Why HBO's president panned Internet streaming (and Forbes' linkbait)

Their strategy is smart and reasonable if people perceived HBO as delivering great shows that are worth paying extra useless channels to get, which I don't think it is (but I'm french and not very exposed to their marketing ).<p>I fear that HBO is living in the Bubble of their Brand like so many companies, thinking they are the best thing ever and that customers should be grateful whatever way they accept to provide stuff. There is a trend toward simpler deals now where you pay for what you want, not for 3, 4 goodies you never asked.

I just want to add that the other HN story title was completely incorrect linkbait as well: "HBO CEO: '...an internet-based model [for TV] is just a fad'".<p>It wasn't HBO's CEO, and he didn't use the word "fad." That word was from the Forbes writer. Also, it wasn't a direct quote.

&#62; What you don't want to do is to pursue a distribution channel over here [ed: the internet], where you think, well, let's go around the affiliate and we'll get a couple hundred thousand subs. But the promotional, and packaging support we get over here [ed: the affiliate networks], which, by the way, is the foundation of our 30 million subs<p>I'll believe they've done the market research to believe that "couple hundred thousand" number, but I have a harder time seeing that offering their own, independently subscribable[1] distribution channel will affect their core business model much more than piracy already is. From my perspective, they're just leaving money on the table for no clear gain.<p>[1]bear in mind that it's only whether or not you can subscribe to HBOgo independently of owning a tv and basic cable subscription that should be the issue, since they clearly believe offering streaming is good for both them and their customers.

I'll grant all that, but here's my 2 cents.<p>I love television as an art form. I appreciate good writing, good action, good direction, and all of the other skills that go into TV. I like specific shows, and I like the ability that television has to tell huge stories that spread out over years.<p>Between work, excercise, and other forms of entertainment, I don't have a lot of time to watch TV, so my idea of a "premium experience" is being able to watch shows I really value when I can fit them into my life.<p>I've got no interest in broadcast TV or cable. I remember doing a business trip that took me to NYC and LA and seeing both cities saturated with billboards for a new show. I thought heck, maybe I'll watch it. Well, I'm working like a dog in front of the computer and going to back-to-back meetings, so the only time I've got to go for a run out in Hollywood is late in the evening, so I miss the 10:00 start of the show and get back to my hotel at 10:10.<p>When I do watch cable, I'm always shocked at how hard it can be to find something entertaining. Sometimes it seems like nothing but Spongebob Square pants and reality shows about people who clip coupons and hang out at pawn shops.<p>There's no doubt at all that some great T.V. is being made today, but the conventional distribution system mostly shows junk that is subsidized by a system that doesn't let people speak with their dollar.

HBO's CEO is rational. When I read the excerpts though, it reminded of the time before ink jet printers were dominant. I believe Epson on top, and they were giving a lot of valid reasons for sticking with dot matrix production without a good plan to transition into ink jet printers. Well fast forward some years later, and you have HP eating their lunch.

&#62; It's not really HBO's fault that Game of Thrones is pirated so much. It's the fault of the entire ecosystem.<p>It's the fault of the entire ecosystem that a company is targeted by pirates when it chooses to make a small number of high-quality TV shows with excellent production value and put them behind an expensive paywall only available to people with cable TV subscriptions?<p>I mean, I understand the rationale of HBO in accepting the cost of piracy in order to maintain a lucrative symbiosis with cable affiliates. But I'm sure they recognize that in doing so they cause a significant amount of piracy, and it harms everyone in the TV business, not just HBO.<p>There's basically two driving forces behind piracy. One is price, but there is a good argument to be made that people who pirate because they couldn't otherwise afford to pay otherwise don't actually affect the bottom line very much. The other is universality. Ten dollars a month to a usenet provider or VPN service will give access to every single major movie, TV show, and album within a few days of release. It comes in multiple DRM-free formats, and can be played basically anywhere.<p>So long as piracy has a distinct service and price advantage over HBO, they are encouraging piracy. And the worst part for TV producers is that there is a negative network effect: once someone spends the opportunity cost to pirate Game of Thrones, the marginal cost of pirating something else goes way down, and services that do compete favorably with piracy from a service perspective like Netflix and iTunes suffer as well.

I've started using HBO GO, both on my iMac and especially on my iPad.<p>I must say that I do like it. I'm glad that there are still places where I can pay money and get content like Game of Thrones. I hope that doesn't go away; if it does, we all lose (yes, even the pirates).<p>I really don't get people bitching about the cost. I spend more on a date with my wife than the entire cable + HBO package, which we get to use all month. It's more than worth it, even if I never watched anything else but HBO.

The author published a correction :<p>"Note: An earlier edition of this piece described comments made by Eric Kessler that described his views of cord-cutting as a fad or “temporary phenomenon.” Kessler said that he viewed cord-cutting as “minimal” and a result of “macroeconomic conditions” indicating that should economic conditions improve cord-cutting will decrease. To me and others who have written about this, those words indicate that cord-cutting is a problem that will eventually go away as the economy improves – hence a fad or temporary phenomenon. It’s important to note that Kessler himself did not say “fad” or “temporary phenomenon” but his words and sentiment in the video do imply that he thinks the problem of cord-cutting is small and will likely go away, and that targeting the cord-cutting audience doesn’t make business sense. Apologies for the lack of clarity here."

I could have sworn I heard this guy talking about how the TV model is great, because the whole distribution channel is outsourced through affiliates who are licensed the content... and then talk about how with the Internet, most content is licensed through distributors, but their advantage is that they don't license the content, so they own the entire experience.<p>I don't get why everyone is saying he is so rational/logical. Seems like he is talking out of both sides of his mouth.

Prediction: within 2 years they will have a "subscribe now" on YouTube for HBO and other networks and in 3 years YouTube will be the biggest affiliate for them.