
AT&T’s Troubling Plan to Change HBO - okket
https://www.theatlantic.com/entertainment/archive/2018/07/att-changing-hbo/564635/?single_page=true
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tptacek
I don't buy the logic here, and I'm not sure David Sims does either; this
strikes me as one of those headlines that was written by an editor,
independently of the article.

For as much as anybody here likes HBO, the diagnosis Stankey (and, I think,
Sims) has of it seems apt. HBO has a sterling reputation. But so what? Even
today, they're no longer distinctively good; in fact, there are basic cable
channels (AMC and FX) that have given HBO a run for its money.

Does anyone really believe that HBO is going to outcompete Netflix on original
programming over the long run? Netflix introduces new programs like Google
introduces new chat programs. It's not even an event for them. They just
randomly drop them in the middle of the week, as if they don't have time even
to promote them. Have you ever started an episode of Jessica Jones and had to
wait 2 minutes for them to promo the next season of Mindhunter?

And that's just Netflix. Amazon will eventually figure TV out. Disney controls
Hulu now. Apple is making a move into online video.

Meanwhile, after Game of Thrones ends, what's HBO got for tentpole series?
Westworld? Besides the fact that it won't be airing again for 2-3 years, its
renewal was not even a certainty.

I think Stankey is right. If HBO is going to be a factor long-term, a thing
people pay substantial amounts of money to retain access to, it is going to
have to look more like Netflix and less like a thing you pay your cable
company extra for. HBO could afford lulls of a year or two taking flyers on
just 1-2 new prestige series (Carnivale; Newsroom; Vinyl). But premium cable
is over, everything is going to be disintermediated, and HBO will need to
justify demanding $15/mo directly from people. I'm not sure it's worth that
today.

~~~
mortdeus
I wouldn't say that premium cable is over. Rather before you used to pay $60 +
premium channels a month to have cable tv. Now you pay $15+15+15+15+15+15+15
... + 75 for internet connection that doesn't have data caps.

Personally I think the de-bundling of cable TV and the getting rid of ads (i
seriously never understood how we can pay for cable tv and still be forced to
watch ads) is a great way for the market to move forward. It shows you that
the consumer does ultimately get the final say so.

However, I do not believe that costs are getting cheaper. If anything they are
just going to keep going up and up.

Also the crazy level of competition going on right now to produce "service
selling" original content, is in my views creating a situation where we keep
getting a sub par product out of the deal.

~~~
notyourwork
I agree though I think in short term price normalization is going to create
lots of situations where demand exists but customers are unwilling to pay for
all they want. The forced choice is going to create a really competitive
market but in short term I won't sign up for 2+ services at ~$15/month.

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kemiller
They should tap HBO's expertise and connections to build a Netflix competitor
while keeping the HBO brand premium. Flogging a racehorse to make it pull a
wagon train will just end in tears for everyone. I bet the champagne came out
in Los Gatos.

~~~
ordinaryperson
Developing hit shows like "Game of Thrones" is extremely hard, and the
competition for streaming content is cuthroat.

Meanwhile AT&T essentially only competes with Verizon, and does that primarily
by offering the exact same services -- not exactly revolutionary, Harvard
Business School Case Study stuff.

What has AT&T done in the last 20 years that was original? Mainly its
operating business strategy is to raise prices as a regional, quasi-monopoly.

But sure, it's the (not highly paid) HBO employees that have to work harder,
emulate those brilliant AT&T execs and their super original business growth
strategies.

~~~
tptacek
What is it that you think the prestige networks do to develop shows? They're
not writing them themselves; they buy them from writers and production
companies. Nobody is suggesting that AT&T is going to pull the next Sopranos
out of a conference room meeting.

~~~
ordinaryperson
If it were just a matter of buying ready-made TV, anybody could do it.

Showrunners come to them with raw ideas and the first step is to filter out
most of the bad ones. Then there's writing, casting, budgeting, filming,
editing, marketing...you make it sound like HBO is a bunch of cardboard
cutouts and they just order up completed shows from Amazon.

My point is AT&T has done practically zero creative or truly innovative in the
last 20-25 years, it's comical to listen to a career AT&T suit lecture HBO
staffers (who excel in a field far more difficult than his) about how they
need to work harder.

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dagenix
So, basically day 1 of owning HBO, they tell the employees that they aren't
making enough money (even though they are quite profitable) and that they are
going to have to work harder. I'm speculating here, but I'm guessing there was
probably no talk about compensating them more.

Its hard to imagine a better way of convincing all your best employees to
start thinking about switching jobs.

~~~
hinkley
Yeah but think of all the money you’ll save in salaries!

~~~
AceJohnny2
"Nice Golden Goose you got there..."

~~~
tonysdg
"...be real shame if someone was to acquire it, force it to produce twice as
many eggs on half the feed, create a half-baked digital platform on which you
could watch it lay eggs in real-time, watch as its health slowly declined in
the face of insurmountable odds, notice the new Platinum-producing Pig making
headlines in town, acquire _that_ animal too, then sell what's left of the
goose to a local French bistro to make gold-encrusted foie gras for the same
someone to enjoy while watching House of Cards for the 3rd time on Netflix."

~~~
AceJohnny2
That was oddly specific and disturbing. Well done!

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devmunchies
This was already HBOs plan before the merger was finalized (I interviewed
there a year ago)

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jrs95
They don’t necessarily have to ruin HBO in order to compete with Netflix. They
can expand HBO Now as a platform while allowing HBO to continue doing what
they do best.

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gamechangr
HBO is too great to be ruined by AT&T.

Wiki says "HBO is the oldest and longest continuously operating pay television
service (basic or premium) in the United States".

I'm not under estimating HBO. like the rest of the fear mongering I hear from
my friends :)

AT&T doesn't' have what it takes to ruin it.

~~~
karcass
I dunno man. The Russians impoverished East Germany.

~~~
barry-cotter
East Germany was the richest Soviet conquest and the richest ex-Soviet bloc
state at the dissolution of the Soviet empire. Coming close to keeping up with
West Germany is pretty good for a Communist state.

~~~
WillPostForFood
Richest ex-Soviet Bloc state is like healthiest terminally ill patient.
Comparing East Germany to West seems more “germane.”

~~~
diogenescynic
You’re both right.

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zjaffee
AT&T owns a ton of content through owning Warner Media
[https://en.wikipedia.org/wiki/List_of_assets_owned_by_Warner...](https://en.wikipedia.org/wiki/List_of_assets_owned_by_WarnerMedia)
and my guess is that they will be able to show that content on netflix. At
least from my perspective, netflix has become a less desirable place to spend
time on, given that they have taken down a lot of their third party content,
something that AT&T and HBO will likely be able to resurface.

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SubiculumCode
I get HBO, binge on the new show, then cancel after a month. They have some
good content, but not enough to keep me paying $10+ or whatever each month.

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jasonlotito
This was discussed by my friends and myself earlier today. The general
sentiment is it's going to be interesting watching how AT&T burns HBO to the
ground and ruins it. The attitude and what came out of that meeting made none
of us feel good about the acquisition, and pretty much hands down people are
ready to just unsubscribe once it seems like quality drops.

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homero
HBO is incredible. Sharp objects with Amy Adams just premiered last night.
AT&T is going to ruin it.

~~~
wolco
I subscribed recently and watched silicon valley, entourage, ballers, veep and
watching the wire now. What do you recommend, as most of the other series I
haven't heard much about them and hbo shows for some reason seem a little bit
harder to get started with.

~~~
adzm
Sopranos, Westworld, Six Feet Under, Curb Your Enthusiasm

~~~
kjksf
Sopranos, Curb Your Enthusiasm, Six Feet Under, Sex And the City and The Wire
are currently "free" in Amazon Prime.

At some point those licenses will expire but this illustrates the "innovator's
dilemma" as applied to HBO.

They have a good business of selling cable subscriptions for new stuff,
licensing their past shows to Amazon, Hulu and other willing buyers and
selling on-demand access via Apple, Amazon etc.

Now they need to compete with Netlifx, which has a large catalog of licensed,
popular shows from all over and their own exclusive content.

To compete with that HBO would have to drop revenue from licensing (there's
less reasons to pay for HBO if I can get a lot of their good stuff elsewhere)

Their cable subscriptions are probably going to decline no matter what. Cable
subscriber count is on a steady, 6 year decline
([http://www.businessinsider.com/cable-tv-subscriber-
losses-q2...](http://www.businessinsider.com/cable-tv-subscriber-
losses-q2-chart-2017-6)) despite being propped by internet + cable bundles.

That decline is accelerating i.e. every year more people are cancelling cable
as a percentage. If that continues, it'll be a bloodbath. If the decline stops
accelerating, it'll still be bloodbath, just later. I don't see a scenario in
which cable starts growing again.

Netlifx model is easy to explain but almost impossible to replicate.

The model is: get so many subscribers from all over the world paying you
relatively small amount that you'll be able to outspend any other company in
quantity of TV/movie exclusive content, thus making it even more likely to get
new subscribers.

This is "rich get richer" model and Netflix is already the richest.

People will be willing to buy 2-3 such subscriptions so that's how many
winning slots there are.

So HBO better fight hard for that 2nd or 3rd position, but unfortunately just
like BlockBuster or Borders had a good business until they didn't, HBO might
not do enough to compete.

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softwaredoug
Funny it seems Netflix has been doing everything it can to be HBO! (And that’s
a good thing!)

~~~
thirdsun
It needs to try harder. I'm still waiting for anything coming close to The
Wire or The Sopranos.

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brisance
Interesting that neither the article nor a single comment mentioned AT&T's
efforts to undermine net neutrality. That would be their ace up the sleeve.
And they can get away with it because this administration is corrupt to the
core.

~~~
everybodyknows
With its position as ISP, AT&T can make trouble for Netflix content delivery.

And they know how. Remember all those independent DSL providers, back around
the millennium? I had one for years, then intermittent failures set in. After
months of debugging, the cause was traced to misconfigured AT&T equipment in
the local office.

It's as easy and untraceable as deprioritizing Netflix-sensitive operations
tasks.

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dec0dedab0de
I think George Carlin's death hurt HBO more than anything. That is to say if
they were still the home of stand-up comedy they might still be cool. They
really dropped the ball on that.

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lawl
> HBO NOW is only supported in the U.S. and select U.S. territories.

Oh yeah, I still have to pirate the HBO shows I want to watch. Even the
Netflix catalogue seems to be shrinking rather than growing here outside of
the US. Apparently you can get Netflix to show more stuff here by changing the
language on the web interface because they only show me stuff that has dubs
for my language. Can't do that in-app though.

Uh, hello, I understand English well enough to be able to watch your fucking
show in English, why does my room mate have to call your support to figure
this out?

So now they want to turn HBO which is even worse than Netflix into Netflix?
Cool, I'll still be pirating.

 _yawn_

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matte_black
Can someone explain why it’s obviously doomed?

~~~
MBCook
They bought a niche diamond mine and want it to be a giant aluminum recycling
company.

HBO makes a few REALLY good series. That’s what they do. They are not setup to
produce 10x as much content. If they do they may not have the people who can
do that with reasonable quality. They’re used to polishing gems.

You wouldn’t buy Nintendo and order them to make a console more powerful than
the XBox One X. That’s not what they do.

This probably won’t go well.

~~~
tptacek
HBO doesn't make money by producing _really good series_. They make money by
producing series that get people attached, to pay them for years at a time.
Bored To Death might have been a fine show, but to a first approximation
nobody signed up for HBO just to see it. They can churn out Vice Principals
and Barry's and Young Popes, but if they can't reliably keep a Game Of Thrones
or (bleh) True Blood in the pipeline, they'll have a hard time justifying
their cost.

~~~
drawkbox
Silicon Valley and Curb Your Enthusiasm aren't mentioned enough and a big
reason I subscribe.

HBO used to be the pinnacle of stand-up shows, but Netflix has taken that
torch now it seems.

For comedy series they do well though. Curb, Silicon Valley, VEEP, Last Week
Tonight, Eastbound & Down, and back in the day Larry Sanders, Mr. Show, Ali G
and more.

They always deliver with great shows non-comedy as well: Band of Brothers,
Boardwalk Empire, The Wire, Sopranos, The Night Of, GoT, Big Little Lies, True
Detective and on and on, hard to find this level of quality and creator
freedom that allows that. Netflix definitely giving HBO a run for their money
in quality and creator freedom, hard to imagine AT&T even giving creators the
level of control HBO and Netflix have.

~~~
tptacek
They might be why _you_ subscribe (and I like Silicon Valley, too) but they're
not why customers in general subscribe. True Blood had something like 6x as
many viewers as Silicon Valley (this is what I mean when I say HBO's business
isn't really "quality" so much as stickiness); for Game of Thrones, it's more
like 12x.

But also, you can't look at those shows in isolation. Compare them to
Netflix's properties. Stranger Things is as big a deal as literally anything
HBO has launched in the last decade, including Game of Thrones (I really want
to believe that HBO is kicking themselves for not buying the script for that;
it was shopped to them). For any given HBO 30 minute comedy, Netflix has
probably launched 3 equally credible comedies.

The very best, most important 60-minute scripted dramas in the past decade
have not as a rule, with the exception of Game of Thrones, been on HBO. If AMC
can do Mad Men and FX can do The Americans, there is no reason to believe that
Netflix can't do equally well just by pouring investor dollars into acquiring
shows. At the end of the day, that's what these businesses do: pick production
companies to fund, fund them, and then distribute the results.

~~~
greedo
The Wire. Arguably one of the best dramas ever created. The Sopranos.
Deadwood. Carnivale.

You're avoiding some incredible shows.

~~~
tptacek
OITNB is a Netflix show, which makes my point for me.

Season 5 of The Wire was just about a decade ago, and it was abbreviated
because it didn't get great ratings.

Carnivale was cancelled for low ratings after its second season. I'm not
saying it's bad (it was a mess, though). I'm saying that HBO has to do _more
things like Carnivale_ , on a much faster schedule, if it's going to keep up
with Netflix.

~~~
kasey_junk
If you say another single bad thing about Carnivale we go to war...

~~~
tptacek
It's _fine_. It's much better than John from Cincinnati or Luck or Vinyl was.
I enjoyed it more than I enjoyed Boardwalk Empire.

~~~
kasey_junk
War I say.

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kisstheblade
And then HBO makes a show like Westworld, i.e. low quality of shows and low
amount, what a winning strategy :)

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watertom
Netflix is as agile as they come.

AT&T needs a crooked FCC to pass laws in order to make their exiting business
model viable, and they have something everyone needs Internet and Cell phone,
and they are basically only 1 of 4 players.

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forapurpose
I've wondered about HBO's future. I see a few problems:

First, it used to be the only source for intelligent programming. Now I can
get as good or better content from Netflix, Amazon, and smaller arthouse-
oriented channels. HBO doesn't stand out to me.

Second, streaming channels are a la carte, not bundled, and I'd have to pay
cable TV-sized bills to subscribe to 100 channels. HBO doesn't seem to offer
enough to be worth a separate subscription.

Finally, the lack of an integrated listing UI means that I have to open the
HBO channel to see what's playing there. It's rarely worth the effort with so
many other options that have more content.

~~~
throwawaymath
I guess this is a matter of opinion, but I’ll bite anyway. What content do you
watch from Netflix or Amazon that you find to be comparable to HBO’s tentpole
programming?

To be honest with you, I find Amazon’s content to be...well, bad. On the other
hand Netflix has a few good shows, but the company is clearly prioritizing
quantity over quality. Not only does its content not have the awards or
acclaim HBO’s garners, but it just churns out forgettable movie after
forgettable movie. A lot of Netflix’s content is becoming the new “direct to
TV” movie.

HBO’s approach is to produce character-driven and thought-provoking
programming which is ahead of the curve. That’s not everyone’s cup of tea when
it comes to entertainment, but they naturally achieve greater critical acclaim
and cult status. It’s hard to think of a way most of Netflix or Amazon’s
content can be compared to HBO’s except, “It’s entertaining.” In what way do
you see Netflix or Amazon innovating? For what definition of “good” do you
find your favorite Netflix and Amazon shows comparing favorably with HBO’s?

For a while I held high hopes of Netflix becoming a new HBO because _House of
Cards_ was exceptional. But they didn’t exactly make that a trend. And while
we’re on the subject of UI, Netflix is so hellbent on having me binge watch
the day away that I can’t hover over a title for more than 1 second without it
blaring a crappy trailer at me. The native Netflix experience (LG TV, AppleTV)
has me scurrying from title to title like a mad squirrel hoping to read a
description without triggering the trailer.

~~~
SquirrelOnFire
House of Cards (First 2 seasons at least), Stranger Things, Orange is the New
Black, Marco Polo, Unbreakable Kimmy Schmidt, Dear White People, Bojack
Horseman, and to a lesser extent some of the Marvel shows (Jessica Jones,
Daredevil, Luke Cage, Punisher), not to mention how much amazing standup
comedy Netflix puts out. Sure, there's a lot of junk, but Netflix is
succeeding in becoming HBO faster than HBO is becoming Netflix.

~~~
throwawaymath
I'll give you the standup comedy selection because I agree it's really quite
good. I also like Stranger Things but can't comment on the others. But I
actively dislike the Marvel content on Netflix. I find its characters one-
dimensional and its plot unmotivated. Some of this is probably the transition
from comic books to TV, but on the other hand I love almost everything from
the cinematic universe.

I think the biggest problem is that the Marvel cinematic universe seems to
have better acting, better writing, superior interconnectedness overall and
stakes that are well calibrated to its cast of heroes. In contrast, I find
most of the characters' hyperfocus on specific neighborhoods in Marvel's
Netflix shows to be frankly ridiculous and annoying. I also find myself
wishing the main characters would just kill the villains a few episodes into
each series. It boggles my mind how much waffling and angst goes on.

As a followup to your last comment though, my point had nothing to do with HBO
becoming Netflix. I don't even think HBO should try to become Netflix at all.
I would prefer for HBO to remain the curated content space that it is,
precisely because I'm concerned with the quality of content. Strictly
speaking, the ratio of quality content to junk on HBO is far, far higher than
Netflix's. It's not really about HBO or Netflix being more successful in
becoming the other, it's about quality. Regardless of whether or not HBO is
close to becoming Netflix, Netflix is so far from becoming HBO I don't even
think they could recognize an interstate map outlining the route.

~~~
siidooloo
HBO and Netflix both produce a couple of dozen shows a year. HBO seems like it
has a better hit ratio because you have to go back every week to get an update
on the one or two current shows you enjoy. HBO has a better presentation for
appearing prestige.

~~~
throwawaymath
No, I disagree strongly. I don't binge Netflix and I still feel the same way.

~~~
siidooloo
Do you watch 24 different HBO shows a year, or do you watch 4 or 5?

~~~
throwawaymath
Four or five, but I don't really follow what you mean. I sit through maybe 10
pilots on Netflix that don't motivate me to watch the entire season. The last
time I tried and failed to get into an HBO show was with _Succession_ (in my
opinion that show is exceptionally bad). Before that I can't recall. But on
Amazon I churned off of literally everything, and on Netflix it takes me at
least five duds (that are apparently a strong match for me) to find something
I'll commit to. The only thing I think Netflix has really nailed is comedy,
and that's because their selection of comedy is actually _diverse and
comprehensive._ Conversely, a lot of their selection for traditional drama is
formulaic.

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esaym
I gave up on HBO 15+ years ago after every single new show they made was
nothing but a non stop stream of cuss words. Their only way to stand out just
seems to be by bringing new levels of raunchiness to the viewer, and that gets
old.

~~~
PhantomGremlin
How do you make a show like The Sopranos without cuss words? Not too many
mobsters earn an Eagle Scout medal.

And if you tell me that The Sopranos wasn't realistic, I'd say you weren't
paying attention to the news in the NYC metropolitan area. Many/most of the
show's plots were, at the least, "inspired by actual events".

You can always watch the Hallmark Channel on basic cable. Not too many cuss
words there.

~~~
jstarfish
Eh, I dont know what the OP had in mind, but I've watched all the big HBO
shows and the only one that was unwatchable specifically due to profanity was
Deadwood.

Whatever story it had was absolutely drowned out by dialogue written by
prepubescent boys who just learned the word "fuck" for the first time.

