HBO Go looks great, functions well, and has what people want – great content. It’s so great, people are willing to pay for it. So why can’t you buy HBO Go without paying for cable?
To understand why you can’t buy HBO Go a la carte, you first need to see things from HBO’s point of view. When HBO thinks about what their product is and who their customer is, it’s very different than what you might imagine. HBO’s product is not viewers or ratings and it’s not good television programming.
HBO’s product is cable subscriptions. HBO’s primary purpose is to get people to sign up for cable and satellite subscriptions. That is where they make a huge majority of their revenue and the core basis of their fiscal planning and success.
This has been going on a while. When the Sopranos was popular, there were entire billboard campaigns advertising to subscribe to cable to be able to watch the show. And it was very, very successful. Seeing that this kind of Emmy winning programming was able to directly drive cable company results, the game changed for HBO.
Pouring more money into making great shows, they made themselves viewed as an essential channel, able to command much more money from the cable and satellite distributors.
HBO’s customer is not the viewer at home or advertising agencies.
HBO’s customers are the cable and satellite companies. The same companies that ‘cable cutters’ are trying to get away from are the ones that HBO sees as it’s primary customer.
And why wouldn’t you want them as your customer? They pay billions of dollars, are willing to sign 8-10 year contracts, and help market your brand.
As well written, passionate, threatening, pleading, and angry as postings on the internet are, they simply can’t compare to the cold hard cash and spreadsheets that drive HBO’s decision to use HBO Go to drive cable subscriptions and not direct revenue.
They are not alone in this. The entire TV Everywhere ecosystem is being built to help try to buttress and reinforce the value of paying for a cable or satellite subscription. Many different networks and channels are signing on to the plan, because of the same fact of who their primary customer is currently.
Yes, you don’t pay now and will just pirate the show instead of paying for it and that’s lost revenue to HBO. Yes, but looking at the scale of possible conversions to paying a la carte versus angering the cable companies, it’s a no brainer to ignore the loss to downloading.
Yes, the internet is changing distribution models and the current system can’t last. Yes, but as long at the billions flow and the executives involved are rewarded for revenue numbers and not innovation, don’t expect change in the existing model.
Yes, it’s pissing you off and you’re shaking your fist at the stupidity. Yes, but when the distribution wars start in earnest and over-the-top television begins to crack the models of the existing distribution system, the future becomes unpredictable and who knows what’s going to be the winning paradigm.
But until the glorious future arrives, HBO will keep their content behind the walls of the cable and satellite companies, reaping huge profits and ensuring an endless stream of frustrated blog posts, angry tweets, and busy bittorrent trackers.
