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HBO considering offering online subscriptions to cable cutters

post #1 of 59
Thread Starter 
Premium network HBO is currently only available to paying cable TV subscribers, but that could change through the company's HBO Go streaming service in the future.

HBO Go


HBO gave the first signs that it might be willing to shake up its business model in a new interview with Reuters. The comments were made by HBO Chief Executive Richard Plepler, who said that HBO Go could "evolve" with broadband partners.

While HBO Go currently requires users to have an HBO subscription through a cable TV provider, the network's CEO admitted that the company could package HBO Go with monthly Internet service through broadband partners, many of which are the same cable TV providers.

Plepler said that customers could pay an extra $10 or $15 per month ? about the same price as a regular cable-only HBO subscription ? as part of their Internet bill to have access to the network. But the CEO said the network and its broadband partners would "have to make the math work" before such a program could be made available.

HBO's apparent willingness to shake things up comes as competition has been heating up from Web-based media providers Netflix and Amazon, which have begun producing their own original content available only to paid subscribers. Netflix in particular found success with "House of Cards," a political thriller starring Kevin Spacey and produced by director David Fincher, with the same level of quality viewers see with HBO's own programming.

Earlier this year, HBO updated its iOS HBO Go app to allow users to stream content to their Apple TV via AirPlay. A native HBO Go application for the Apple TV is rumored to arrive at some point this year.
post #2 of 59
And the future slowly arrives. One day cable subscription will be remembered like milk deliveries.
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post #3 of 59
Quote:
Originally Posted by digitalclips View Post

And the future slowly arrives. One day cable subscription will be remembered like milk deliveries.


So that means my house will have a little box near the backdoor where the cable used to come in.

post #4 of 59

Wow! It appears someone is finally "getting it."  I should mark this day on my calendar ...

post #5 of 59

Wow please do this!

post #6 of 59

And so it began. HBO and mainstream ABC could turn the tide. Great news.

post #7 of 59
Think about it. Netflix Hulu Plus= $16. Let's add another $10 for HBO. Then let's add some sports channel subscription, and a cooking channel. Get the picture? It doesn't take long for these subscription fees to mount up to the typical cable bill. In fact you could wind up with a bigger bill depending on your appetite. All on top of the of the cost for broadband service too. What about multiple HDTVs in the home? Even more bandwidth needed to increase overall cost. With data caps?

The a la carte model may sound attractive but it starts to add up quickly. Economy of scale and all that jazz. So I kind of chuckle at the "And the future slowly arrives" mindset.
post #8 of 59
This is a step in the right direction but they just need to let us pay that $15-20 via the app rather than in our bill. Putting it with our Internet bill means there could still be lock out if say TimeWarner decides not to offer this version and you have to have cable

And for those that prefer to own put the eps on sale within the week and make pricing more reasonable. Sorry HBO and Showtime but your shows are not so awesome that they justify the $3.99-5.99 you want to charge

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post #9 of 59
Finally. They probably saw the numbers after the airplay update and said Holy Sh*t we were wrong.
post #10 of 59
Let's say you watch three series on HBO each week. For $10 a month you receive these from HBO streaming, versus a digital cable HD connection with converter and 2000 channels you would never watch for only $160 a month. The cost for streaming would be about $1 per episode; much cheaper than iTunes or another source, and much more legal than downloading the episode through usenet.
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post #11 of 59
Technically, you shouldn't have to partner with anyone, just put it up on your website and whatever broadband provider people have shouldn't matter.
Edited by ascii - 3/22/13 at 3:37pm
post #12 of 59
Quote:
Originally Posted by lkrupp View Post

Think about it. Netflix Hulu Plus= $16. Let's add another $10 for HBO. Then let's add some sports channel subscription, and a cooking channel. Get the picture? It doesn't take long for these subscription fees to mount up to the typical cable bill. In fact you could wind up with a bigger bill depending on your appetite. All on top of the of the cost for broadband service too. What about multiple HDTVs in the home? Even more bandwidth needed to increase overall cost. With data caps?

The a la carte model may sound attractive but it starts to add up quickly. Economy of scale and all that jazz. So I kind of chuckle at the "And the future slowly arrives" mindset.

some of us don't watch this much TV so no need to pay for every subscription

post #13 of 59
Originally Posted by lkrupp View Post
It doesn't take long for these subscription fees to mount up to the typical cable bill. In fact you could wind up with a bigger bill depending on your appetite.

 

The idea behind the a la carte model is that we don't have such tastes. There are very few channels whose broadcast sets are even worth viewing. With this model no one channel would have a huge number of subscribers but every channel would have some, given that people like different things. Couple that with video iAds instead of the standard broadcast advertisements and the channel prices go way down since the ads can be targeted to the user and the channel can show 10,000 different advertisements at the same time

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post #14 of 59

i wont buy cable but i would buy hbo..i doubt im alone here..

post #15 of 59

This story was circulating in January.

At the time, I commented somewhere that HBO should only do this if they would like to make a billionbilllionbilion dollars, and own the universe (or something to that  effect)

post #16 of 59
Great news. Hope it will be adapted widely (US) and quickly adopted by Europe. Only reservation is costs; we pay around $20/m for 25 analogue, 60 digital and 16 HD channels. 100 additional channels for $10 (or 150 channels for $15). Content -to me- is useless as I hardly ever watch TV, but I like HBO (you pay another $20/m)
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post #17 of 59

yes, please.

post #18 of 59
Quote:
Originally Posted by lkrupp View Post

Think about it. Netflix Hulu Plus= $16. Let's add another $10 for HBO. Then let's add some sports channel subscription, and a cooking channel. Get the picture? It doesn't take long for these subscription fees to mount up to the typical cable bill. In fact you could wind up with a bigger bill depending on your appetite. All on top of the of the cost for broadband service too. What about multiple HDTVs in the home? Even more bandwidth needed to increase overall cost. With data caps?

The a la carte model may sound attractive but it starts to add up quickly. Economy of scale and all that jazz. So I kind of chuckle at the "And the future slowly arrives" mindset.

This.

The mass media companies are simply approaching a potential target audience from a different perspective. The mass media companies will continue to force consumers to subscribe to bundles rather than a la carte programming. Notably, the largest Internet Service Providers are also the largest subscription television providers.


If you want a la carte, the best option available today is Amazon Instant Video or Apple iTunes.


This is the reason you are forced to subscribe to "bundles" of channels:

The Walt Disney Cmpany
  • Hulu (27%)
  • Disney/ABC Television Group Digital Media
  • Walt Disney Television
  • Disney-ABC Domestic Television - formerly Buena Vista Television
  • Disney-ABC International Television - formerly Buena Vista International Television
  • ABC Television Network
  • ABC News
  • A+E Networks (joint venture with Hearst Corporation; equity holding)
  • A&E
  • History
  • Bio.
  • H2
  • Military History
  • Crime & Investigation Network
  • Lifetime
  • Lifetime Movie Network
  • Lifetime Real Women
  • ESPN, Inc.(Disney 80%)
  • ESPN and HD
  • ESPN2 and HD
  • ESPN on ABC - formerly ABC Sports
  • ESPN Classic
  • ESPNews and HD
  • ESPN Deportes
  • ESPN Films
  • ESPNU
  • ESPN Kids
  • ESPN Classic
  • ESPN Now
  • ESPN Plus
  • ESPN Original Entertainment
  • ESPN Pay-Per-View
  • ESPN Regional Television
  • ESPN International (see for complete list of channels)
  • ESPN America
  • TSN (20%)
  • ESPN Radio
  • Mobile ESPN
  • ESPN3
  • ESPN The Magazine
  • ESPN Books (an imprint of Disney's Hyperion Books)
  • ESPN Home Entertainment
  • ESPN Outdoors
  • BASS
  • ESPN Digital Center


Time Warner
  • Turner Broadcasting System
  • Turner Broadcasting International
  • Millennium Media Group
  • Chilevisión
  • Turner Entertainment Networks
  • truTV
  • TBS
  • TNT
  • TCM
  • WPCH
  • Court TV Original Productions
  • TNT Originals
  • TCM Productions
  • TBS Productions
  • Turner Sports
  • NBC / Turner
  • NASCAR Races
  • Turner Sports & Entertainment Digital Network
  • Bleacher Report
  • NCAA.com
  • March Madness Live
  • PGA.com
  • NBA Digital (joint venture with the NBA)
  • NBA TV
  • NBA.com
  • NBA LEAGUE PASS
  • NBA Mobile
  • NBA Game Time App
  • NBADLEAGUE.com
  • WNBA.com
  • Turner Entertainment Digital Network
  • The Smoking Gun
  • TBS, Inc. Animation, Young Adults & Kids Media (AYAKM) division
  • Cartoon Network
  • Adult Swim
  • Boomerang
  • Cartoon Network Studios
  • Williams Street
  • Adult Swim Video
  • Cartoon Network Video
  • CNN News Group
  • CNN U.S.
  • HLN
  • CNN en Español
  • CNN International
  • CNN Radio
  • CNN Originals
  • Headline News Productions
  • CNN Digital Network
  • CNN.com
  • CNNMoney.com
  • iReport
  • CNN Mobile
  • CNN Newsource
  • CNN ImageSource
  • CNN Wire
  • HBO
  • HBO
  • Cinemax
  • HBO Independent Productions
  • HBO Multiplexes
  • HBO on Demand
  • Cinemax Multiplexes
  • Cinemax on Demand
  • HBO Video
  • HBO Domestic and International Program Distribution
  • HBO Films
  • HBO Miniseries
  • HBO Sports
  • HBO Entertainment
  • HBO Documentary Films
  • Picturehouse (co-owned by New Line Cinema)
  • HBO International
  • HBO Asia
  • HBO Hungary
  • HBO India
  • HBO Poland
  • HBO Romania
  • HBO Latin America Group
  • HBO Latin America
  • HBO Brazil
  • Warner Channel
  • E! Latin America
  • Cinemax Latin America


News Corporation
  • 20th Century Fox Television
  • 20th Television
  • Foxtel
  • Fox Broadcasting Company
  • Fox International Channels
  • Fox International Channels Italy
  • Fox International Channels Portugal
  • Fox International Channels Philippines
  • Fox Channels Benelux
  • Fox Sports Australia
  • Fox Telecolombia
  • Fox Television Stations
  • Fox Television Studios
  • Imedi Media Holding
  • Latvijas Neatkarīgā Televīzija
  • MyNetworkTV
  • STAR TV
  • TV5 Rīga
  • Asianet Corporation
  • Big Ten Network (51%)
  • Fox Business Network
  • Fox College Sports
  • Fox Deportes
  • Fox News Channel
  • Fox Soccer
  • Fox Sports Enterprises
  • Foxtel (50%)
  • Fox Sports 1
  • Fox Sports Networks
  • Fuel TV
  • FX Networks
  • FX Movie Channel
  • National Geographic Channel (US) (67%)
  • National Geographic Channel (International) (50%)
  • LAPTV (Latin America — co-owned with Paramount Pictures/Viacom, Metro-Goldwyn-Mayer/MGM Holdings and Universal Studios/NBC Universal)
  • Telecine (Brazil — co-owned with Globosat Canais, Paramount Pictures, MGM, Universal Studios and DreamWorks)
  • BSkyB [United Kingdom] (39.1%)
  • Sky Deutschland [Germany] (49.90%)
  • SKY Italia [Italy] (100%)
  • SKY Network Television [New Zealand] (43.65%)
  • Foxtel [Australia] (25%)
  • Star TV [India & Greater China] (100%)
  • Tata Sky [India] (20%)


Viacom
  • MTV Networks
  • MTV
  • MTV2
  • Tr3s
  • MTV Desi
  • MTV Hits
  • MTV Jams
  • mtvU
  • VH1
  • VH1 Classic
  • VH1 Soul
  • CMT
  • CMT Pure Country
  • CMT (Canada) (10%)
  • Palladia
  • Nickelodeon
  • Nick 2/Nick at Nite
  • Nick Jr. (Previously known as Noggin from February 2, 1999 until its relaunch September 28, 2009 as Nick Jr.)
  • TeenNick (Previously known as The N from April 1, 2002 until its relaunch September 28, 2009 as TeenNick)
  • Nicktoons
  • TV Land
  • Nick Gas (1999 –2009)
  • NickMom
  • BET Networks
  • BET
  • BET Hip-Hop
  • BET Gospel
  • Centric
  • Comedy Central
  • Logo
  • TMF
  • VIVA
  • Spike




As anyone can see, a few companies own the vast majority of television production and distribution. Nothing will change other than they may offer new methods of reaching into your wallet.


What these companies fail to realize is that their subscription television model will be in serious jeopardy within the next generation. As many consumers become "cord cutters" they in turn raise a generation of "cord nevers." Although I didn't have subscription television as a youth, I decided I wanted subscription television as an adult but later recognized the many possible avenues to the same content.



Edited by MacBook Pro - 3/22/13 at 8:55am
post #19 of 59
Quote:
Originally Posted by isaidso View Post

This story was circulating in January.
At the time, I commented somewhere that HBO should only do this if they would like to make a billionbilllionbilion dollars, and own the universe (or something to that  effect)

What makes you so sure they will? Remember Time Warner owns HBO.
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post #20 of 59
Quote:
Originally Posted by MacBook Pro View Post

This.

The mass media companies are simply approaching a potential target audience from a different perspective. The mass media companies will continue to force consumers to subscribe to bundles rather than a la carte programming. Notably, the largest Internet Service Providers are also the largest subscription television providers.


If you want a la carte, the best option available today is Amazon Instant Video or Apple iTunes.


This is the reason you are forced to subscribe to "bundles" of channels:

Viacom
  • MTV Networks
  • MTV
  • MTV2
  • Tr3s
  • MTV Desi
  • MTV Hits
  • MTV Jams
  • mtvU
  • VH1
  • VH1 Classic
  • VH1 Soul
  • CMT
  • CMT Pure Country
  • CMT (Canada) (10%)
  • Palladia
  • Nickelodeon
  • Nick 2/Nick at Nite
  • Nick Jr. (Previously known as Noggin from February 2, 1999 until its relaunch September 28, 2009 as Nick Jr.)
  • TeenNick (Previously known as The N from April 1, 2002 until its relaunch September 28, 2009 as TeenNick)
  • Nicktoons
  • TV Land
  • Nick Gas (1999 –2009)
  • NickMom
  • BET Networks
  • BET
  • BET Hip-Hop
  • BET Gospel
  • Centric
  • Comedy Central
  • Logo
  • TMF
  • VIVA
  • Spike


Disney
  • Hulu (27%)
  • Disney/ABC Television Group Digital Media
  • Walt Disney Television
  • Disney-ABC Domestic Television - formerly Buena Vista Television
  • Disney-ABC International Television - formerly Buena Vista International Television
  • ABC Television Network
  • ABC News
  • A+E Networks (joint venture with Hearst Corporation; equity holding)
  • A&E
  • History
  • Bio.
  • H2
  • Military History
  • Crime & Investigation Network
  • Lifetime
  • Lifetime Movie Network
  • Lifetime Real Women
  • ESPN, Inc.(Disney 80%)
  • ESPN and HD
  • ESPN2 and HD
  • ESPN on ABC - formerly ABC Sports
  • ESPN Classic
  • ESPNews and HD
  • ESPN Deportes
  • ESPN Films
  • ESPNU
  • ESPN Kids
  • ESPN Classic
  • ESPN Now
  • ESPN Plus
  • ESPN Original Entertainment
  • ESPN Pay-Per-View
  • ESPN Regional Television
  • ESPN International (see for complete list of channels)
  • ESPN America
  • TSN (20%)
  • ESPN Radio
  • Mobile ESPN
  • ESPN3
  • ESPN The Magazine
  • ESPN Books (an imprint of Disney's Hyperion Books)
  • ESPN Home Entertainment
  • ESPN Outdoors
  • BASS
  • ESPN Digital Center

Time Warner
  • Turner Broadcasting System
  • Turner Broadcasting International
  • Millennium Media Group
  • Chilevisión
  • Turner Entertainment Networks
  • truTV
  • TBS
  • TNT
  • TCM
  • WPCH
  • Court TV Original Productions
  • TNT Originals
  • TCM Productions
  • TBS Productions
  • Turner Sports
  • NBC / Turner
  • NASCAR Races
  • Turner Sports & Entertainment Digital Network
  • Bleacher Report
  • NCAA.com
  • March Madness Live
  • PGA.com
  • NBA Digital (joint venture with the NBA)
  • NBA TV
  • NBA.com
  • NBA LEAGUE PASS
  • NBA Mobile
  • NBA Game Time App
  • NBADLEAGUE.com
  • WNBA.com
  • Turner Entertainment Digital Network
  • The Smoking Gun
  • TBS, Inc. Animation, Young Adults & Kids Media (AYAKM) division
  • Cartoon Network
  • Adult Swim
  • Boomerang
  • Cartoon Network Studios
  • Williams Street
  • Adult Swim Video
  • Cartoon Network Video
  • CNN News Group
  • CNN U.S.
  • HLN
  • CNN en Español
  • CNN International
  • CNN Radio
  • CNN Originals
  • Headline News Productions
  • CNN Digital Network
  • CNN.com
  • CNNMoney.com
  • iReport
  • CNN Mobile
  • CNN Newsource
  • CNN ImageSource
  • CNN Wire
  • HBO
  • HBO
  • Cinemax
  • HBO Independent Productions
  • HBO Multiplexes
  • HBO on Demand
  • Cinemax Multiplexes
  • Cinemax on Demand
  • HBO Video
  • HBO Domestic and International Program Distribution
  • HBO Films
  • HBO Miniseries
  • HBO Sports
  • HBO Entertainment
  • HBO Documentary Films
  • Picturehouse (co-owned by New Line Cinema)
  • HBO International
  • HBO Asia
  • HBO Hungary
  • HBO India
  • HBO Poland
  • HBO Romania
  • HBO Latin America Group
  • HBO Latin America
  • HBO Brazil
  • Warner Channel
  • E! Latin America
  • Cinemax Latin America



As anyone can see, a few companies own the vast majority of television production and distribution. Nothing will change other than they may offer new methods of reaching into your wallet.

Nicely done. TV is a oligopoly that won't soon be dismantled much to the dismay of many here.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #21 of 59
Originally Posted by MacBook Pro View Post
The Walt Disney Cmpany
Time Warner
News Corporation
Viacom

 

What a great way to ruin a Friday.


As anyone can see, a few companies own the vast majority of television production and distribution. Nothing will change other than they may offer new methods of reaching into your wallet.

 

If Ma Bell could be destroyed, so can they. But unlike the telephone world, they won't even have the opportunity to recombine.

Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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post #22 of 59
Quote:
Originally Posted by Tallest Skil View Post

What a great way to ruin a Friday.

If Ma Bell could be destroyed, so can they. But unlike the telephone world, they won't even have the opportunity to recombine.

Difference being that Ma Bell was a monopoly.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #23 of 59
Quote:
Originally Posted by Tallest Skil View Post

What a great way to ruin a Friday.

I can't apologize. I only provide the facts (with some opinion). Interpret the facts as you will.
Quote:
Originally Posted by Tallest Skil View Post

If Ma Bell could be destroyed, so can they. But unlike the telephone world, they won't even have the opportunity to recombine.

There is a vast difference between the telecommunications monopoly enjoyed by AT&T until 1982 and the current state of mass media production and distribution as owned by a handful of companies today.


The only way to destroy the model is to "cut the cord." If enough people "cut the cord" then these robber barons will be forced to change their model.


Total Lobbying Expenditures by Company

The Walt Disney Company: $3,890,000
Time Warner: $3,548,000
News Corp: $6,340,000
Viacom: $1,400,000
Edited by MacBook Pro - 3/22/13 at 9:21am
post #24 of 59
Quote:
Originally Posted by buckalec View Post

And so it began. HBO and mainstream ABC could turn the tide. Great news.
The question is when will it end , and be replaced . 1smile.gif
post #25 of 59
Quote:
Originally Posted by tcasey View Post

i wont buy cable but i would buy hbo..i doubt im alone here..

 

It's all about Game of Thrones. I know quite a few people that would buy 3 months of HBO for this alone - me included.

It is useless for sheep to pass laws outlawing carnivorism when the wolf is of a different mind.
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post #26 of 59
Quote:
Originally Posted by Cyberzombie View Post

It's all about Game of Thrones. I know quite a few people that would buy 3 months of HBO for this alone - me included.


iTunes

Game of Thrones Season 1 (HD) USD $38.99
Game of Thrones Season 2 (HD) USD $38.99
post #27 of 59
Quote:
Originally Posted by MacBook Pro View Post

iTunes

Game of Thrones Season 1 (HD) USD $38.99
Game of Thrones Season 2 (HD) USD $38.99

Or $45 for 3 months worth of HBO and one can watch seasons 1&2 plus episodes of season 3 as soon as they air.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #28 of 59
Quote:
Originally Posted by ankleskater View Post


So that means my house will have a little box near the backdoor where the cable used to come in.

1biggrin.gif
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post #29 of 59
that's hot! i would so do this.
post #30 of 59
Quote:
Originally Posted by dasanman69 View Post

Or $45 for 3 months worth of HBO and one can watch seasons 1&2 plus episodes of season 3 as soon as they air.

Are you suggesting that HBO continually replays the same content? All the more reason not to subscribe.
post #31 of 59
If there is any doubt.

I have an agenda.

My agenda is saving you money.
post #32 of 59

Cool that HBO is even considering this but I'm still confused why so many people are interested in channels instead of programs.

 

Personally, I'd never ever subscribe to a channel.  What I want is the individual shows.  I could care less where they "air."  All HBO really needs to do is put their shows on iTunes (and other sell-through sites) in a more timely fashion.

 

I cut my cable cord about seven years ago and haven't looked back.  Channels are long since dead to me.  These days I have a Netflix streaming account paired with iTunes and miss out on very little.

post #33 of 59
Quote:
Originally Posted by MacBook Pro View Post


Are you suggesting that HBO continually replays the same content? All the more reason not to subscribe.

 

With an HBO subscription, you also get HBO Go and HBO On Demand, both of which provide unlimited access to all episodes of Game of Thrones, as well as all other current HBO original programs (and several past programs and a rotating monthly selection of about 400 movies). 

post #34 of 59
Quote:
Originally Posted by yensid98 View Post

Cool that HBO is even considering this but I'm still confused why so many people are interested in channels instead of programs.

 

Personally, I'd never ever subscribe to a channel.  What I want is the individual shows.  I could care less where they "air."  All HBO really needs to do is put their shows on iTunes (and other sell-through sites) in a more timely fashion.

 

I cut my cable cord about seven years ago and haven't looked back.  Channels are long since dead to me.  These days I have a Netflix streaming account paired with iTunes and miss out on very little.


Miss out on very little.  Don't watch much sports, do you?

 

It's all about revenue and numbers.  Game of Thrones alone accounts for about 10 million viewers on HBO for each episode (across all broadcast and digital platforms).  Assuming an average monthly subscription fee of about $15/month, that works out to $150 million PER MONTH from those viewers alone.  That's the math that HBO is working off of when they time the sell-through for their DVD/Blu-ray and digital download releases. 

 

If anything, the sell-through serves as an infomercial for the upcoming season.  The promotional value of the home video release can't be underestimated.  That's why HBO times the release for about one month prior to the new season premiere -- because it adds to the build up and it bumps up the subscription numbers.  With Game of Thrones, this scheduling certainly hasn't hurt sales -- the Season Two release broke all of HBO's first week sales records for both DVD/Blu-ray and digital download formats.

post #35 of 59
I love the HBOGO app on my iPad....use it all the time to watch movies and original series! Cinemax too! I think most large media companies will soon offer "pay as you go" type monthly subscriptions..it makes so much sense for consumers!
post #36 of 59
Quote:
Originally Posted by MacBook Pro View Post

Are you suggesting that HBO continually replays the same content? All the more reason not to subscribe.

No I'm saying all that content can be viewed on VOD and HBO Go.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
post #37 of 59
Quote:
Originally Posted by lkrupp View Post

Think about it. Netflix Hulu Plus= $16. Let's add another $10 for HBO. Then let's add some sports channel subscription, and a cooking channel. Get the picture? It doesn't take long for these subscription fees to mount up to the typical cable bill. In fact you could wind up with a bigger bill depending on your appetite. All on top of the of the cost for broadband service too. What about multiple HDTVs in the home? Even more bandwidth needed to increase overall cost. With data caps?

The a la carte model may sound attractive but it starts to add up quickly. Economy of scale and all that jazz. So I kind of chuckle at the "And the future slowly arrives" mindset.


That's the whole package right there.  If the industry goes to an a la carte model, then the cost for each channel will skyrocket.  For viewers that watch programs on several different channels, it would not take much to wind up paying more for fewer channels. 

 

The economics of the industry are built around bundling on the basic tier, and the carriage fees are based on having those channels available to nearly all subscribers.  For example, the carriage fees for ESPN average nearly $5 per cable/satellite subscriber.  If ESPN was placed on an a la carte menu, the subscription charge would be a lot higher than $5 a month, since not every subscriber will select ESPN and ESPN would need to price the service such that they can maintain their revenue levels.  Same goes for all other basic tier channels. 

 

The prevailing mindset on so many of these so-called cord cutting threads is that if somebody pays for broadband service, then they are somehow entitled to programs for free or for cheap.  It doesn't work that way.  If someone wants the programming, then it needs to be paid for somewhere along the line -- whether that's with commercials, carriage fees, subscriptions, etc.  If it's not paid for, then the programming doesn't get produced or it will need to be cheapened. 

 

But, even broadband service isn't immune from potential carriage fees getting imposed.  Take for example, ESPN3.com, which is ESPN's live game streaming service.  It's free and it streams over 3,000 live events annually, including hundreds of events that aren't even televised on ESPN's broadcast channels.  The catch?  In order to access ESPN3.com, you need to get your broadband service from an ISP that already pays ESPN a carriage fee.  In other words, if you can access the ESPN3.com website, then the cost for the service has already been bundled into your broadband service. Rather than billing customers directly for access to ESPN3, they decided to go straight to the ISPs.  And that's an avenue that remains open for all other highly rated channels.

 

For now, the carriage fees are very low because the ratings are very low (ESPN estimates that less than 0.1% of their viewing occurs via streaming).  Most major ISPs decided to simply pay ESPN rather than risk losing subscribers.  But, what will happen if/when ESPN's streaming viewership increases to meaningful levels?  How much will they charge per subscriber at that point?  And what if other broadcasters follow ESPN's lead and starting demanding carriage fees of their own from the ISPs?  In that scenario, the ISP becomes the bill collector for the content providers, serving the role that cable/satellite providers currently have. 

post #38 of 59
Quote:
Originally Posted by Woochifer View Post


That's the whole package right there.  If the industry goes to an a la carte model, then the cost for each channel will skyrocket.  For viewers that watch programs on several different channels, it would not take much to wind up paying more for fewer channels. 

The economics of the industry are built around bundling on the basic tier, and the carriage fees are based on having those channels available to nearly all subscribers.  For example, the carriage fees for ESPN average nearly $5 per cable/satellite subscriber.  If ESPN was placed on an a la carte menu, the subscription charge would be a lot higher than $5 a month, since not every subscriber will select ESPN and ESPN would need to price the service such that they can maintain their revenue levels.  Same goes for all other basic tier channels. 

The prevailing mindset on so many of these so-called cord cutting threads is that if somebody pays for broadband service, then they are somehow entitled to programs for free or for cheap.  It doesn't work that way.  If someone wants the programming, then it needs to be paid for somewhere along the line -- whether that's with commercials, carriage fees, subscriptions, etc.  If it's not paid for, then the programming doesn't get produced or it will need to be cheapened. 

But, even broadband service isn't immune from potential carriage fees getting imposed.  Take for example, ESPN3.com, which is ESPN's live game streaming service.  It's free and it streams over 3,000 live events annually, including hundreds of events that aren't even televised on ESPN's broadcast channels.  The catch?  In order to access ESPN3.com, you need to get your broadband service from an ISP that already pays ESPN a carriage fee.  In other words, if you can access the ESPN3.com website, then the cost for the service has already been bundled into your broadband service. Rather than billing customers directly for access to ESPN3, they decided to go straight to the ISPs.  And that's an avenue that remains open for all other highly rated channels.

For now, the carriage fees are very low because the ratings are very low (ESPN estimates that less than 0.1% of their viewing occurs via streaming).  Most major ISPs decided to simply pay ESPN rather than risk losing subscribers.  But, what will happen if/when ESPN's streaming viewership increases to meaningful levels?  How much will they charge per subscriber at that point?  And what if other broadcasters follow ESPN's lead and starting demanding carriage fees of their own from the ISPs?  In that scenario, the ISP becomes the bill collector for the content providers, serving the role that cable/satellite providers currently have. 

This is exactly what HBO is proposing and is the reason this is such a bad idea. The content producers and distributors are simply repackaging the same content in a different wrapping paper and ribbon.
post #39 of 59
Quote:
Originally Posted by MacBook Pro View Post

The only way to destroy the model is to "cut the cord." If enough people "cut the cord" then these robber barons will be forced to change their model.

 

 

Kabletown...uh...I mean Comcast, had around 400,000 of their customers (net) "cut the cord" last year:
 

http://www.businessinsider.com/comcast-loses-nearly-400000-subscribers-in-last-year-2012-8

 

...including me 1smile.gif

 

Hey, when my 80+ year old father-in-law is complaining of the way his cable bill keeps going up unexpectedly, and starts sending me stories about how you can get all your TV over the internets these days, I think a tipping point may be nearing...

post #40 of 59
Quote:
Originally Posted by digitalclips View Post

And the future slowly arrives. One day cable subscription will be remembered like milk deliveries.

Bingo! I'm a cable cutter going on 5 years now....I will definitely get this just for Real Time! :)

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