4 ms·

"Piracy costs HBO less than ... " This depends on how risk averse one is. I personally would be afraid of getting on hit list for the movie association (can't

"Piracy costs HBO less than ... " This depends on how risk averse one is. I personally would be afraid of getting on hit list for the movie association (can't remember the acronym now).

tptacek 14y ago
I'm not sure you followed my comment (based on how you quoted it). The choice isn't between "piracy" and "no piracy". It's between: "a la carte access either to HBO Go or to individual episodes of GoT as they're released" and "access to episodes of GoT as they're released only via a subscription to a pay TV service with HBO". The latter business strategy demonstrably works for HBO today. The former strategy is not only unproven, but based on the math, unlikely to succeed.
- DigitalJack 14y ago
  you are right, for some reason I read "piracy costs less than HBO"
- btilly 14y ago
  Economic theory says that either a bundling or an a la carte pricing strategy can work on its own for information goods, but if some are doing one and others are doing the other, there will be a ruinous price war. See http://www.dtc.umn.edu/~odlyzko/doc/price.war.pdf http://www.dtc.umn.edu/~odlyzko/doc/price.war.pdf for details. Due to historical circumstance, the content providers are stuck on the bundling strategy. Consumers seem to prefer a la carte. Any startup that tries to deliver what consumers want, given established providers and the economic theory, is going to fail.
  - tptacek 14y ago
    That assumes that the cost structure to producing viable content is the same for a la carte providers and bundled providers. But the cost structure isn't the same. A la carte providers can invest in just a few high-quality titles, and the most compelling titles aren't necessarily the most expensive. Bundled pay-TV is also by design stuck with an expensive "spray and pray" model.
    - josephlord 14y ago
      But while cable has and needs billions of dollars of revenue they will offer billions for exclusive access to whatever content is deemed compelling (sports, Game of Thrones, HBO generally). A la carte providers just can't compete in the exclusive bidding war yet and the value of exclusivity is worth more than the incremental revenue of a la carte sales. There will be a point at which cable penetration could be small enough that these effects change but it has a long way to fall before it gets there. In the UK Sky has massive amounts of top class exclusive content on under 50% household penetration and they are still growing and strengthening their position.
      - tptacek 14y ago
        Do I have to concede that HBO and new a la carte content producers are in a bidding war? I don't follow this market that closely, but I follow it a bit, and the sense I get is that there's a threshold price at which any producer has a good shot at securing high-quality marketable content: good shows get cancelled, or never picked up at all, all the time.
        josephlord 14y ago
        Quite a lot of what we might regard as good content (with niche rather than mass appeal) could be helped by this but it won't free the big budget mega-hits any time soon.

"Piracy costs HBO less than ... " This depends on how risk averse one is. I personally would be afraid of getting on hit list for the movie association (can't remember the acronym now).

tptacek 14y ago

I'm not sure you followed my comment (based on how you quoted it). The choice isn't between "piracy" and "no piracy". It's between: "a la carte access either to HBO Go or to individual episodes of GoT as they're released" and "access to episodes of GoT as they're released only via a subscription to a pay TV service with HBO". The latter business strategy demonstrably works for HBO today. The former strategy is not only unproven, but based on the math, unlikely to succeed.

DigitalJack 14y ago
you are right, for some reason I read "piracy costs less than HBO"
btilly 14y ago
Economic theory says that either a bundling or an a la carte pricing strategy can work on its own for information goods, but if some are doing one and others are doing the other, there will be a ruinous price war. See http://www.dtc.umn.edu/~odlyzko/doc/price.war.pdf http://www.dtc.umn.edu/~odlyzko/doc/price.war.pdf for details. Due to historical circumstance, the content providers are stuck on the bundling strategy. Consumers seem to prefer a la carte. Any startup that tries to deliver what consumers want, given established providers and the economic theory, is going to fail.
- tptacek 14y ago
  That assumes that the cost structure to producing viable content is the same for a la carte providers and bundled providers. But the cost structure isn't the same. A la carte providers can invest in just a few high-quality titles, and the most compelling titles aren't necessarily the most expensive. Bundled pay-TV is also by design stuck with an expensive "spray and pray" model.
  - josephlord 14y ago
    But while cable has and needs billions of dollars of revenue they will offer billions for exclusive access to whatever content is deemed compelling (sports, Game of Thrones, HBO generally). A la carte providers just can't compete in the exclusive bidding war yet and the value of exclusivity is worth more than the incremental revenue of a la carte sales. There will be a point at which cable penetration could be small enough that these effects change but it has a long way to fall before it gets there. In the UK Sky has massive amounts of top class exclusive content on under 50% household penetration and they are still growing and strengthening their position.
    - tptacek 14y ago
      Do I have to concede that HBO and new a la carte content producers are in a bidding war? I don't follow this market that closely, but I follow it a bit, and the sense I get is that there's a threshold price at which any producer has a good shot at securing high-quality marketable content: good shows get cancelled, or never picked up at all, all the time.
      - josephlord 14y ago
        Quite a lot of what we might regard as good content (with niche rather than mass appeal) could be helped by this but it won't free the big budget mega-hits any time soon.