Take My Money, HBO!

[Shurik]

Sounds to me like the money lost to downloading isn't enough to make a switch to a more direct subscription model financially viable. It would be naive to think HBO hasn't run the numbers on that, too.

Game of Thrones is the most pirated/downloaded show on the internet, but its ratings keep going up and up. The season two finale was its biggest yet. It makes a lot of money overseas and from dvd sales too. The trend seems to be that cable show ratings keep going up while network show ratings have gone way down.

HBO has zero reason to change anything right now. They are fine with the subscription model.

I've read somewhere during the first season of GOT that selling the show to foreign markets only earned HBO app. half of the first season's budget. The first season DVDs/Blu Rays were enormous hit too.

I would pay a reasonable sum if HBO would offer downloads of their shows, but since it's probably never going to happen, it's "paying the iron price" for me during the original run, and buying the Blu Ray set when it comes out.

 

[the G-man]

HBO: Web doesn’t pay

• An HBO exec made clear to the tech community last week that its HBO GO streaming service has to remain bundled with customers’ cable subscriptions, and can’t operate as a stand-alone service.
  
  “It’s math,” said Alison Moore at TechCrunch’s DISRUPT conference in San Francisco.
  
  “It’s easy to say that, ‘$8 a month, just launch it direct to consumer, and then it’s all going to be fine.’ I think there’s a lot more detail that goes behind that.”
  
  By “math” and “detail,” Moore, a senior vice president of digital platforms, means lucrative retransmission deals with cable and telecom companies are the real reason HBO would be wary of releasing its content to the Internet.
  
  Cable companies rely on HBO content to lure customers into buying higher revenue-generating subscription packages, analysts said.

 

[stj]

The handful of original series (kept relatively fresh by limited reairing and very high prices on DVD sets) are not the only thing HBO sells. HBO also sell massive movie packages, including a great deal of soft porn under its Cinemax label.
The premium services apparently encourage consumers who actually have a choice in buying cable to sign up, so that market is going to be and remain lucrative. The thing there is, that the cable companies are either also the internet companies, or an expensive reduplication. The telecommunications companies will therefore pay more for the premium TV channels. Which means HBO doesn't have much interest now in changing.

It would be highly imprudent of HBO to focus on selling only its riskiest products. This is especially true when competition amongst premium channels means that viewers cannot rely on any single premium service as a way to provide access to all movies. Netflix streaming already cannot provide access to all movies and TV series, and every entry into this market, despite the low costs of delivery, will reduce the uniqueness of each service's product mix.

 

[Temis the Vorta]

It doesnt surprise me that the holdup is HBO's existing business relationships. But the music biz had existing relationships, too, and that didn't save their asses when sudden changes in consumer beahvior changed the math.

The whole system depends on consumers continuing to pay extortionate cable and dish rates (to support absurd fees extracted by sports franchises, which makes no sense for those of us wo don't watch sports).

Older viewers might continue to do that, but among people, I know in their 20s, nobody even thinks about watching traditional TV or subscribing to cable. They view everything online, whether its Netflix or Amazon or more ahem creative approaches. That's an indication of future disruption in the system.

The change could happen very quickly, I've seen this situation unfold before. Whatever calculations HBO has made could become irrelevant more quickly than they can react.

 

[stj]

The situation is changing as it has been for some time: Decreasing audience share for all media except internet. Yet internet media is difficult to get revenue from.
Until online viewing is readily obtainable on a full size screen by a family or other group, or even a couple, as opposed to a trendy young person hunched over a laptop (or even a God forsaken telephone screen!) it is highly doubtful any monetizing scheme can make internet content profitable enough, despite the restrictions on content by intellectual property laws, to cause the present system to collapse. Slowly deteriorate, just as it has, yes.

The broadcast networks do not just broadcast the prime time lineup, they also broadcast the news and late night talk shows and daytime programming. Misunderstanding what the system really provides now is not an argument for the magic of the market to provide internet heaven.

 

[Kegg]

I get Game of Thrones with Sky. I also get Mad Men, The Borgias,, Veep, Boardwalk Empire and Treme on the same Sky channel, limiting myself to series that are still running (I caught their complete runthrough of Big Love last year, and am following them doing the same for Friday Night Lights this year). Same deal with Sky gets me, on another single channel, Dexter, Falling Skies, The Walking Dead and American Horror Story. I also get Romanzo Criminale on yet another channel.

Stuff I don't watch under this umbrella?

Uhh... Homeland? There we go.

So - while perhaps not analogous to HBO - I'm perfectly happy with how I'm getting these shows. I suppose the timing vis a vis their country of origin can be annoying - they're always later, be it a day late (Game of Thrones, Mad Men), a couple of days or weeks later (Awake, Falling Skies), months (The Borgias, Dexter) or sometimes even years (Romanzo Criminale), but I'm patient.

 

[Robert Maxwell]

The situation is changing as it has been for some time: Decreasing audience share for all media except internet. Yet internet media is difficult to get revenue from.
Until online viewing is readily obtainable on a full size screen by a family or other group, or even a couple, as opposed to a trendy young person hunched over a laptop (or even a God forsaken telephone screen!) it is highly doubtful any monetizing scheme can make internet content profitable enough, despite the restrictions on content by intellectual property laws, to cause the present system to collapse. Slowly deteriorate, just as it has, yes.

The broadcast networks do not just broadcast the prime time lineup, they also broadcast the news and late night talk shows and daytime programming. Misunderstanding what the system really provides now is not an argument for the magic of the market to provide internet heaven.

You can buy a $50-100 appliance known as a Roku box to get streaming content on your TV. It is very, very easy to set up. (There's also AppleTV and I think some other similar appliances.)

No one has to "hunch over a laptop" now. Been that way for a few years now.

 

[stj]

Roku uses a wireless router, which doubles the extra price, as well as adding security issues for the router. Prices for both Roku and routers have been stable for some time so far as I know, and both together are equal to or half as much as price of a basic TV. Big screen HDTVs costing $500+ are not as universal as some seem to imagine. When Roku and router together are more like 10-20% of basic TV price, then we're probably talking mass sales. It seems sale prices in highly competitive markets are misleading some people? (Or possibly widespread relative poverty is misleading me?)

Or possibly the advertising emphasis on providing content for phones has seriously misled me as to who is really going for this kind of low quality picture?

News, especially local news, daytime programming and night time talk shows are parts of the broadcast offering internet is nowhere near replacing. Anymore than streaming is anywhere near replacing the total package even of STARZ or Showtime, much less HBO.

Why not have all copyrighted material, movies and television shows and news and talk shows and reality programming, be paid regulated rates by state digital libraries, available over the state communications system, on one of the channels dedicated to state use? Other channels can transmit high school sports events, government hearings, receive petitions and forms from home, emergency broadcast system, public telephone system, etc.

 

[the G-man]

News, especially local news,... are parts of the broadcast offering internet is nowhere near replacing.

Where do you live that your local news is anything but glorified police beat and weather?

Why not have all copyrighted material, movies and television shows and news and talk shows and reality programming, be paid regulated rates by state digital libraries, available over the state communications system, on one of the channels dedicated to state use?

The First Amendment..

 

[Robert Maxwell]

Roku uses a wireless router, which doubles the extra price, as well as adding security issues for the router. Prices for both Roku and routers have been stable for some time so far as I know, and both together are equal to or half as much as price of a basic TV. Big screen HDTVs costing $500+ are not as universal as some seem to imagine. When Roku and router together are more like 10-20% of basic TV price, then we're probably talking mass sales. It seems sale prices in highly competitive markets are misleading some people? (Or possibly widespread relative poverty is misleading me?)

Your argument makes no sense at all.

Cost of a Roku box: $50-100.

Cost of a router: ~$50.

Cost of a cable subscription: at least $50 a month.

Now, most people already have wireless routers, so you can't really figure that expense into it, because no one's buying the router just for Roku. So what you've got is a one-time expense that is, at most, 2 months' worth of a cable subscription--and then it's good forever. And you don't think that is affordable to consumers? Seriously?

 

[stj]

Routers aren't always $50, depends on the competitiveness of the market. Many, many people do not live in a competitive market. Besides, how can you think startup costs are irrelevant to making a switch?

You seem to be making assumptions about costs that aren't born out by my experience. There are many people whose possession of a television, much less a PC or laptop, came as a gift from parent/relatives who scraped for a long time for a really good birthdy/Christmas present. Most of all of course the cost of high-speed internet seems to have dropped out of your calculations. Optical fiber is optical fiber. Monthly internet and monthly basic cable are comparable expenses.

The real expense comes with the cable boxes, which offer features like the ability to shut off service with the flick of a switch. The on demand services bundled with cable, besides including worthless things like local crime news and local weather () really do supply a great deal that overlaps with streaming services. Or even some material that is not available on line, because of intellectual property laws. For instance, I'll be catching up Warehouse 13 and Alphas on the cable, where I can't online. The cable companies will keep sweetening these packages because the ability to do away with actual workers going to homes to disconnect service is a huge cost saver. Maybe you don't realize how hand to mouth many people are living.

Incidentally, many people screw up their router security, which isn't a monetary cost but one people become aware of, before they become aware of the solution.

 

[Robert Maxwell]

Routers aren't always $50, depends on the competitiveness of the market. Many, many people do not live in a competitive market. Besides, how can you think startup costs are irrelevant to making a switch?

The argument I am making is that ditching cable/satellite for a streaming Internet appliance is highly cost effective. You have yet to demonstrate otherwise.

Besides that, plenty of ISPs basically give you the router (or comp its cost in some way) as an incentive to get you to sign up for their service.

You seem to be making assumptions about costs that aren't born out by my experience. There are many people whose possession of a television, much less a PC or laptop, came as a gift from parent/relatives who scraped for a long time for a really good birthdy/Christmas present. Most of all of course the cost of high-speed internet seems to have dropped out of your calculations. Optical fiber is optical fiber. Monthly internet and monthly basic cable are comparable expenses.

But now you are talking about people who are too poor to afford cable or satellite to begin with. They are irrelevant to this discussion, because the question is what it would take for Internet streaming to supplant cable/satellite subscriptions.

The real expense comes with the cable boxes, which offer features like the ability to shut off service with the flick of a switch. The on demand services bundled with cable, besides including worthless things like local crime news and local weather () really do supply a great deal that overlaps with streaming services. Or even some material that is not available on line, because of intellectual property laws. For instance, I'll be catching up Warehouse 13 and Alphas on the cable, where I can't online. The cable companies will keep sweetening these packages because the ability to do away with actual workers going to homes to disconnect service is a huge cost saver. Maybe you don't realize how hand to mouth many people are living.

I don't understand why you are focusing on people who can't afford those services to begin with.

Incidentally, many people screw up their router security, which isn't a monetary cost but one people become aware of, before they become aware of the solution.

What does this have to do with anything?

 

[stj]

Apparently I've completely misunderstood what you're arguing for. I thought you were talking about the likelihood of replacement of both broadcast and cable by internet streaming services. Your position really is much more reasonable than I thought. Sorry.

Still, given the increasing bundling of internet, cable and phone, it doesn't make much sense to artifically limit the question so narrowly. Cable will offer ad revenues from the basic cable channels. Internet streaming taking over would be a lot like cable existing only on the profits of premium cable, I think. Plus there's still the problem of internet streaming services not offering those unwholesomely plebeian services like local news and weather etc. A wider expansion of internet streaming is as you say already underway but it's going to be slowed I think not just by this lack, but by balkanization of content by exclusivity deals.