HBO Decides It Still Isn't Difficult Enough To Watch HBO Shows

Re:HBO Decides It Still Isn't Difficult Enough To Watch HBO ... by bsandbox on Thursday April 19, 2012 @01:33PM (#3864163)

Certainly possible that they would make more money, but I doubt it. Doing some (very) rough math, HBO has about 28M subscribers. Cable customers pay $18 bucks a month for HBO, of which HBO usually gets 50%. So an overnight change in the business model would require 28M subscribers at about $9 / month.

Just as a point of comparison, Netflix, with a much larger catalog of shows and movies, has something of the order of 25M subscribers

Obviously an overnight change would not happen, there would be a transition over several years and the streaming subscribers may well be supplementary to existing subscribers. But during the transition, cable company partnerships would be strained and existing revenue would be at risk. Not to mention the capital investment required to provide the content reliably, dealing with the multitude of streaming devices, providing customer support, marketing the product directly to consumers and all the other things that cable companies take care of (albeit badly). Netflix is making bold changes in its business model and it's certainly not an easy thing to do.

Ultimately, HBO's core competency is in creating amazing content. It's arguable if they'd make more money by changing their business model, but I'd wager that HBO execs simply do not want to have to deal with all the distractions from their core mission that would occur by doing so.

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Re:HBO Decides It Still Isn't Difficult Enough To Watch HBO ... by Osiris on Thursday April 19, 2012 @02:59PM (#3864547)

You're assuming that people would drop cable and buy through streaming as opposed to maintaining the same 28M subscribers and ADD additional streaming customers. If they charged $9/mn, I have a hard time seeing how that could be a net loss. Even if some subscribers switch from cable to streaming, they wouldn't lose revenue.

The only way they could lose revenue is if current subscribers dropped cable and didn't go with streaming, which seems unlikely to me.

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Re:HBO Decides It Still Isn't Difficult Enough To Watch HBO ... by wpietri on Thursday April 19, 2012 @03:53PM (#3864781)

You're not thinking of this from the perspective of a cable company.

Cable companies are already losing subscribers. They will do everything they can to discourage people from defecting to broadband downloads. One of the most obvious things they can do is to have exclusive content. Which means they would be smart to put immense pressure on HBO to stay out of the distribution business.

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Re:HBO Decides It Still Isn't Difficult Enough To Watch HBO ... by _delirium on Thursday April 19, 2012 @03:18PM (#3864638)

Depends to some extent on what the cable companies do. If they lose their exclusive relationship with HBO, they might move towards giving HBO a worse deal, in terms of bundling and revenue share, which could be a significant hit, at least near-term.

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