of the Hulu Plus paid subscription service.

I just can't see paying a subscription fee for that user experience. In
contrast, with Netflix, every time the program hits one of the advertisement
breaks, you get the little psychological reward: "Hurray! No ads!"

~~~
toomuchtodo
Agreed. 3 ads in a row every 5-7 minutes Hulu? To the Bay!

------
pavel_lishin
It sounds like they're trying to roll their own streaming solution, instead of
trying to rely on Netflix.

And hell, it might even work. Isn't this what we've been asking for? _A la
carte_ cable channel selection?

~~~
ddw
If I didn't have to pay for cable and the regular HBO rate, yes, it would be
good.

~~~
pavel_lishin
Ah, I didn't realize you had to have a cable subscription for this. I thought
it was just streaming.

------
DannoHung
I'd buy an HBO subscription today if it didn't mean I had to have $60 of cable
company shit on top of it.

------
smackfu
Relevant:

In December, Netflix CEO Reed Hastings told an investors conference that HBO's
online viewing service, HBO GO, was "the competitor we fear the most."

~~~
r00fus
As long as HBO GO still requires a cableTV subscription (and HBO
subscription), Netflix has nothing to fear about.

I'm sure Amazon, Apple, Google and others are ready and willing to pay HBO for
an option that bypasses the cable requirement, and at some point it may be
lucrative enough for HBO.

On the other hand, Comcast probably has HBO over a barrel, given they also own
the last-mile for millions of internet users as well.

~~~
matwood
_As long as HBO GO still requires a cableTV subscription (and HBO
subscription), Netflix has nothing to fear about._

While this is true, I have to think HBO has already built a payment system and
is literally a flip the switch away from charging customers directly for
streaming. Netflixs CEO is future looking if nothing else, and I'm sure he's
come to the same conclusion.

------
Jun8
"...Eric Kessler stated to industry leaders that HBO shows would not ever be
available to non-HBO subscribers on digital platforms"

This is idiotic on HBO's part.

Look, it's pretty simple: I want to watch "True Blood", which is currently in
Season 5. Netflix doesn't even have S4 yet. I'm willing to pay good money, say
$20 for a season, but am _not_ so crazy as to pay $$ for crappy supreme-
whatever package from Comcast. The reason is not that I hate Comcast (I do)
but I'm not interested in other channels (sports etc.) in the package, i.e. I
want HBO only.

~~~
libraryatnight
This is the sort of thing that encourages piracy, too. It's not that I'm
unwilling to pay for HBO programming, it's that I'm unwilling to pay for the
things I do not want, or need, just to be able to pay HBO for their
programming.

I just went to Amazon, though, to check the price of a Bored to Death DVD to
add to my point (a show I enjoy, but I don't really want to own on DVD and
would pay to stream) and it came up as available for streaming through Amazon
Instant Video. Odd since that seems like a non-hbo subscriber being able to
watch on a digital platform. I assume having Amazon Prime grants access to the
show, too.

------
kunle
I love HBO, but this is really dumb. they have to understand that the fact
that people have to pay $60 bucks for the privilege to pay $15 for HBO is
going to shaft them in the long run. They've cast their lot with the cable
co's, which is fine, I respect you taking a stand, but it will be a full
business cycle before people stop cutting the cord, and by then between
Netflix, Hulu, iTunes, and whoever else arrives, there will be alternatives. .
.

------
motoford
Are the traditional cable premium channels like HBO & Showtime even relevant
anymore? I would hate to be them.

I'm sure many (most?) will disagree, but I see these services as on their way
out. Quickly. They could have lived longer had they brought out more flexible
subscription plans. For example, no way would I have a monthly subscription,
but there have been many times I would have paid some fee for a shorter block
just to catch a movie or event.

~~~
ctdonath
They need to learn from Kodak. Once the public begins to transition en masse
to another medium, it's very fast.

TV has a certain "lemming" following: people want particular content because
other people want that content. When enough people expect the bulk of their
content via Netflix (or wherever) the social pressure to stick to "cable" will
evaporate.

Now if somebody could just replicate the "here we are now, entertain us"
brain-dead delivery system that cable/OTA provides.

~~~
pyre

      > Once the public begins to transition en masse to
      > another medium, it's very fast.
    

HBO already has a system in place (HBO Go), but it seems like they are waiting
for a tipping point to divorce their internet content streaming from the
requirement of having a cable subscription. Probably once they feel that
pissing off the cable companies is worth the revenue they will gain.

------
ck2
Netflix is going to suffer death by 1000 cuts.

The problem with making money off streaming is it's easy to overcome all the
technical problems of streaming these days - all they are doing is using
Amazon's CDN.

So the content owners can just DIY when they want to squeeze every penny of
profit out of it.

------
ifearthenight
We are only going backwards. I've spent hours (x2 after having to re-do with
de-interlace) ripping my HBO boxsets only to have to spend more time hunting
down SRT files. Give me direct downloads already.

------
Nycto
It sounds like HBO is ditching Netflix to do their own streaming. Bummer.
While I wish Netflix had a larger selection, the bigger appeal to me is how
many platforms they support. I can watch it from Windows, my Boxee Box, my
Wii, my iPhone or my Kindle Fire (Linux support is sourly missing, though). If
HBO strikes out on their own, there is no way they are going to have that kind
of breadth.

What I really want is a streaming service that lets me choose what sources I
subscribe to in an a la cart manner. If Netflix wants to survive losing these
content providers I think that's the direction they should go in: become a
platform. And if they don't, it's a great idea for a startup.

~~~
smackfu
To be crystal clear, HBO content has never been on Netflix streaming. This
story is about HBO making it harder for Netflix to lend out the DVDs by not
selling them to them at a discount.

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matthiasb
I just gave a try to their HBO GO Android App. I thought I could pay a
subsccription directly to HBO but no... you need to have a cable subscription
to use this app. Nevermind!!!!

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mml
I have some small hope someone will just buy HBO and put us out of their
misery.

~~~
ansy
HBO was created in 1972 and was wholly incorporated into Time-Life in 1973.
Time-Life is now Time Warner [1], i.e. one of the world's largest media
conglomerates.

I would be surprised if Time Warner put HBO up for sale any time soon if ever.

[1] <http://en.wikipedia.org/wiki/HBO#Development_and_launch>

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smackfu
Whenever a company like HBO cuts off direct DVD sales to rentals, the message
is simply "we don't want to make life easier for you", which makes sense since
NetFlix is a direct HBO Go competitor.

------
wycats
All the people talking about whether HBO wants to "piss off the cable
companies": you do know that HBO is _owned_ by Time Warner, a cable company,
right?

~~~
robterrell
Actually, Time Warner Cable is an independent company. It was spun out of the
Time Warner mothership a couple of years ago.

