HBO is owned by Time Warner. That's why they say these crazy things and make their content so hard for people to view. Time Warner wants to protect their cable business at all costs.
If HBO were independent you wouldn't see these stupid comments. It's in HBO's best interests to get their content seen by as many people as possible. That, however, is not in the best interest of Time Warner.
HBO Go is largely a joke. Not only does it require a cable subscription, it can't be used on the go. There is no offline caching of shows and to stream shows it requires a pretty strong connection: http://interchangeproject.org/2012/05/10/why-is-hbo-go-not-a...
Time Warner Cable is actually not owned by Time Warner, which is exclusively (or getting there) a content company.
The issue here is actually that the cable companies (TWC included, now as one of many clients of Time Warner's) provide huge dollars in a lump sum kind of way. The internet is still not a proven business model for distributing shows profitably.
While I agree with others in this thread that an a la carte model is the correct one and would likely work, there is very little middle ground for them (HBO, TW etc.) in between selling their shows to cable companies and going completely independent and distributing through the internet. As soon as they start doing that the cable companies will stop paying for their shows, and then at best there will be a long period of time while people switch over to consuming everything over the internet. Imagine how long it's going to take IE8 to disappear due to the fact that you can't upgrade to IE9+ w/o Vista+. Now imagine the upgrade I have to do is swapping out a cable box for a computer. Will you survive that gap, or will cable companies, wanting to continue to capitalize on the networks they've built, simply replace your content with someone else's?
When we were subscribing I was able to use HBO Go fine on 4G (TMobile, Seattle area).
My bugaboo in this area is international football. Getting Premier League games in the states is a real pain. I'm sure there's equally entrenched interests there.
I am 25 years old. I have never paid for cable and I have numerous shows that I enjoy. I would GLADLY pay to watch some of my favourite shows, Game of Thrones included. However, as I currently reside in Canada, I can't even watch Hulu - Netflix Canada sucks. I have money; your show is not attainable through monetary means and I will not purchase cable. What is a fella to do?
Rent a cheap VPS with a provider in the US and install openvpn on it. You can actually get one of those for 5 USD/month. Find them here: http://www.lowendbox.com/.
I don't buy bread. I have sandwiches that I would like to make, but I can't eat a whole loaf before it goes bad, so I don't buy it. I would gladly buy half a loaf, but my grocery store doesn't sell half loaves. If they won't make a half loaf to suit my needs and what I want to pay, I should just be able to steal whole loaves?
Exactly the same situation here. I can't consume media "legitimately" in many circumstances even if I wanted to thanks to arbitrary restrictions regarding regions and DRM.
The problem in Canada is that Bell Media owns the Canadian distribution rights to many of the popular programs that aren't already available via services like Netflix.
Even if everyone in the USA agrees with you, Bell won't. They have far too much money invested in TV broadcasting technologies, and too little tied up in Internet infrastructure. There's no real upside to them providing you the content online, because not only will they'll lose their broadcasting revenue, but you'll fill up their oversubscribed tubes, making their internet services more costly to operate. A token fee for the program isn't going to offset that.
As the article says and as a lot of people including me keep repeating: I would pay practically ANY amount for movies & shows I want to see. I live in the EU and you have to struggle to see shows like Game of Thrones legally (basically, fly to the US or wait forever). That's not an option. Worldwide (!) distribution at the same time (!) for an amount they make a profit on would be fine with me and I know many others. It's not about money; it's about that the world has changed; people have instant worldwide communication (via Facebook for instance) about the unfolding of, for instance, this series, yet the viewing is not worldwide. In the olden days, you didn't know about your friends in the US and what they watched, so you didn't mind waiting a year for a series to get on local tv. Hell, you probably didn't even know the series existed until it aired. As long as this is not changed, people will keep downloading as there is no alternative.
Oh, and why is there no feedback forum/something for these companies. In open discussion they could see what their real audience wants instead of staring at the falling numbers and drawing conclusions from suspected causalities!?
This would be so easy to fix if the network heads weren't so ignorant:
Make a Netflix style distribution system, allow users to subscribe a la carte to a fixed number of channels on a tiered system (i.e. I can select up to 15 channels for $29.99 a month or 30 channels for $59.99 a month), and make it all on demand. The infrastructure is there, the tech wouldn't be that hard to set up, and it would make a BOATLOAD of money for both the networks and the operators.
Honestly, it sounds like an ego game. They don't understand how these things work so they go on the defensive as opposed to learning and improving their business. Sad.
The Time Warner CEO (which owns HBO) is on the Charlie Rose show now. One interesting exchange:
"How far off are we from a big movie being released simultaneously in theaters as well as over every platform available? And what will be the model for the release of the movie on the platform?"
"There is a bunch of companies and investors that put up your local multiplex. Lately they've been trying to make the place cleaner, the screens to be crisper, you've got hi-def. And that creates a certain viewer experience to go to the theater and see it that way. So as we think about the fact that can you release simultaneously what happens if you do that, we are all trying to be as thoughtful as we can about doing this in a way that does not undermine the quality of the theater experience. Not take away all the business..."
"You still haven't answered my question."
"Right... so that's one answer... the other answer is if you delay a while to give the theaters a chance to make a long run sell on tickets, what you're doing, and you see it all over the world, is you create gaps for piracy where..."
So there you go.
These guys aren't ignorant, they are maxing out profits. Not everyone is on Hulu yet. This is a really big country and the economics don't make sense for them yet.
He also directly disagreed with the HBO CEO by saying HBO Go "is working" and: "some of the connections where you try to sign on are not as good as they should be and that's what we've got to fix"
I suspect it's more complicated than that. Netflix is $15 a month, cable subscribers routinely pay $100 or more. And I'd bet that HBO and its properties get a reasonably-sized chunk of that. That "BOATLOAD" has a lot of scaling to do.
The Networks don't want that. ESPN alone commands $5/a month. Don't want that? Disney has blocked all it's other channels - ABC/ABC family, Disney, etc as a huge block - that you MUST get. Want HD? another fee.
Cable is increasingly becoming the have's/have not's.
it would make a BOATLOAD of money for both the networks and the operators.
Only if by "boatload" you mean one of those little toy boats that floats in the bathtub. Last year, NBC, the lowest rated broadcast channel, reported $4.2 billion in ad revenue (which represents a substantial decrease from the year before). At the top end, CBS reported $6.3 billion in ad revenue. (Source: http://adage.com/article/mediaworks/2010-rebound-broadcast-t...)
HBO clocked in at just over $1 billion (estimated, final numbers pending) in revenue for 2011. (http://www.hollywoodreporter.com/news/hbo-top-1-billion-inte...)
In order for a la carte to generate the same amount of revenue for a single broadcast channel, at say, $2/month, NBC alone would need 175 million subscribers, while HBO would need nearly 42 million subscribers (or roughly 1/2 again its current subscriber base).
It's not an ego game, it's basic arithmetic. Internet streaming may be the future, but it won't be the present until it gets a lot more expensive.
You cannot help but laugh at such a comment. This is anecdotal evidence but increasingly I've noticed people connecting their flat screen TV to their computer and use that as their main source of media. And these are people that are not technical in the least.
HBO does not need your money, they do really well selling their subscriptions. HBO's business is based on charging $200/year to subscribers in exchange for exclusive content. By offering a la carte shows at $9.99 or whatever they would be breaking the exclusivity that they sell to their real customers. The pirates' argument seems to be that HBO does not have the right to produce exclusive content for their subscribers, as if access to all entertainment is some fundamental right, it is not.
Here's a hint: paying $9.99 (or $0.99 or $0.01, if that's the price that's set) makes you a real customer. The definition of customer is "someone who exchanged his money for your goods/services"; it does not matter the quantity. All money is equally green.
Exclusivity is another name for rent-seeking. HBO has every right to publish (and not publish) its content in the manner of its choosing, but I don't have to like it.
I bought the Game of Thrones books instead; which I was able to do, at physical and virtual locations, individually or in a boxed set, at a fair and reasonable price, at my leisure. Oh, and I can resell them after I've finished reading them.
You have to realize, HBO's customers are not the subscribers. HBO's customers are cable companies. The cable companies deal with the subscribers and just keep track of how much to pay HBO every month. HBO doesn't even know who the subscribers are! They don't have any identification or billing information. That's why they can't sell to customers directly.
They don't have any identification or billing information. That's why they can't sell to customers directly.
(Shrug) All they have to do is ask. It's as if they don't want to be able to sell directly to their viewers.
Other publishing industries are frantic at the thought of middlemen like Apple and Amazon owning subscriber relationships. Yet HBO and Showtime seem to actively prefer it that way. I don't get it... don't they understand the risks of putting all of their eggs in the cable provider's basket?
Cable television requires a subscription with a cable company, telecom, or DTH satellite operator.
Broadband internet requires a subscription with a cable company, telecom, or DTH satellite operator.
An "internet-based model" has no impact on the supply chain. Cable companies, telecoms, and DTH satellite providers still sit between the content providers and the consumer.
> Now, it’s important to note the reason for all this piracy: lack of access to the show for people who can’t afford, or choose not to purchase, a cable-TV subscription.
Which, for the purpose of watching Game of Thrones, includes everybody who does not live in the US (and the UK for Game of Thrones, since it broadcasts on Sky the day after).
That's roughly 6.6 billion people "without cable access" for the purpose of watching GoT, even taking a third of that to account for people who have high-speed internet access and understand spoken english reasonably well you're still talking about a good 2 billion people who can see the series's hype online and have no way to watch the show legally while it is hyped and they can discuss it with other fans.
An OTA broadcast-based model [for TV] was a bit stronger than a fad. What was it that made it old-fashioned and bereft of really interesting content? Oh yeah, HBO and its ilk.
It always amazes me when dictators who succeed via coup d'état think they'll live forever.
Not necessarily defending this guy (who I know nothing about) or anything, but I really hate it when somebody's paraphrase is put in quotation marks as if it's a direct quote.
"HBO co-president Eric Kessler has said he thinks the move away from traditional television to an internet-based model is just a fad that will pass – a 'temporary phenomenon' tied to the down economy. "
The only actual quote here is 'temporary phenomenon', which could have all kinds of contexts.
HBO is bound by all kinds of license agreements to the cable providers and that is their bread and butter. They simply cannot provide Internet purchasing of their content. You don't really know what the CEO actually believes because saying the Internet is a fad plays directly into his market (the cable companies).
At this point in time, it might make more economic sense for HBO to ignore the Internet. Although, I certainly hope they're planning for the future. And if they are, it would still be foolish to let the cable companies know that.
My reaction as well. Will the Tv and movie studios learn from the lesson of Napster and iTunes? With stories like these, it doesn't seem likely.
The studios should be hiring engineers and UI folk; not lawyers. Time Warner should buy the Pirate Bay and charge a subscription or download fee while improving the UI. Or simply offer downloads on their website.
College sophomores figured out the distribution model fifteen years ago. This is silly.
It wasn't a while ago someone from DEC made bone headed prediction -
"There is no reason anyone would want a computer in their home."
I don't understand why media companies don't get it that future is Internet. iTunes and Netflix are shining examples of that. What more evidence do they want?
That was an out of context quote by Ken Olsen, founder of Digital Equipment Corporation. In fact, Ken Olsen was a hacker, just like us, and had a computer in his house which he used for work:
I think certain MBA types totally fail to predict disruptive business trends and that's because they never understand full implications of any thing. This is a problem with anybody who looks things only from a abstract sense.
Like many have mentioned in this thread, People said similar things about computers in the past.
This is why its so important to understand what you are dealing with, every aspect of your business sometime you need to get down to the grass root levels to understand.
Merely 'I can get this job done by hiring techies' doesn't always help all the time.
Is there an upside to making a statement like this for a guy in his position? I am trying to think because the potential downside(becoming the laughing stock) in future seems huge.
It seems monopolistic and anti-competitive for a content distribution company to also own a content creation company. The government should get in there and break that shit up. I think HBO would find it quite lucrative to be able to directly sell their content to their customers. When you find yourself in a situation where it's easier to download a show off of bittorrent illegally than it is to get it legitimately from the content creator directly, something is messed up.
[+] [-] pwthornton|14 years ago|reply
If HBO were independent you wouldn't see these stupid comments. It's in HBO's best interests to get their content seen by as many people as possible. That, however, is not in the best interest of Time Warner.
HBO Go is largely a joke. Not only does it require a cable subscription, it can't be used on the go. There is no offline caching of shows and to stream shows it requires a pretty strong connection: http://interchangeproject.org/2012/05/10/why-is-hbo-go-not-a...
[+] [-] wdewind|14 years ago|reply
The issue here is actually that the cable companies (TWC included, now as one of many clients of Time Warner's) provide huge dollars in a lump sum kind of way. The internet is still not a proven business model for distributing shows profitably.
While I agree with others in this thread that an a la carte model is the correct one and would likely work, there is very little middle ground for them (HBO, TW etc.) in between selling their shows to cable companies and going completely independent and distributing through the internet. As soon as they start doing that the cable companies will stop paying for their shows, and then at best there will be a long period of time while people switch over to consuming everything over the internet. Imagine how long it's going to take IE8 to disappear due to the fact that you can't upgrade to IE9+ w/o Vista+. Now imagine the upgrade I have to do is swapping out a cable box for a computer. Will you survive that gap, or will cable companies, wanting to continue to capitalize on the networks they've built, simply replace your content with someone else's?
[+] [-] msg|14 years ago|reply
My bugaboo in this area is international football. Getting Premier League games in the states is a real pain. I'm sure there's equally entrenched interests there.
[+] [-] mattwdelong|14 years ago|reply
You do not like the answer.
[+] [-] reginaldo|14 years ago|reply
[+] [-] mpat|14 years ago|reply
[+] [-] MCompeau|14 years ago|reply
[+] [-] randomdata|14 years ago|reply
Even if everyone in the USA agrees with you, Bell won't. They have far too much money invested in TV broadcasting technologies, and too little tied up in Internet infrastructure. There's no real upside to them providing you the content online, because not only will they'll lose their broadcasting revenue, but you'll fill up their oversubscribed tubes, making their internet services more costly to operate. A token fee for the program isn't going to offset that.
[+] [-] calyth|14 years ago|reply
[deleted]
[+] [-] tluyben2|14 years ago|reply
[+] [-] tluyben2|14 years ago|reply
[+] [-] rglover|14 years ago|reply
Make a Netflix style distribution system, allow users to subscribe a la carte to a fixed number of channels on a tiered system (i.e. I can select up to 15 channels for $29.99 a month or 30 channels for $59.99 a month), and make it all on demand. The infrastructure is there, the tech wouldn't be that hard to set up, and it would make a BOATLOAD of money for both the networks and the operators.
Honestly, it sounds like an ego game. They don't understand how these things work so they go on the defensive as opposed to learning and improving their business. Sad.
[+] [-] draggnar|14 years ago|reply
"How far off are we from a big movie being released simultaneously in theaters as well as over every platform available? And what will be the model for the release of the movie on the platform?"
"There is a bunch of companies and investors that put up your local multiplex. Lately they've been trying to make the place cleaner, the screens to be crisper, you've got hi-def. And that creates a certain viewer experience to go to the theater and see it that way. So as we think about the fact that can you release simultaneously what happens if you do that, we are all trying to be as thoughtful as we can about doing this in a way that does not undermine the quality of the theater experience. Not take away all the business..."
"You still haven't answered my question."
"Right... so that's one answer... the other answer is if you delay a while to give the theaters a chance to make a long run sell on tickets, what you're doing, and you see it all over the world, is you create gaps for piracy where..."
So there you go.
These guys aren't ignorant, they are maxing out profits. Not everyone is on Hulu yet. This is a really big country and the economics don't make sense for them yet.
He also directly disagreed with the HBO CEO by saying HBO Go "is working" and: "some of the connections where you try to sign on are not as good as they should be and that's what we've got to fix"
[+] [-] ajross|14 years ago|reply
[+] [-] unexpected|14 years ago|reply
Cable is increasingly becoming the have's/have not's.
[+] [-] res0nat0r|14 years ago|reply
http://news.ycombinator.com/item?id=3863847
[+] [-] unknown|14 years ago|reply
[deleted]
[+] [-] rprasad|14 years ago|reply
Only if by "boatload" you mean one of those little toy boats that floats in the bathtub. Last year, NBC, the lowest rated broadcast channel, reported $4.2 billion in ad revenue (which represents a substantial decrease from the year before). At the top end, CBS reported $6.3 billion in ad revenue. (Source: http://adage.com/article/mediaworks/2010-rebound-broadcast-t...) HBO clocked in at just over $1 billion (estimated, final numbers pending) in revenue for 2011. (http://www.hollywoodreporter.com/news/hbo-top-1-billion-inte...) In order for a la carte to generate the same amount of revenue for a single broadcast channel, at say, $2/month, NBC alone would need 175 million subscribers, while HBO would need nearly 42 million subscribers (or roughly 1/2 again its current subscriber base).
It's not an ego game, it's basic arithmetic. Internet streaming may be the future, but it won't be the present until it gets a lot more expensive.
[+] [-] felipemnoa|14 years ago|reply
You cannot help but laugh at such a comment. This is anecdotal evidence but increasingly I've noticed people connecting their flat screen TV to their computer and use that as their main source of media. And these are people that are not technical in the least.
[+] [-] guelo|14 years ago|reply
[+] [-] krakensden|14 years ago|reply
[+] [-] kbolino|14 years ago|reply
Exclusivity is another name for rent-seeking. HBO has every right to publish (and not publish) its content in the manner of its choosing, but I don't have to like it.
I bought the Game of Thrones books instead; which I was able to do, at physical and virtual locations, individually or in a boxed set, at a fair and reasonable price, at my leisure. Oh, and I can resell them after I've finished reading them.
Funny, that.
[+] [-] sp332|14 years ago|reply
[+] [-] CamperBob2|14 years ago|reply
(Shrug) All they have to do is ask. It's as if they don't want to be able to sell directly to their viewers.
Other publishing industries are frantic at the thought of middlemen like Apple and Amazon owning subscriber relationships. Yet HBO and Showtime seem to actively prefer it that way. I don't get it... don't they understand the risks of putting all of their eggs in the cable provider's basket?
[+] [-] wmf|14 years ago|reply
[+] [-] mpat|14 years ago|reply
Broadband internet requires a subscription with a cable company, telecom, or DTH satellite operator.
An "internet-based model" has no impact on the supply chain. Cable companies, telecoms, and DTH satellite providers still sit between the content providers and the consumer.
[+] [-] masklinn|14 years ago|reply
Which, for the purpose of watching Game of Thrones, includes everybody who does not live in the US (and the UK for Game of Thrones, since it broadcasts on Sky the day after).
That's roughly 6.6 billion people "without cable access" for the purpose of watching GoT, even taking a third of that to account for people who have high-speed internet access and understand spoken english reasonably well you're still talking about a good 2 billion people who can see the series's hype online and have no way to watch the show legally while it is hyped and they can discuss it with other fans.
[+] [-] antidoh|14 years ago|reply
It always amazes me when dictators who succeed via coup d'état think they'll live forever.
[+] [-] psykotic|14 years ago|reply
http://www.telegraph.co.uk/technology/news/7874307/Prince-th...
[+] [-] etfb|14 years ago|reply
[+] [-] contextfree|14 years ago|reply
"HBO co-president Eric Kessler has said he thinks the move away from traditional television to an internet-based model is just a fad that will pass – a 'temporary phenomenon' tied to the down economy. "
The only actual quote here is 'temporary phenomenon', which could have all kinds of contexts.
[+] [-] DiabloD3|14 years ago|reply
[+] [-] nazgulnarsil|14 years ago|reply
If I was an HBO shareholder I'd laugh while I sold.
[+] [-] wvenable|14 years ago|reply
At this point in time, it might make more economic sense for HBO to ignore the Internet. Although, I certainly hope they're planning for the future. And if they are, it would still be foolish to let the cable companies know that.
[+] [-] scelerat|14 years ago|reply
The studios should be hiring engineers and UI folk; not lawyers. Time Warner should buy the Pirate Bay and charge a subscription or download fee while improving the UI. Or simply offer downloads on their website.
College sophomores figured out the distribution model fifteen years ago. This is silly.
[+] [-] dm8|14 years ago|reply
"There is no reason anyone would want a computer in their home."
I don't understand why media companies don't get it that future is Internet. iTunes and Netflix are shining examples of that. What more evidence do they want?
Edit: Added Netflix reference
[+] [-] lesterbuck|14 years ago|reply
http://en.wikipedia.org/wiki/Ken_Olsen#Quotations
[+] [-] DiabloD3|14 years ago|reply
[+] [-] kamaal|14 years ago|reply
Like many have mentioned in this thread, People said similar things about computers in the past.
This is why its so important to understand what you are dealing with, every aspect of your business sometime you need to get down to the grass root levels to understand.
Merely 'I can get this job done by hiring techies' doesn't always help all the time.
[+] [-] badclient|14 years ago|reply
[+] [-] justncase80|14 years ago|reply
[+] [-] dataisfun|14 years ago|reply
[+] [-] JeremyBanks|14 years ago|reply