

HBO says no, for now, to fans who want a web-only option - whyenot
http://mediadecoder.blogs.nytimes.com/2012/06/06/hbo-says-no-for-now-to-fans-who-want-a-web-only-option/

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Jun8
This is a textbook case of innovator's dilemma, I think.

"... and there’s no way that HBO could make up in online volume the number of
subscribers it would lose from cable"

This assumes two things:

1\. That all cable companies immediately will cut HBO from their lineups as
soon as it offers web only deals. This is _insane_! What else will keep up the
$100+ cable offerings? They have nothing else other than sports.

2\. Where does this "no way" argument come from. HBO's cut from each cable
subscriber is, I think ~$10. If it offers, say, a $40 all you can eat online
option, how much of that revenue will go down to infrastructure, etc?

With Netflix and Amazon rising on one side and more and more of the younger
demographic watching web-streamed shows, HBO will change, the questions is:
will it take five years or two?

~~~
jaems33
What web-streamed shows come even close to the quality of HBO produced shows?
I'm not trying to be argumentative, I'm curious. Yahoo produces a lot of their
own 'shows' but it all seems amateurishly directed that I can't bother to
watch a second of it.

Edit: I think funnyordie videos are actually really well produced.

~~~
jinushaun
I watch full episodes of How I Met Your Mother for free on cbs.com. No need
for Pirate Bay. Unless, of course, you're talking about web-exclusive shows.

~~~
jaems33
Web exclusive shows.

------
AJ007
HBO's risk now it two-fold:

#1 Netflix, Amazon, Hulu, or (gasp) Google start outspending HBO on serial
shows. The next show of the caliber of "Game of Thrones" or "Sopranos" is not
offered through HBO.

#2 Consumers fail to see why they should be paying for HBO, or even want it.
You could say a #1 3-4 times, combined with a failure to produce a notable
show for a while, would kill HBO's desirability as a brand.

What HBO's management is doing is managing for death. This is what you do when
you have a company with a passing business model to keep it as profitable as
possible for as long as possible. In some ways you could imagine HBO as a porn
company 8 years ago that primarily produced DVDs. Their business is still
profitable and glamorous, they are mostly ignoring the pirates, but their real
enemy is right around the corner.

HBO still has the possibility of transitioning. People care about HBO, thus
all these stories about it. What they've done is tell their competitors "come
get us." (alternatively HBO could just be calling their bluff and has full
plans ready to switch to a web/mobile version)

~~~
tptacek
HBO is already facing down that risk from FX and AMC, two rival channels owned
by different companies offering comparably high-quality shows on basic cable.

My point isn't that this moots HBO's sensitivity to (say) Netflix doing the
next Game of Thrones, but rather that it's unlikely HBO is going to move to
_preempt_ that. HBO does not appear to have reacted to Mad Men, Breaking Bad,
Justified, or Sons of Anarchy as existential threats to their business.

If Netflix is the threat that is going to motivate HBO to go direct to
consumer, they're going to have to put their money and their execution where
their mouth is first. I have my doubts that they're equipped to pull that off,
because I think they have an adverse selection problem: for prestige reasons,
the best content is going to hit HBO, then Showtime, then AMC, and so on down
the line.

~~~
encoderer
HBO turned-down Mad Men. In the recent past _Thrones_ , _Veep_ and _Girls_
have all debuted to critical acclaim and ratings success.

Anecdotally, from what I've read, show runners love HBO.

Anybody who thinks HBO is at risk either isn't paying attention to it, or just
has tastes outside the mainstream. They have among best original content --
scripted shows, comedy specials, 'reality' shows, documentaries, and movies --
on television today. And have. For the last 15 years.

~~~
AJ007
Wouldn't that same argument work for any major record label in 1999?

~~~
encoderer
No? Did you love what the major labels were producing in 1999? I didn't.

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ender7
Dear Mr. Stelter: Please link to the actual tweets. This is not 1972. I don't
need you to read pieces of them back to me.

~~~
crb
I had to dig to find it, but it seems to be this one:
<https://twitter.com/HBO/status/210390531623227392>

------
trimbo
I know it probably won't happen this way, but I hope Netflix and Amazon pull
together awesome original content and smoke these guys.

~~~
technoslut
They may but what is the guarantee they will watch? Take a look at the top
rated shows, music and films. Most are garbage.

The illusion that quality will reign supreme is just that. Since the 90s crap
TV shows have got the ratings.

~~~
trimbo
Hm, I see your point except that ratings-based (i.e. ad-sponsored) content is
not what we're talking about here. We're talking about paid, premium content.
Ratings don't matter, only the bottom line does.

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ef4
I think they're failing to appreciate the forces of habit and culture. The
longer they wait to offer a legitimate option, the more people will already be
habituated to piracy and embedded in communities that exist for piracy.

Or to put it another way, they're doing an excellent job of helping sell the
idea of piracy to people who probably otherwise wouldn't bother. Once those
people get used to it, it will be that much harder to sell them a pay service.

------
AUmrysh
And thousands now feel completely justified in pirating their shows. I can't
help but think that HBO is losing out here by not listening to their
customers.

~~~
pavel_lishin
The "completely" part seems a bit excessive. You could always pay for cable
and buy a DVR.

(Full disclosure, I download content, so my horse is not particularly high,
and I'm not even on it right now.)

~~~
jaems33
Or not watch it all. Crazy idea.

~~~
guard-of-terra
Why not? It's good!

~~~
jaems33
Because it's not zero-sum. There are plenty of incredible sources of leisure,
entertainment, or culture outside of what HBO produces.

Not to mention one can wait for the shows to be on Blu-Ray.

~~~
guard-of-terra
But why ignore this incredible source of culture?

No blu-ray releases where I live, I don't know anyone who owns blu-ray and
don't have one.

So there is no reason to not torrent them.

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jonny_eh
As long as HBO is owned by Time Warner, and the money left on the table from
not offering an online option is less than the amount they're making from
their own cable offerings, they won't change.

~~~
lytol
Time Warner Cable is not owned by Time Warner. They are an entirely
independent company that continues to license the name. I just found this out
recently, so thought I'd share.

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damoncali
This will all crumble when live sports are on iTunes (or whatever service you
care to use).

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seanp2k2
Typical entertainment industry arrogance. They won't offer it until it's very
obvious that they're losing out by not having it as an option.

Why lead when you can follow and still stay rich?

~~~
firichapo
Follow? its more like standing in the same place and not moving. And still
getting rich. And once they decide to move forward they will a) fail at it b)
throw fits because they realize that they are at the end of the rope at that
point.

------
bgentry
It's cool, they don't want my money so they won't get it. I'll keep getting
their stuff from Usenet for free.

~~~
flyinRyan
The issue is, to get the few hundred you would offer, they would have to give
up the millions that the cable companies offer. The last time I looked, if
every single person who pirated HBO shows were to pay per episode (wouldn't
happen, many would still pirate) it still wouldn't be as much as what they get
from cable now.

~~~
guard-of-terra
But why it should be my (or parent) problem?

If they can't do their job by figuring it out, why do they feel entitled to
anything?

~~~
flyinRyan
Uh, what? They don't feel entitled. They're doing what they want and making
money. It's those who say "well I'm just taking it then" that are being
"entitled".

~~~
guard-of-terra
No, they aren't entitled. They just take. They are doing what they want and
having entertainment.

Don't you think it is symmetric? HBO is doing what they want and making money.
Torrenters are doing what they want and having entertainment.

So why blame people for stealing even if the owner doesn't? Who are you to
blame anyone if the "victim" doesn't feel affected by "crime"? Who are you?

~~~
flyinRyan
What exactly would HBO need to do to prove to you they care about copyright
infringement?

~~~
guard-of-terra
Accept my money. And money of other countless beings who watch Game of Thrones
outside of USA.

~~~
flyinRyan
I don't like how things have worked out with HBO but they apparently feel that
the money they could make selling direct is dwarfed by what they make via
channel partners. They are taking steps to try and protect their IP, just not
the ones who want them to take. Claiming that this means they don't care about
IP at all is, frankly, childish.

~~~
guard-of-terra
What they are doing is childish. They want to sit on their rights and have
those protected at the same time. It's like eating an apple and still having
it.

Not only that - they actively harm the whole market by doing so. People
outside USA are forced to torrent their shows, and when they learned torrent
they proceed to download other media, too, that they could have paid for.

You do not "take steps". "Taking steps" isn't the same as caring about
something. The way they "take steps" is inherently peristaltic.

------
chawco
This is the future of this market. If they're not willing to move there,
someone else will and eat their lunch. I like HBO, and they still have plenty
of time to make the move, but if they fail to do so I won't mourn them.

~~~
gtCameron
How? Its not as simple as building a website, we're talking about spending
millions of dollars to create quality content that people actually want to
watch.

Netflix is going to try, and they succeed then I'm sure that HBO will think a
bit harder about it, but right now there isn't much to be gained from them
being the one to take the leap.

------
tomjen3
Then they should expect piracy to continue.

------
lukeschlather
Am I misreading Mr. Lawler's statements, or is the pay-TV industry colluding
to prevent HBO from selling to other markets? I feel like an antitrust
investigation is in order. (Overdue, in fact.)

~~~
mikeryan
It's not collusion. Its a carriage deal. HBO wants distribution on the cable
operators lines. The Cable Operators want HBO. So they do a contract which
precludes streaming via the internet. These contracts are standard across the
industry and in fact standard across almost all industries with products and
distribution (see liquor distributors).

HBO is free to distribute via the internet if they so choose and the cable
operators are free to stop distributing their content.

~~~
gte910h
However, the cable operators are beneficiaries of monopolies, so there may be
anti-trust issues at hand (using their monopoly to control distribution of the
3rd party service).

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pwthornton
I wrote some brief thoughts on this:
[http://interchangeproject.org/2012/06/06/hbo-doesnt-want-
you...](http://interchangeproject.org/2012/06/06/hbo-doesnt-want-your-money/)

Essentially, HBO will eventually fall and start offering content available for
streaming. It's just a question of when. This is where the market is headed
and even cable companies are getting into the streaming game.

In the meantime, I'd settle for an HBO Go app that wasn't junk.

~~~
brockhand
I don't use the HBO Go application too often, but what problems did you
encounter or what would you add?

~~~
pwthornton
The biggest problem is the lack of caching of shows for offline use. You have
to have an active Internet connection for the app to even work, making it
worthless for most traveling. Beyond that, to get good video, you need a very
robust connection, ruling out hotel wifi, coffee shop wifi, plane wifi, train
wifi, etc.

Basically, the only place I can use HBO Go and get a good experience is my own
house.

Why it's called HBO Go is anyone's guess.

------
tlowrimore
Who needs HBO? Let's create incentives for the writers/directors to
disseminate their work via alternative channels. Why the hell should HBO have
a strangle-hold on that market?

------
IgorPartola
Hulu has some great originals such as Spy and Battleground. Reward them!

This is HBO's loss. They could be making money by partnering with the likes of
Roku, Microsoft and Sony. Instead they are going to let dinasaurs like Comcast
and TWC drag them down. I tried writing to HBO a while ago. They did not
bother responding. I cannot help but feel quiet satisfaction knowing that they
are losing so much money.

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nicholassmith
Hey, who can blame HBO, they like their business model. It works, it's made
them millions.

Except if they don't get ahead of the curve they'll find that most people have
gone down the routes of waiting for it to get to NetFlix, pirating it, or not
giving a damn at all. Bye bye millions.

------
grandalf
HBO is the only reason I've ever signed up for cable. This is probably partly
contractual and partly demographic. In a few more years it will probably start
to make financial sense for HBO to offer its shows w/o requiring a cable
subscription.

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wtdominey
I recently downgraded my Comcast service because our monthly bill had reached
ridiculous heights, and in the process had to let HBO go. Losing HBO was the
hardest pill to swallow, but I'll now just wait for the DVDs or streams to hit
Netflix.

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samolang
Ironically, this is probably making HBO more money as it gives them stronger
bargaining power with the cable companies.

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bsphil
Didn't the VP of HBO also think the Internet was a "fad"? Memory is a bit
fuzzy there.

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staunch
What if it was an add on to Netflix, any chance those numbers would be
sufficient?

~~~
ConstantineXVI
Given Netflix (and to a lesser extent, Hulu and AmazonVOD) explicitly has HBO
in their sights, this sort of arrangement is highly unlikely.

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quadratic_r
So this is how they want to play this?

Ok.

UNLEASH THE TORRENTS!

~~~
objclxt
Pirating an HBO show is one way of showing your displeasure: I think a better
way is to vote with your wallet and actually give the money you would have
paid HBO to another provider who's investing in original content for web-only
distribution (like Netflix).

I'm not saying don't torrent HBO shows: go ahead - but reward companies who
are trying to come up with creative ways to get content distributed online.
Torrenting a HBO show rather than subscribing deprives HBO of revenue: giving
your money to a competitor not only deprives HBO of revenue, but provide a
competitor with the finances to take them on.

