4 ms·

My wish is NetBO = NetFlix + HBO - then I can forget about cable provider. But as others are pointing out - it would be bad for competition.

by malkia 14y ago

CamperBob2 14y ago
HBO has a bullheaded insistence on distribution through cable operators, though. I can watch Netflix without a cable connection but HBO actively refuses to even think about an Internet-only subscriber model. It's reminiscent of Sony's attempt to keep their content studios and product groups under the same tent. Any company whose business model is based on running unstoppable forces into immovable objects is always going to be at a competitive disadvantage in the long term. HBO just hasn't figured that out yet.
- joshred 14y ago
  It's not exactly a bullheaded insistence. They're owned by Time Warner Cable.
  - spacemanaki 14y ago
    I believe you're mistaken; the Time Warner that owns HBO is not affiliated with TWC anymore.
- lotso 14y ago
  > HBO actively refuses to even think about an Internet-only subscriber model. And you know this how? I'm pretty sure the execs at HBO have run the numbers. Why HBO Can't Afford To Offer A Stand-Alone Streaming Service http://www.forbes.com/sites/erikkain/2012/05/11/why-hbo-cant-afford-to-offer-a-stand-alone-streaming-service/ http://www.forbes.com/sites/erikkain/2012/05/11/why-hbo-cant...
  - filmgirlcw 14y ago
    Exactly. And when the numbers do make sense, HBO will be there and likely be there faster than anyone else in the space. Why? Because they know how to continue to feed a business model that works for them (and is much more profitable than Netflix I might add), while also keeping an eye on the future.
  - CamperBob2 14y ago
    I know it because I actually read the article you linked to. Funny, Netflix seems to 'afford' it just fine.
    - dangrossman 14y ago
      If HBO were to go internet-only, it'd lose the major cable operators heavily promoting them for free. They only market premium channels so hard because it helps sell expensive cable TV service. HBO would lose subscribers immediately as operators no longer actively replace subscribers for them as others churn out. To make up for the lost stream of customer acquisition, they'd have to: a) Cut prices by more than 50% to become competitive with Netflix/Hulu. This will cost them billions a year. b) Increase their catalog size significantly, which would cost billions a year. To give you an idea of the costs of licensing, HBO's last major deal was with Universal studios and cost them over $2 billion for access to their future movie catalog. It's hard to come up with a scenario where cutting their exclusive tie with cable makes sense financially right now. It's not "bullheaded" to say "no, we shouldn't throw away $10+bn/year to give Bob his internet subscription while we're in the midst of a death battle for the future of digital entertainment distribution". Netflix can do it because (a) they have a big catalog and low prices to entice subscribers with, (b) they got much of their catalog on the cheap before studios fully understood its value; this perk is going away as licenses renew, (c) it has no choice. Whether Netflix can grow its original content business within the constraints of its low subscription price faster than its licensing costs get out of hand is still up in the air.
      - CamperBob2 14y ago
        HBO would lose subscribers immediately as operators no longer actively replace subscribers for them as others churn out. But that's going to happen -- and is happening -- anyway. "no, we shouldn't throw away $10+bn/year to give Bob his internet subscription while we're in the midst of a death battle for the future of digital entertainment distribution". "What? A phone that plays music?! Are you crazy? Do you realize how much money iPods brought to this company last year?"
        14y ago
- jfb 14y ago
  The people I talked to at HBO certainly were smart enough to have crunched the numbers (this would've been in 2007 or so, but I have no reason to think its any different now.) if they're bullheaded, it's because they make shitloads of money from their current business model.
- dagw 14y ago
  HBO actively refuses to even think about an Internet-only subscriber model. They seem happy to offer such subscriber models outside the US, so they're obviously not refusing to think about it. I'm sure they think about it very much every day and have complete plans to roll out such a service in the US as well the second it makes financial sense.

My wish is NetBO = NetFlix + HBO - then I can forget about cable provider. But as others are pointing out - it would be bad for competition.

by malkia 14y ago

My wish is NetBO = NetFlix + HBO - then I can forget about cable provider. But as others are pointing out - it would be bad for competition.

CamperBob2 14y ago

HBO has a bullheaded insistence on distribution through cable operators, though. I can watch Netflix without a cable connection but HBO actively refuses to even think about an Internet-only subscriber model. It's reminiscent of Sony's attempt to keep their content studios and product groups under the same tent. Any company whose business model is based on running unstoppable forces into immovable objects is always going to be at a competitive disadvantage in the long term. HBO just hasn't figured that out yet.

joshred 14y ago
It's not exactly a bullheaded insistence. They're owned by Time Warner Cable.
- spacemanaki 14y ago
  I believe you're mistaken; the Time Warner that owns HBO is not affiliated with TWC anymore.
lotso 14y ago
> HBO actively refuses to even think about an Internet-only subscriber model. And you know this how? I'm pretty sure the execs at HBO have run the numbers. Why HBO Can't Afford To Offer A Stand-Alone Streaming Service http://www.forbes.com/sites/erikkain/2012/05/11/why-hbo-cant-afford-to-offer-a-stand-alone-streaming-service/ http://www.forbes.com/sites/erikkain/2012/05/11/why-hbo-cant...
- filmgirlcw 14y ago
  Exactly. And when the numbers do make sense, HBO will be there and likely be there faster than anyone else in the space. Why? Because they know how to continue to feed a business model that works for them (and is much more profitable than Netflix I might add), while also keeping an eye on the future.
- CamperBob2 14y ago
  I know it because I actually read the article you linked to. Funny, Netflix seems to 'afford' it just fine.
  - dangrossman 14y ago
    If HBO were to go internet-only, it'd lose the major cable operators heavily promoting them for free. They only market premium channels so hard because it helps sell expensive cable TV service. HBO would lose subscribers immediately as operators no longer actively replace subscribers for them as others churn out. To make up for the lost stream of customer acquisition, they'd have to: a) Cut prices by more than 50% to become competitive with Netflix/Hulu. This will cost them billions a year. b) Increase their catalog size significantly, which would cost billions a year. To give you an idea of the costs of licensing, HBO's last major deal was with Universal studios and cost them over $2 billion for access to their future movie catalog. It's hard to come up with a scenario where cutting their exclusive tie with cable makes sense financially right now. It's not "bullheaded" to say "no, we shouldn't throw away $10+bn/year to give Bob his internet subscription while we're in the midst of a death battle for the future of digital entertainment distribution". Netflix can do it because (a) they have a big catalog and low prices to entice subscribers with, (b) they got much of their catalog on the cheap before studios fully understood its value; this perk is going away as licenses renew, (c) it has no choice. Whether Netflix can grow its original content business within the constraints of its low subscription price faster than its licensing costs get out of hand is still up in the air.
    - CamperBob2 14y ago
      HBO would lose subscribers immediately as operators no longer actively replace subscribers for them as others churn out. But that's going to happen -- and is happening -- anyway. "no, we shouldn't throw away $10+bn/year to give Bob his internet subscription while we're in the midst of a death battle for the future of digital entertainment distribution". "What? A phone that plays music?! Are you crazy? Do you realize how much money iPods brought to this company last year?"
      - 14y ago
jfb 14y ago
The people I talked to at HBO certainly were smart enough to have crunched the numbers (this would've been in 2007 or so, but I have no reason to think its any different now.) if they're bullheaded, it's because they make shitloads of money from their current business model.
dagw 14y ago
HBO actively refuses to even think about an Internet-only subscriber model. They seem happy to offer such subscriber models outside the US, so they're obviously not refusing to think about it. I'm sure they think about it very much every day and have complete plans to roll out such a service in the US as well the second it makes financial sense.