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I think you have a good grasp of how the execs at Time Warner Inc. (not TW Cable) see it. One can read the earnings call transcripts on seekingalpha where they
by 18pfsmt 14y ago
I think you have a good grasp of how the execs at Time Warner Inc. (not TW Cable) see it. One can read the earnings call transcripts on seekingalpha where they all but spell it out.
But, just to make it clear here for Chuck and others (rather than wasting time reading earnings' transcripts):
1) As soon as HBO offers their content via other dist. channels, the cable and satellite companies claim in their negotiations that the content is now worth less and they deserve to pay lower rates.
2) Lots of people pay for HBO without ever watching it (i.e. my parents), simply because they'd rather just pay for the premium package than figure out which channels to subscribe to. They are like non-customer subscribers. HBO et al would not see a dime from these people otherwise.
- tptacek 14y agoAlso, HBO collects revenue from real subscribers based on the promise of high-quality content down the road. They satisfy this requirement often enough that a huge portion of all cable subscribers automatically upgrade to HBO. An a la carte model would allow those subscribers to wait-and-see; instead of investing effort to get engaged with a show like Treme, they'd sit back and wait for the show's merit to be validated by other people, and opt in only to the shows that were immediately compelling.
- 18pfsmt 14y agoInteresting. I should probably clarify that I'm paraphrasing CEO Jeff Bewkes's thoughts given a couple quarters ago; these aren't my own thoughts. It seems like you have found further reasoning on your own which makes sense, and would give greater justifications to the execs to shy away from a la carte offerings. It just makes no business sense with two-tiered distribution and bundling.