Hacker News Reader

Comment by wpietri | Hacker News Reader

HBO made about $4 billion in 2011 from subscriber revenue. The company is circa 40 years old. If you are an executive at a company that size and age, one of your primary jobs is to not fuck anything up.

Currently the upside to directly delivery is small; there just aren't that many people who have the hardware, bandwidth, and inclination to buy shows online. Certainly nothing like the 28 million subscribers they currently have.

There is no serious incentive for them to be a pioneer in this. Amazon, Apple, and Netflix are doing a fine job of figuring out what a la carte TV show delivery will eventually mean. When the market is big enough to make it worth getting in a fight with the cable monopolies, I'm sure HBO will do it. But for now, they can let other people take the risk.

View on HN

Exactly, their business model is to drive Cable Channel subscription, which I gather is way more lucrative revenue stream than getting a slice of a bundled internet service like Netflix, or directly selling episodes at the going rate (already comparatively higher price) of iTunes.

Even their DVD sales of Game of Thrones occur until 1 month right before the 2nd tv season begins. All the more to goose interest in the show and channel subscription....

It's not an either/or proposition, HBO can allow streaming and still be friends with the cable companies. NBC is one of the big backers of Hulu and the cable companies still deal with NBC.

Do the cable companies deal with NBC? I thought they only dealt with local broadcast affiliates. But I confess I haven't had cable in a long time.

Regardless, premium content like HBO is different than broadcast television. The cable companies never had US exclusives to Saturday Night Live. But they do for Game of Thrones, and I doubt they'll give that up willingly. Remember: they're monopolists, and to a monopolist there's no such thing as fair competition.

Comcast owns NBC now. Of course, they're probably required to keep playing ball with Hulu for a while to appease congress and the FCC.

This. For all the hemming and hawing that is done about *AA's and digital delivery, it's got to make sense compared to their current budgets. Most astute people can see the ship leaving the harbor in terms of what the future looks like, but when your revenue is measured in billions, it's easier to just let things shake out and then see who wins than it is to put it on the line and potentially get burned betting the wrong way.

edit: I don't necessarily believe in this as a sound way of doing business, but I understand why they'd think this way.

And in the meantime, HBO Go gives them a great opportunity to learn how to build a great service, so that once it makes sense to fight with the cable companies, they already have a great, mature product.

> Certainly nothing like the 28 million subscribers they currently have.

Netflix alone had over 23 million streaming subscribers at the end of Q4. I'd say your instincts as to the market potential are quite underwhelming.

Sure, and that's a distribution network they've spent 14 years building. And they have way, way, way more content than HBO does. And those people are all on an easy-peasy all-you-can-eat plan; they are not buying individual shows. And HBO subscribers currently pay an average of something like $12 per month versus $8 for all of Netflix.

To me, that says that HBO would be idiots to fuck up their current cable relationships in hopes of building their own direct-distribution product. For now they can happily continue to sell the downloadable content to Amazon at the same time they release the DVDs.

Reply on news.ycombinator.com