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I believe them when they say that net revenue would go -down- ( https://twitter.com/HBO/status/210390531623227392 https://twitter.com/HBO/status/210390531623227

I believe them when they say that net revenue would go -down- ( https://twitter.com/HBO/status/210390531623227392 https://twitter.com/HBO/status/210390531623227392 ). Right now they have a gigantic sales force by using the sales staff of all the cable and satellite companies, plus they get to punt on all billing and customer support to the same partner companies. If they were to start selling straight to the customer, hbo would need to staff up their own billing/support, but more importantly, they bite the hand that feeds them. Cable companies wouldn't be pushing nearly as hard to sign people up for HBO if it wasn't going to lock customers in to cable. You'd need a -lot- of sign ups to make up for cable companies switching to promoting the heck out of a different premium channel. I think the smart move is to milk the gravy train of cable partnerships for a few more years until cable subscriptions fall off more. Then switch to dealing with customers directly. But that's a huge transition to staff up a company and start dealing with end users, and it isn't the risk-free cost-free no brainer that we assume it is when we say HBO should just take our money.

edwardunknown 14y ago
I think House of Cards probably changed the situation somewhat: if Netflix can keep putting out exclusive content of that caliber HBO is going to lose a lot of customers. The week after that show premiered HBO enabled AirPlay on their iPhone app, which by the way is fantastic. I bet they're already prepared to go the Netflix route and are just watching the numbers for the right time to strike.
- kin 14y ago
  I'm so glad Netflix went out to prove this can be done. Truth is many cable providers have exclusive content like DirecTV and Friday Night Lights. It never really worked because the cost to subscribe to cable for one show was so high. Netflix is much more economical and to have a Davind Fincher directed pilot starring Kevin Spacey is proof. Not to mention how accessible the show is.
- woobar 14y ago
  It's not that simple. Netflix uses traditional channels for international distribution of House of Cards. For instance, it premiered on russian ad-supported TV just few days after US 'release'. I guess even with 30M paying customers they can't support even one show. HBO has more than one.
eddieroger 14y ago
The other major factor is that they can often predict income from cable subscribers, where online-only could potentially come and go as they please. If you only like Curb Your Enthusiasm, sign up when it premiers, cancel when it ends. Or worse, sign up when it ends and watch it over the course of a month. Compare this to cable subscribers, where you get a reduced rate (often) for a three month block, so long as you stay subscribed. It's a lot more predictable this way, and can extend out to predicting how many won't actually cancel, etc. In the world where HBO can predict income, they can afford to take a leap and buy a whole season of an expensive show like Game of Thrones on a gamble (which it was). Online-only makes this comfort go away, reducing the potential quality of the product, and creating a spiral of losing subscribers.
- illuminate 14y ago
  "If you only like Curb Your Enthusiasm, sign up when it premiers, cancel when it ends" You still have to have an existing cable television subscription for this.
  - eddieroger 14y ago
    In today's model, yes. I meant it more in the context of digital-only subscriptions, where you could theoretically sign up for a month of service and get all the programming you wanted. In that sitaution, HBO can't plan their income sinnce they will have intermittent spurts of subscribers with no expectation of sustained income.

edwardunknown 14y ago

I think House of Cards probably changed the situation somewhat: if Netflix can keep putting out exclusive content of that caliber HBO is going to lose a lot of customers. The week after that show premiered HBO enabled AirPlay on their iPhone app, which by the way is fantastic. I bet they're already prepared to go the Netflix route and are just watching the numbers for the right time to strike.

kin 14y ago
I'm so glad Netflix went out to prove this can be done. Truth is many cable providers have exclusive content like DirecTV and Friday Night Lights. It never really worked because the cost to subscribe to cable for one show was so high. Netflix is much more economical and to have a Davind Fincher directed pilot starring Kevin Spacey is proof. Not to mention how accessible the show is.
woobar 14y ago
It's not that simple. Netflix uses traditional channels for international distribution of House of Cards. For instance, it premiered on russian ad-supported TV just few days after US 'release'. I guess even with 30M paying customers they can't support even one show. HBO has more than one.

eddieroger 14y ago

The other major factor is that they can often predict income from cable subscribers, where online-only could potentially come and go as they please. If you only like Curb Your Enthusiasm, sign up when it premiers, cancel when it ends. Or worse, sign up when it ends and watch it over the course of a month. Compare this to cable subscribers, where you get a reduced rate (often) for a three month block, so long as you stay subscribed. It's a lot more predictable this way, and can extend out to predicting how many won't actually cancel, etc. In the world where HBO can predict income, they can afford to take a leap and buy a whole season of an expensive show like Game of Thrones on a gamble (which it was). Online-only makes this comfort go away, reducing the potential quality of the product, and creating a spiral of losing subscribers.

illuminate 14y ago
"If you only like Curb Your Enthusiasm, sign up when it premiers, cancel when it ends" You still have to have an existing cable television subscription for this.
- eddieroger 14y ago
  In today's model, yes. I meant it more in the context of digital-only subscriptions, where you could theoretically sign up for a month of service and get all the programming you wanted. In that sitaution, HBO can't plan their income sinnce they will have intermittent spurts of subscribers with no expectation of sustained income.