7 ms·

HBO Ignores Internet Geniuses, Sells More HBO

70 points by cremnob 14y ago

dinkumthinkum 14y ago
I know it seems crazy to some of you but some people like to watch cable TV. We can shout HBO GO until we're blue in the face, there's not that many shows on it, really. There are arguably great shows on HBO Go but it's not that many and most of the seasons for each show are like 8 episodes long, great! Netflix .. really? OK, I get that is fashionable and everything but I don't ever see any data to back up that cable TV is done. Also, as an aside, why is it so fashionable anyway? There's just all this pride of like "I haven't had cable or satelite in 6 years" or the "last time I had a cable was when Cheers was on but I turned it off and watched an interpretive dance instead."
- MartinCron 14y ago
  Also, as an aside, why is it so fashionable anyway? I think it's multifaceted and varies from person to person. I gave up cable for the same reason that a lot of people give up drinking... I couldn't handle it responsibly. I hit bottom, thinking "I've only seen this episode of 'Friends' a few times already, I'll watch this". So in order to keep from feeling like the TV is the default center of my life, I had to remove it.
kevinh 14y ago
So because HBO is selling more subscriptions to HBO (due to having one of the most popular shows available), they're doing as well as they possibly can? That seems like it's ignoring all of the customers they could pick up and are sweeping aside as irrelevant. Everything that Bewkes says indicates that he has preconceived notions of what he wants his business model to be. I would be very surprised if he wasn't cherry-picking data to meet his hypothesis. It's not very surprising that the CEO of a television conglomerate is sticking with forcing people to get cable subscriptions - that's probably better for Time Warner's bottom line, not HBO's.
- mtgx 14y ago
  When you get disrupted never wait until your financials start looking bad because of the disruption. At that point you're already too late to turn the company around, because it takes a few more years to do it, and you're quickly running out of time. Look at RIM. They were breaking sales record after sales record up until 2010, because of brand inertia in the international markets. So they thought things are just fine because the financials look good. But that's not what they should look for when they get disrupted. They find out if their products/services actually make sense in the new "era". If they don't, then it's just a matter of time before the financials start looking bad, too, as the world moves on.
sp332 14y ago
Remember one huge thing in this equation: HBO doesn't deal with subscribers! HBO has no subscriber database, hardly any customer support, no sensitive personally identifiable data to keep track of. The cable and satellite companies have to deal with all of that. That's why HBO isn't really interested in selling direct to subscribers.
- wmf 14y ago
  Of course, a deal with Hulu, Netflix, or Amazon wouldn't be selling direct either.
- MartinCron 14y ago
  I'm confident that starting from scratch with modern technology, HBO could build a customer service infrastructure that would easily surpass the low quality bar set by the cable companies.
aidenn0 14y ago
I seem to say this a lot, but don't forget that HBO doesn't pay for most of its advertising right now. Go into the lobby of any Cable store, or watch any add for cable in the US and at least one HBO show (or HBO by name) will be mentioned. This is all free advertising for them.
- AjithAntony 14y ago
  Probably far more complicated than that. If HBO receives $8 of a $20 subscription, and the cable company got $12, is the marketing that the cable company does free?
727374 14y ago
Just because HBO could pick up customers by offering their service on the internet doesn't mean they'd increase profits as their other revenue streams could be cannibalized - DVD/iTunes/Amazon sales, cable subscriptions, etc. My guess is that they have a team of smart finance people with a model that shows it's not worth it to offer an internet only service.
- MartinCron 14y ago
  And, once the smart finance people's model shows that it is worth it to offer an internet-only service, they'll be ready. How difficult would it be to authenticate HBO Go clients against their own service rather than the cable company's? I think the predictions of HBO's RIM-esque decline don't make sense, they know what they're doing.
thornofmight 14y ago
Why does everyone want to pay for HBO Go so much? Has anyone actually used it? I have, and it's absolutely horrible on both Mac and PC in any browser. It skips often, horrible picture quality, weird colors, not to mention a bad interface for finding and watching. I just recently got the iPhone HBO Go app and it's awesome, never skips, crystal clear quality, easy to use. Why the enormous difference? Am I the only person experiencing this?
- efsavage 14y ago
  I watched most of game of thrones on PC (in a VM no less) and it was flawless. My only peeve with the UI is that there isn't a "next episode" button when watching a series.
gamble 14y ago
Reminds me of a few years ago, when many pundits were still poo-poo'ing criticisms of RIM and Nokia, because - hey, they're still selling tons of product to existing markets! Who cares if they're not considered cool by those weirdo iPhone/Android early adopters?
xbryanx 14y ago
Reminds me of a favorite aphorism. Data is not the plural of anecdote. In this case the anecdote of, me and my circle are getting rid of cable, everyone must be.
- notatoad 14y ago
  That's a nice saying, but it really doesn't have anything to do with anything. Yes, current data says that people still buy cable subscriptions, but that doesn't mean the trend will continue. Things change, and looking at data and expecting any patterns you see to exist perpetually is just as bad as citing anecdotes as though they were statistics.
- RyanIyengar 14y ago
  The comments are a perfect case study on this. Your data must be wrong, since me and one other guy BOTH don't match it! Hah!
SwellJoe 14y ago
Classic Innovator's Dilemma. By the time the numbers are right for HBO to move forward, it will be too late. They're right to make this choice for profits this year, and maybe next, and maybe even the year after that. But, if they want to be relevant in ten years, the changes need to be happening now. Otherwise, other players will come in under them and simply eat their lunch. They'll have no idea what hit them. I don't know who those players will be (Netflix seems a likely candidate, which is why some of the cable and movie companies have targeted them for retributive licensing deals or simply refuse to license), but they will come...because there's billions of dollars at stake, and there's always someone willing to work really hard on a billion dollar problem. They're feeling pretty infallible right now, due to a slate of popular shows and a strong subscriber base. But, things change. And, with the Internet, things change faster than ever before.
- cremnob 14y ago
  What makes you think they won't be relevant in 10 years? They're not a distribution company like Netflix, Amazon or the cable companies. They have no direct relationship with subscribers. They don't deal with the marketing to customers, distribution or billing systems. They produce amazing original content, and the cable companies pay big money for it. So until Netflix, Amazon, Apple, etc. have the viewers that would warrant paying HBO the incredible amount of money they currently get, it's in their best interest to stick with the cable companies. Even if cord-cutting had a material impact on the cable companies (and there doesn't seem to be any evidence of that), HBO would have no problem getting their content on the next-gen distributors. The armchair television executives have been amusing ever since this became a story, and I think it's because they don't understand their business model. Or like MartinCron said, they just can't get over that what's best for HBO isn't aligning with their own self-interest. I'm also not sure if people are really thinking this through to the logical end. HBO is great because they don't have to consider ratings or cater to viewers' tastes. That would all change if they were responsible for getting people to pay for HBO GO.
  - SwellJoe 14y ago
    I don't know that they won't. They may have all the pieces in place to move fast when the time comes. But, I know that other content is coming into existence outside of the old models (Arrested Development new episodes are being developed by and exclusively for Netflix, for example). Of course, history would indicate that new entertainments do not necessarily displace old ones. Cable didn't displace broadcast (though it did slow the growth of broadcast and make a few of the less efficient operators either shape up or get bought up). VHS didn't kill theaters or cable movie channels, but it did raise the bar (it triggered some of the stuff you're talking about being the unique value of HBO; HBO was not always an original content provider). But, I believe there's plenty of growth opportunities that HBO is currently missing.
naner 14y ago
My brother subscribes to HBO solely for Game of Thrones. And then he drops the subscription after each season is over. I wonder how common that behavior is.
- dsr_ 14y ago
  And HBO announces adds separately from drops, so your brother makes them grow once a year and shrink once a year.
- efsavage 14y ago
  We're pretty ruthless about adding/dropping HBO/showtime as series are on/off the air, and usually only if there is more than one interesting series running concurrently. There's really no value to these networks other than the series, I could rent the few movies worth seeing on amazon or redbox for less than the fee.
rnambiar 14y ago
I used to be on the side of wanting HBO to give an a-la carte. Heck, i don't want regular cable TV, i want to watch only HBO shows. But i remember talking to a person more experienced in the area explain the system. HBO gets quite a cut from cable companies to have their channels on their lineup. cable providers subsidize HBO so more people can get their cable. If HBO cut all that money an a la carte option would probably cost more, maybe $25. At that point would people who have been asking for this option pay for it? One option is to have some online distributor like netflix or hulu cut that cost but i guess HBO hasn't found that option appealing. All i'm trying to say is I think HBO is making the most amount of money right now without angering their cable partners. And from the looks of this article they are growing quite a bit. I think once the cable cutting market becomes bigger and more appealing, i don't see why HBO can't switch lanes. Their product will still sell because their content is good (which is why HBO is doing so well in the first place).
purpl3p3rs0n 14y ago
Interview at VideoSchmooze with Eric Kessler on HBO GO's business model. http://videonuze.com/article/video-interview-hbo-co-president-eric-kessler-at-videoschmooze http://videonuze.com/article/video-interview-hbo-co-presiden...
pyre 14y ago
Once cable subscriptions start declining HBO will be in the position of power. The cable operators seem to feel that having the option of an HBO subscription on their network helps them to get/retain customers. If they are having issues with customers jumping ship, I would imagine that it would happen even faster if they dropped the HBO option from their line-up as retribution for HBO pushing their own streaming video offering (or teaming up with Netflix/Hulu/etc). From the customer's point-of-view, the lack of HBO would be another negative against the cable operator, and positive in favor of 'cutting the cord.' That said, I definitely think that HBO should not rest on its laurels. They should be exploring these options, even if they aren't ready to execute on them yet. [Note: all of this assumes that HBO continues to produce excellent/desirable content]
dknutsen 14y ago
This isn't necessarily the whole story though. HBO also had the most pirated show of the first half of the year (Game of Thrones), possibly the whole year. Imagine how much greater their subscription numbers might be if they did offer some sort of HBO Go only plan. I would certainly be interested (and I have no intention of ever subscribing to the current cable service).
- Steko 14y ago
  Look I sympathize, I'm one of the people without cable who would buy HBO Go standalone but there aren't really that many of us. Most of the people pirating GoT are people who (1) have cable and don't want to pay for HBO or (2) have cable and already pay for HBO but just want to watch it whenever/not wait for the long delayed DVD release. One sign of cord cutter growth might be an emerging black market of people selling the use of their HBO subscriptions to people who want to stream the content.
  - bicknergseng 14y ago
    Your making a lot of assumptions with no reasoning to back it up...
  - NoPiece 14y ago
    Netflix has 26 million streaming subscribers (via Mashable in April http://mashable.com/2012/04/23/netflix-26m-subscribers/ http://mashable.com/2012/04/23/netflix-26m-subscribers/), HBO has 29 million cable subscribers (via wikipedia - http://en.wikipedia.org/wiki/HBO http://en.wikipedia.org/wiki/HBO) The streaming space may not be as profitable for HBO, but I don't think it is a problem that there aren't many of us that would want it standalone.
    - Steko 14y ago
      There's really no telling how many Netflix people also have cable. I'm guessing a lot. In my state, 95% of the population has cable and I'm guessing a fair number of the other 5% are poor, ok with just broadcast or don't even have a tv (or watch it) for various reasons. Sure there's some like me but what 1%? Nationwide the number with cable is closer to 88%-90% I think but we're still talking 1-3% for cord cutters of which only a fraction are going to be paying for HBO.
crazygringo 14y ago
> "But the whole idea that there’s a lot of people out there that want to drop multichannel TV, and just have a Netflix or an HBO — that’s not right. Look for the data, you won’t find them." Well, what is the data then? Don't say it doesn't exist, tell me what the actual numbers are. I know I don't have "multichannel TV" but would pay for HBO+Netflix. Now I'm actually kind of curious what percentage of Americans feel the same way.
- majormajor 14y ago
  Here's one source, though I don't think anyone's ever accused Nielsen of being particularly scientific... http://blog.nielsen.com/nielsenwire/media_entertainment/i-want-my-iptv/ http://blog.nielsen.com/nielsenwire/media_entertainment/i-wa... "Americans spend 35 hours each week watching content across screens, and 94 percent of that is still on a traditional television." (This isn't exactly the same as people who for-sure don't "want to" drop traditional TV, but my suspicion is that anyone consuming 35 hours (!!) a week needs the 100-channels-24-7 stream of traditional cable or satellite to sate them. Pay-as-you-go has a way to go before it's cost-effective compared to that.)
- jsz0 14y ago
  I would suggest looking at Comcast's subscriber numbers they release with their quarterly earnings. They are still gaining subscribers. I'm not sure they have recovered to pre-recession levels yet. Employment & housing have such a huge impact on the cable industry it's hard to decouple the data. You could argue the subscriber drops of previous years were due to IP video but now that the numbers are on the rebound that seems unlikely unless people switched to IP video exclusively and found it to be inadequate. It's also important to look at Comcast (and others) own IP video solutions which are not talked about a lot but may fill the void that would otherwise send customers into IP-only solutions. If you have Comcast and you want to watch TV on your iPad the easiest way is to just use the XFINITY TV app. The cable MSOs were very slow to take IP video seriously but, IMO, they are in much better shape now. I'm sure HBO is aware of this too. They are betting that bundled linear/IP services are going to be the way most customers consume media.
  - 14y ago
michaelmior 14y ago
The title of this made it sound like it would link to The Onion.
kemiller 14y ago
So the issue here is that there are people who pay for cable (C), and people who don't pay for cable (!C). There are also people who would, all things being equal, pay for HBO (H), and people who would not (!H). It sounds like he is saying that C ∩ H is larger and/or more profitable than !C ∩ H, at least for now. And that catering to the latter would cannibalize more than it is worth. That is probably true, if short-sighted. I wonder how hard it would be to undercut them and go for the small, but possibly growing !C market. I'm guessing pretty hard.
- deleted 14y ago
  [deleted]
abalone 14y ago
Love the title, but that is a really poor argument. "There's no data that people want HBO without multichannel TV." Maybe that's because HBO isn't available any other way?

70 points by cremnob 14y ago

I know it seems crazy to some of you but some people like to watch cable TV. We can shout HBO GO until we're blue in the face, there's not that many shows on it, really. There are arguably great shows on HBO Go but it's not that many and most of the seasons for each show are like 8 episodes long, great! Netflix .. really? OK, I get that is fashionable and everything but I don't ever see any data to back up that cable TV is done. Also, as an aside, why is it so fashionable anyway? There's just all this pride of like "I haven't had cable or satelite in 6 years" or the "last time I had a cable was when Cheers was on but I turned it off and watched an interpretive dance instead."

MartinCron 14y ago
Also, as an aside, why is it so fashionable anyway? I think it's multifaceted and varies from person to person. I gave up cable for the same reason that a lot of people give up drinking... I couldn't handle it responsibly. I hit bottom, thinking "I've only seen this episode of 'Friends' a few times already, I'll watch this". So in order to keep from feeling like the TV is the default center of my life, I had to remove it.

kevinh 14y ago

So because HBO is selling more subscriptions to HBO (due to having one of the most popular shows available), they're doing as well as they possibly can? That seems like it's ignoring all of the customers they could pick up and are sweeping aside as irrelevant. Everything that Bewkes says indicates that he has preconceived notions of what he wants his business model to be. I would be very surprised if he wasn't cherry-picking data to meet his hypothesis. It's not very surprising that the CEO of a television conglomerate is sticking with forcing people to get cable subscriptions - that's probably better for Time Warner's bottom line, not HBO's.

mtgx 14y ago
When you get disrupted never wait until your financials start looking bad because of the disruption. At that point you're already too late to turn the company around, because it takes a few more years to do it, and you're quickly running out of time. Look at RIM. They were breaking sales record after sales record up until 2010, because of brand inertia in the international markets. So they thought things are just fine because the financials look good. But that's not what they should look for when they get disrupted. They find out if their products/services actually make sense in the new "era". If they don't, then it's just a matter of time before the financials start looking bad, too, as the world moves on.

sp332 14y ago

Remember one huge thing in this equation: HBO doesn't deal with subscribers! HBO has no subscriber database, hardly any customer support, no sensitive personally identifiable data to keep track of. The cable and satellite companies have to deal with all of that. That's why HBO isn't really interested in selling direct to subscribers.

wmf 14y ago
Of course, a deal with Hulu, Netflix, or Amazon wouldn't be selling direct either.
MartinCron 14y ago
I'm confident that starting from scratch with modern technology, HBO could build a customer service infrastructure that would easily surpass the low quality bar set by the cable companies.

aidenn0 14y ago

I seem to say this a lot, but don't forget that HBO doesn't pay for most of its advertising right now. Go into the lobby of any Cable store, or watch any add for cable in the US and at least one HBO show (or HBO by name) will be mentioned. This is all free advertising for them.

AjithAntony 14y ago
Probably far more complicated than that. If HBO receives $8 of a $20 subscription, and the cable company got $12, is the marketing that the cable company does free?

727374 14y ago

Just because HBO could pick up customers by offering their service on the internet doesn't mean they'd increase profits as their other revenue streams could be cannibalized - DVD/iTunes/Amazon sales, cable subscriptions, etc. My guess is that they have a team of smart finance people with a model that shows it's not worth it to offer an internet only service.

MartinCron 14y ago
And, once the smart finance people's model shows that it is worth it to offer an internet-only service, they'll be ready. How difficult would it be to authenticate HBO Go clients against their own service rather than the cable company's? I think the predictions of HBO's RIM-esque decline don't make sense, they know what they're doing.

thornofmight 14y ago

Why does everyone want to pay for HBO Go so much? Has anyone actually used it? I have, and it's absolutely horrible on both Mac and PC in any browser. It skips often, horrible picture quality, weird colors, not to mention a bad interface for finding and watching. I just recently got the iPhone HBO Go app and it's awesome, never skips, crystal clear quality, easy to use. Why the enormous difference? Am I the only person experiencing this?

efsavage 14y ago
I watched most of game of thrones on PC (in a VM no less) and it was flawless. My only peeve with the UI is that there isn't a "next episode" button when watching a series.

gamble 14y ago

Reminds me of a few years ago, when many pundits were still poo-poo'ing criticisms of RIM and Nokia, because - hey, they're still selling tons of product to existing markets! Who cares if they're not considered cool by those weirdo iPhone/Android early adopters?

xbryanx 14y ago

Reminds me of a favorite aphorism. Data is not the plural of anecdote. In this case the anecdote of, me and my circle are getting rid of cable, everyone must be.

notatoad 14y ago
That's a nice saying, but it really doesn't have anything to do with anything. Yes, current data says that people still buy cable subscriptions, but that doesn't mean the trend will continue. Things change, and looking at data and expecting any patterns you see to exist perpetually is just as bad as citing anecdotes as though they were statistics.
RyanIyengar 14y ago
The comments are a perfect case study on this. Your data must be wrong, since me and one other guy BOTH don't match it! Hah!

SwellJoe 14y ago

Classic Innovator's Dilemma. By the time the numbers are right for HBO to move forward, it will be too late. They're right to make this choice for profits this year, and maybe next, and maybe even the year after that. But, if they want to be relevant in ten years, the changes need to be happening now. Otherwise, other players will come in under them and simply eat their lunch. They'll have no idea what hit them. I don't know who those players will be (Netflix seems a likely candidate, which is why some of the cable and movie companies have targeted them for retributive licensing deals or simply refuse to license), but they will come...because there's billions of dollars at stake, and there's always someone willing to work really hard on a billion dollar problem. They're feeling pretty infallible right now, due to a slate of popular shows and a strong subscriber base. But, things change. And, with the Internet, things change faster than ever before.

cremnob 14y ago
What makes you think they won't be relevant in 10 years? They're not a distribution company like Netflix, Amazon or the cable companies. They have no direct relationship with subscribers. They don't deal with the marketing to customers, distribution or billing systems. They produce amazing original content, and the cable companies pay big money for it. So until Netflix, Amazon, Apple, etc. have the viewers that would warrant paying HBO the incredible amount of money they currently get, it's in their best interest to stick with the cable companies. Even if cord-cutting had a material impact on the cable companies (and there doesn't seem to be any evidence of that), HBO would have no problem getting their content on the next-gen distributors. The armchair television executives have been amusing ever since this became a story, and I think it's because they don't understand their business model. Or like MartinCron said, they just can't get over that what's best for HBO isn't aligning with their own self-interest. I'm also not sure if people are really thinking this through to the logical end. HBO is great because they don't have to consider ratings or cater to viewers' tastes. That would all change if they were responsible for getting people to pay for HBO GO.
- SwellJoe 14y ago
  I don't know that they won't. They may have all the pieces in place to move fast when the time comes. But, I know that other content is coming into existence outside of the old models (Arrested Development new episodes are being developed by and exclusively for Netflix, for example). Of course, history would indicate that new entertainments do not necessarily displace old ones. Cable didn't displace broadcast (though it did slow the growth of broadcast and make a few of the less efficient operators either shape up or get bought up). VHS didn't kill theaters or cable movie channels, but it did raise the bar (it triggered some of the stuff you're talking about being the unique value of HBO; HBO was not always an original content provider). But, I believe there's plenty of growth opportunities that HBO is currently missing.

naner 14y ago

My brother subscribes to HBO solely for Game of Thrones. And then he drops the subscription after each season is over. I wonder how common that behavior is.

dsr_ 14y ago
And HBO announces adds separately from drops, so your brother makes them grow once a year and shrink once a year.
efsavage 14y ago
We're pretty ruthless about adding/dropping HBO/showtime as series are on/off the air, and usually only if there is more than one interesting series running concurrently. There's really no value to these networks other than the series, I could rent the few movies worth seeing on amazon or redbox for less than the fee.

rnambiar 14y ago

I used to be on the side of wanting HBO to give an a-la carte. Heck, i don't want regular cable TV, i want to watch only HBO shows. But i remember talking to a person more experienced in the area explain the system. HBO gets quite a cut from cable companies to have their channels on their lineup. cable providers subsidize HBO so more people can get their cable. If HBO cut all that money an a la carte option would probably cost more, maybe $25. At that point would people who have been asking for this option pay for it? One option is to have some online distributor like netflix or hulu cut that cost but i guess HBO hasn't found that option appealing. All i'm trying to say is I think HBO is making the most amount of money right now without angering their cable partners. And from the looks of this article they are growing quite a bit. I think once the cable cutting market becomes bigger and more appealing, i don't see why HBO can't switch lanes. Their product will still sell because their content is good (which is why HBO is doing so well in the first place).

purpl3p3rs0n 14y ago

Interview at VideoSchmooze with Eric Kessler on HBO GO's business model. http://videonuze.com/article/video-interview-hbo-co-president-eric-kessler-at-videoschmooze http://videonuze.com/article/video-interview-hbo-co-presiden...

pyre 14y ago

Once cable subscriptions start declining HBO will be in the position of power. The cable operators seem to feel that having the option of an HBO subscription on their network helps them to get/retain customers. If they are having issues with customers jumping ship, I would imagine that it would happen even faster if they dropped the HBO option from their line-up as retribution for HBO pushing their own streaming video offering (or teaming up with Netflix/Hulu/etc). From the customer's point-of-view, the lack of HBO would be another negative against the cable operator, and positive in favor of 'cutting the cord.' That said, I definitely think that HBO should not rest on its laurels. They should be exploring these options, even if they aren't ready to execute on them yet. [Note: all of this assumes that HBO continues to produce excellent/desirable content]

dknutsen 14y ago

This isn't necessarily the whole story though. HBO also had the most pirated show of the first half of the year (Game of Thrones), possibly the whole year. Imagine how much greater their subscription numbers might be if they did offer some sort of HBO Go only plan. I would certainly be interested (and I have no intention of ever subscribing to the current cable service).

Steko 14y ago
Look I sympathize, I'm one of the people without cable who would buy HBO Go standalone but there aren't really that many of us. Most of the people pirating GoT are people who (1) have cable and don't want to pay for HBO or (2) have cable and already pay for HBO but just want to watch it whenever/not wait for the long delayed DVD release. One sign of cord cutter growth might be an emerging black market of people selling the use of their HBO subscriptions to people who want to stream the content.
- bicknergseng 14y ago
  Your making a lot of assumptions with no reasoning to back it up...
- NoPiece 14y ago
  Netflix has 26 million streaming subscribers (via Mashable in April http://mashable.com/2012/04/23/netflix-26m-subscribers/ http://mashable.com/2012/04/23/netflix-26m-subscribers/), HBO has 29 million cable subscribers (via wikipedia - http://en.wikipedia.org/wiki/HBO http://en.wikipedia.org/wiki/HBO) The streaming space may not be as profitable for HBO, but I don't think it is a problem that there aren't many of us that would want it standalone.
  - Steko 14y ago
    There's really no telling how many Netflix people also have cable. I'm guessing a lot. In my state, 95% of the population has cable and I'm guessing a fair number of the other 5% are poor, ok with just broadcast or don't even have a tv (or watch it) for various reasons. Sure there's some like me but what 1%? Nationwide the number with cable is closer to 88%-90% I think but we're still talking 1-3% for cord cutters of which only a fraction are going to be paying for HBO.

crazygringo 14y ago

> "But the whole idea that there’s a lot of people out there that want to drop multichannel TV, and just have a Netflix or an HBO — that’s not right. Look for the data, you won’t find them." Well, what is the data then? Don't say it doesn't exist, tell me what the actual numbers are. I know I don't have "multichannel TV" but would pay for HBO+Netflix. Now I'm actually kind of curious what percentage of Americans feel the same way.

majormajor 14y ago
Here's one source, though I don't think anyone's ever accused Nielsen of being particularly scientific... http://blog.nielsen.com/nielsenwire/media_entertainment/i-want-my-iptv/ http://blog.nielsen.com/nielsenwire/media_entertainment/i-wa... "Americans spend 35 hours each week watching content across screens, and 94 percent of that is still on a traditional television." (This isn't exactly the same as people who for-sure don't "want to" drop traditional TV, but my suspicion is that anyone consuming 35 hours (!!) a week needs the 100-channels-24-7 stream of traditional cable or satellite to sate them. Pay-as-you-go has a way to go before it's cost-effective compared to that.)
jsz0 14y ago
I would suggest looking at Comcast's subscriber numbers they release with their quarterly earnings. They are still gaining subscribers. I'm not sure they have recovered to pre-recession levels yet. Employment & housing have such a huge impact on the cable industry it's hard to decouple the data. You could argue the subscriber drops of previous years were due to IP video but now that the numbers are on the rebound that seems unlikely unless people switched to IP video exclusively and found it to be inadequate. It's also important to look at Comcast (and others) own IP video solutions which are not talked about a lot but may fill the void that would otherwise send customers into IP-only solutions. If you have Comcast and you want to watch TV on your iPad the easiest way is to just use the XFINITY TV app. The cable MSOs were very slow to take IP video seriously but, IMO, they are in much better shape now. I'm sure HBO is aware of this too. They are betting that bundled linear/IP services are going to be the way most customers consume media.
- 14y ago

michaelmior 14y ago

The title of this made it sound like it would link to The Onion.

kemiller 14y ago

So the issue here is that there are people who pay for cable (C), and people who don't pay for cable (!C). There are also people who would, all things being equal, pay for HBO (H), and people who would not (!H). It sounds like he is saying that C ∩ H is larger and/or more profitable than !C ∩ H, at least for now. And that catering to the latter would cannibalize more than it is worth. That is probably true, if short-sighted. I wonder how hard it would be to undercut them and go for the small, but possibly growing !C market. I'm guessing pretty hard.

deleted 14y ago
[deleted]

abalone 14y ago

Love the title, but that is a really poor argument. "There's no data that people want HBO without multichannel TV." Maybe that's because HBO isn't available any other way?