How much would you pay to receive HBO without having to first shell out about $50 a month for basic cable or satellite service? The range for most fans seems to be $10 to $20 a month — with a lot of people settling on $12 — according to a web site, Take My Money, HBO, introduced last night to highlight consumer interest in receiving HBO outside the pay TV ecosystem. “We pirate Game of Thrones, we use our friend’s HBOGO login to watch True Blood…Please HBO, offer a standalone HBOGO streaming service and Take My Money!,” says the site created by web designer Jake Caputo. Visitors can type in how much they’d be willing to pay, and the site feeds it to Twitter in an effort to “let HBO know we want it and we will pay.” HBO doesn’t want to talk about the effort. Instead it tweeted: “Love the love for HBO. Keep it up.” But it indicated that it won’t change its business model by linking to a TechCrunch article that says “there’s no way that HBO could make up in online volume the number of subscribers it would lose from cable.” The story “has it right,” according to the HBO tweet. Wells Fargo Securities analyst Marci Ryvicker reached a similar conclusion in January when she initiatied coverage of Time Warner. A direct-to-consumer HBO GO “would spur both cord shaving and cord cutting, hurting not just (Time Warner’s) portfolio of cable networks, but rather, the entire pay-TV ecosystem in the United States,” she said.


It might make sense given their relationships with cable providers, but ultimately it’s short-sighted. Maybe they wouldn’t be able to make up for the loss charging $10-$20 a month per individual subscriber, but they shouldn’t shun the idea of charging a higher fee per show season. That might actually spur people to pay that $10-$20/month through their cable provider after paying say, $35-$45 for a season of Game of Thrones or True Blood on HBO GO.
After all, this article doesn’t take into account that the cable industry is experiencing a MASSIVE loss of subscribers cutting the cord, and as people learn how to cheat the system by using their friends’ HBO GO passwords and downloading via torrent, how much does HBO stand to lose that way?
Not a lot of people will pay $35/$45 for a single season of a tv show. Toss in a DVD at the end, give me access to back seasons while during the current season… maybe…
I remember record executives saying similar as they sued Napster, saying online sales would never take over traditional media sales.
In other news, online music store sales have taken over physical media sales.
Yup! It may be true now that it doesn’t make sense, but it won’t be for long. And what about new business from people who don’t currently want to pay for cable but would pay for HBO a la carte – maybe even more than $10-12/mo? There’s a huge gulf between the $50-100 it costs me to get HBO via cable and $10 – would it make sense at $25? And would cable providers really be incentivized to completely stop offering HBO out of spite, if HBO started to offer a la carte in addition to cable? That’s shooting themselves in the foot. The break even point is coming soon and HBO will be well advised to be ahead of that curve.
It might make sense for consumers, and even make sense for HBO. But there’s simply no chance it will ever happen as long as HBO is owned by Time Warner. for them it’s a bigger-picture issue. As soon as they allow one crack in the a la carte wall, they stand to lose hundreds of millions, if not more.
HBO is not saying online distribution won’t take over traditional broadcasting. They’re saying the economics don’t work at this time. When they do, they’ll offer it. The Napster comparison is irrelevant because an album costs what? $250,000 to record? A single episode of Game of Thrones costs several million. HBO is free to dictate how you watch their content. If you don’t like their business model, don’t watch their shows. They don’t owe you anything, especially if you’re not paying for their stuff.
Spoken like a music industry executive…circa 2001.
I already have this system in place: it’s called Netflix. Sure I’m stuck with rassin frassin DVDs but either way, content’s the same.
One season of Game of Thrones = 5 DVDs. My return rate gives me about $1.50 per DVD, so I’m paying a grand total of $7.50 for the whole season, the equivalent of 3 months when originally aired, So that’s $2.50/month.
Pretty good price. So, as long as HBO refuses to give me a streaming service at the same price, I’ll stick with what I’ve cobbled together. Frankly, I’d be willing to pay more than that. $5/month for a premium cable channel seems fair, considering that they never seem to be showing more than one worthwhile series at any given time.
I’ve never subscribed to HBO and at this rate, I never will. I wonder if HBO has counted the cost of losing direct revenue from potential subscribers like me? Not to mention all the pirates out there.
Essential channels – AMC, HBO, ESPN. No reason to pay for anything on cable.
The above statement may actually just be the opinion of Theon Greenjoy.
I was bored the other day and started thinking about the dreams of a la carte cable. I said, self, let’s imagine that a la carte cable was real and the way it worked is that you have to pick the 50 channels you want, which ones would you pick? I couldn’t come close to 50.
ABC, CBS, NBC, Fox, CW, Bravo, F/X, MTV, HGTV, AMC, ESPN, ESPN2, ESPN3, Discovery, Natgeo, TNT, TBS, CNN, ABC Family, A&E, USA, Travel, E!, ESPNU, Spike…yeah, i guess I cap out at around 25 myself.
Incredibly out of touch.
I’ve just come to conclusion that any one who doesn’t pay for a full cable package (incl. all the premium cable channels), isn’t serious about wanting the best and most varied programming that the current best entertainment medium, television, has to offer.
Along those lines, if you happen to want to work and be successful in the TV industry, and you’re not paying for a full cable package, you might as well pack up your bags and move back to Iowa. Being well-versed in what every network airs is part of the process…deal with it, people.
Who says everyone here works in the TV biz, or wants to?
DH, I’m glad you can take yourself serious, but I sure can’t.
“But it indicated that it won’t change its business model by linking to a TechCrunch article that says “there’s no way that HBO could make up in online volume the number of subscribers it would lose from cable.””
So it’s better to continue to lose revenue to piracy and account sharing, then? Wow… I know the term is “Old Media,” but that’s some ludicrously outdated thinking. I can’t wait to see how the market looks in five years. I should save this article, just so I can laugh at it down the road.
The lack of vision here is what gets me. Last time I checked, there were 7 billion people on the planet. A big proportion of them have access to the internet, and more are joining every day. And everyone likes to be entertained.
HBO and the entertainment business is trapped in small-minded thinking. They’re failing to see the gigantic opportunities right under their noses.
And they’re failing to understand that the history of consumer adoption of technology has always pointed towards greater access and ease of use, people getting exactly what they want, when they want it, and value of digital media dropping towards (hopefully not to) zero. That process is inevitable, and the only way to survive that drop towards zero is to get your audience numbers up, up, up!
Moore’s Law is what will save them – the incremental cost of each new audience member will drop as the value of digital media drops. Figure out how to make that balance out, and you still have a viable business.
I think the number of cord cutters is exxagerated them and most of those who do are low end consumers of content. We watch a ton of television in my house and there is no way we could cut the cord without paying much more and/or getting a fraction of the shows.
Cord cutting is simply not a viable option for most people.
Yeah i would live ala carte tv. It would change entertainment forever.
However it is clear now too many incestuous relationships exist for anyone to believe any sort of real choice would become available in the next ten years.
Ten years? Who could have imagined in 1995 that in 2005 the majority of music sales would be online instead of in CD form?
Yeah. Ok. Read this article and now I’m going to go pirate it instead of paying for it. Your loss, HBO. Your loss.
Napster comparision is a bit rushed. Film industry is different from the music industry: not everybody wants to download movies and watch them on their computer. If that was the case, there’d be no movie theatres anymore. Piracy is an even bigger problem in film than it is in TV.
DH sounds like he (or she) works for the TV industry on some level. “The best and most varied programming” my butt. Cable and satellite companies overcharge for packages glutted with multiple channels of mediocrity. Ever since the writer’s strike and the glut of “reality” television, most networks have given up striving for excellence and settle for the lowest common denominator. If I could put together my own packages of the channels I watch, then that would be worth paying for. The only cord running into my house these days carries the internet, and between Netflix and Hulu I see everything I want to see.