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

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.

waterlesscloud 14y ago
I do wonder if HBO isn't saying one thing to please their cable provider customers and doing quite another to forward their own goals.
Anechoic 14y ago
Meanwhile, AMC is making TV that's just as good with a business model that embraces cort-cutters. And is currently at war with DishTV. It's a matter if the cord cutters can replace the revenue lost from traditional markets if the cable/satellite provides go nuclear.
bradleyland 14y ago
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 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 14y ago
  I hope you're right. I think this is the best argument for their actions to date.

waterlesscloud 14y ago

I do wonder if HBO isn't saying one thing to please their cable provider customers and doing quite another to forward their own goals.

Anechoic 14y ago

Meanwhile, AMC is making TV that's just as good with a business model that embraces cort-cutters. And is currently at war with DishTV. It's a matter if the cord cutters can replace the revenue lost from traditional markets if the cable/satellite provides go nuclear.

bradleyland 14y ago

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 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 14y ago
I hope you're right. I think this is the best argument for their actions to date.