HBO to Netflix: We’re taking our ball & going home

http://venturebeat.com/2012/01/05/time-to-torrent-more-boardwalk-empire

by timjahn • 15 years ago

81 87 15 years ago

motoford• 15 years ago

Are the traditional cable premium channels like HBO & Showtime even relevant anymore? I would hate to be them.

I'm sure many (most?) will disagree, but I see these services as on their way out. Quickly. They could have lived longer had they brought out more flexible subscription plans. For example, no way would I have a monthly subscription, but there have been many times I would have paid some fee for a shorter block just to catch a movie or event.

paulhauggis• 15 years ago

"Are the traditional cable premium channels like HBO & Showtime even relevant anymore? I would hate to be them."

Seeing as how their original content is widely torrented, yes.

wmf• 15 years ago

HBO and Showtime are my favorite channels; too bad I can't get them because I don't want cable.

jasonlotito• 15 years ago

Yes. Very much so. Between HBO and Showtime, that's pretty much why I subscribe to TV. Their original programming is top notch, and well done.

robryan• 15 years ago

I'd hate to be a cable intermediary a lot more, at least HBO and Showtime have a lot of original content to play with.

ctdonath• 15 years ago

They need to learn from Kodak. Once the public begins to transition en masse to another medium, it's very fast.

TV has a certain "lemming" following: people want particular content because other people want that content. When enough people expect the bulk of their content via Netflix (or wherever) the social pressure to stick to "cable" will evaporate.

Now if somebody could just replicate the "here we are now, entertain us" brain-dead delivery system that cable/OTA provides.

pyre2• 15 years ago

  > Once the public begins to transition en masse to
  > another medium, it's very fast.

HBO already has a system in place (HBO Go), but it seems like they are waiting for a tipping point to divorce their internet content streaming from the requirement of having a cable subscription. Probably once they feel that pissing off the cable companies is worth the revenue they will gain.

chollida1• 15 years ago

HBO and live sports are the only two reasons I subscribe to cable anymore.

I'd say HBO is one of the most relevant forces in TV these days.

pavel_lishin4• 15 years ago

It sounds like they're trying to roll their own streaming solution, instead of trying to rely on Netflix.

And hell, it might even work. Isn't this what we've been asking for? A la carte cable channel selection?

larrik3• 15 years ago

Trying to? HBO GO has been around for a while.

It's not great though.

ndvivedi• 15 years ago

What don't you like about it? Other than requiring a subscription to a cable provider i have found it to be pretty amazing.

ddw• 15 years ago

If I didn't have to pay for cable and the regular HBO rate, yes, it would be good.

pavel_lishin4• 15 years ago

Ah, I didn't realize you had to have a cable subscription for this. I thought it was just streaming.

herge• 15 years ago

"At that time, Kessler also said his company sees cable-cutting as no more than a temporary austerity measure that will cease as soon as the economy takes a turn for the better."

To steal a page from John Gruber, this sounds like one to keep for claim chowder.

timjahn2• 15 years ago

With stories like this, I always wonder: do the executives have kids? What are those kids watching? Do they own Rokus? What about their friends, classmates, roommates, etc.?

Do the executives really just keep the blinders on all the time?

smackfu6• 15 years ago

HBO has strong content, an amazing brand, and a mobile app. They can turn around tomorrow and sell a streaming service for $10 that will get tons of subscribers.

But right up until that point, they will say cable is great and will never go down.

Thinking this is "claim chowder" is just thinking too small and literally.

libraryatnight2• 15 years ago

This is what I was thinking. I almost wrote a rant about how it's unfortunate that HBO, a network that makes some pretty awesome shows, isn't getting with the times etc etc. Then, I thought I should probably just hold my tongue and watch what happens.

I suspect the scenario you describe is correct, they'll defend cable up until they launch their own service.

patrickod3• 15 years ago

One of, if not the main feature that I associate with Netflix is its large library of content. I pay the monthly fee as I can assume to a certain degree that the majority of the things I want to watch will be available. I'm sure I'm not alone in this.

Fragmenting the content like this over numerous streaming solutions each with their own charges and workings is, in my eyes, a huge step backwards for online content. I can't see users being happy to pay more parties for the same content on numerous services. This to me reeks of networks killing the golden goose.

timjahn2• 15 years ago

I agree with your point about fragmenting content, but not about Netflix. The only reason I still pay $8/month for Netflix is their amazing mass of children's programming.

I could do without the decade old movies.

patrickod3• 15 years ago

Funny because I care not for the children's programming but for the ability to watch the classics as well as more recent releases. A large library can cater to many different tastes.

smackfu6• 15 years ago

That's why the cable companies like Comcast want to take over. "Free" streaming with your existing subscription. It's already out there in their Xfinity app.

patrickod3• 15 years ago

I haven't paid for cable in my life and I don't plan on starting. The on-demand functionality that streaming services offer and their multiple-device support is way too useful to give up in place of cable services.

X-Istence2• 15 years ago

Xfinity costs extra money and I don't get nearly enough in return for it to be useful to me. Not only that, but content streamed over their Xfinity is still counted against my bandwidth cap with them so basically I am paying them extra money to kick me a little bit harder.

wdewind• 15 years ago

OR...

having one large company on the internet be the "distribution" company for a bunch of media creators sounds a lot like cable TV doesn't it? I think we actually DO want the media fragmented across multiple providers. We should look at it as a Good Thing that media creators distribute their own media, no matter how big they are.

chc• 15 years ago

Except HBO won't do this. If HBO wanted to charge some pittance for HBO Go, I'd pay it. Instead they want me to sign up for cable, which I don't want, so they don't get my money at all. (And I don't see how refusing to negotiate a DVD rental deal helps that goal at all.)

cma• 15 years ago

As long as there are no exclusivity agreements, there is no problem--the problem with cable, aatellite, et. al. are the barriers to entry, which don't exist in the streaming space. (The closest Netflix has is its device presence).

trafficlight• 15 years ago

And with internet-connected TVs, Bluray players, and devices like the Roku, I can just add a new source of content. No big deal.

AdamFernandez• 15 years ago

I think if there is enough demand for their content they can try to go it alone with their own streaming service. I suppose it is an experiment that has yet to play out for many content providers.

smackfu6• 15 years ago

Whenever a company like HBO cuts off direct DVD sales to rentals, the message is simply "we don't want to make life easier for you", which makes sense since NetFlix is a direct HBO Go competitor.

doty• 15 years ago

Interesting. It's easy to pattern match this against the old "media company wants control and doesn't get the modern world" chestnut.

On the other hand, try pattern matching this against the "band decides to put work directly on internet rather than going through a label" or "writer decides to self-publish rather than go through a publisher" story. Why wouldn't a direct-sales model work for them?

Admittedly, they aren't quite doing the direct-sales model, since they only grant access to HBO GO through some sort of premium TV subscription. But if they offered direct subscriptions to HBO GO...

untog• 15 years ago

But if they offered direct subscriptions to HBO GO...

Unfortunately, that's exactly what they won't do- they've stated as much themselves. The cable companies essentially promote HBO for free right now, so HBO is unwilling to rock the boat with them. Selling subscriptions online would most definitely rock the boat.

I don't know if I blame them or not. I don't think there is any doubt that this kind of online subscription is the future, but I'm not sure it would reach as many people as a premium cable subscription would right now, so they'd stand to lose a lot of money and subscribers. Of course, setting up HBO GO means that they have the system set up and ready to go whenever the market changes.

jonnathanson• 15 years ago

I think they can afford to be slightly ballsier than they're being. But not by much. And that matter of degrees is what makes the situation with "rocking the cable providers' boats" so fraught. Fact is, HBO is not in a power position against its cable providers. HBO doesn't drive cable subscriptions en masse the way sports packages do. HBO still -- for the time being, at least -- needs Comcast, Time Warner, et al., a lot more than they need HBO.

That said, I don't think there is a major cable provider out there right now who'd dare drop HBO from all of its offerings if push came to shove. And I think HBO is, in many ways, the perfect content brand for on-demand subscriptions or a la carte episode sales on digital ecosystems. Its content is top-notch, and the potential audience for that content is theoretically a large multiple of the current HBO subscriber base. The quality of a typical HBO scripted series is lightyears beyond that of almost any other network show, and consumers would eat it up.

I agree with you that HBO seems well-positioned for either world right now: the world in which it currently lives, or the world in which it could find itself a few years from now. HBO GO is a great app with what I imagine is a large install base. It seems relatively future-ready, if not wholly future-proof.

Nycto• 15 years ago

It sounds like HBO is ditching Netflix to do their own streaming. Bummer. While I wish Netflix had a larger selection, the bigger appeal to me is how many platforms they support. I can watch it from Windows, my Boxee Box, my Wii, my iPhone or my Kindle Fire (Linux support is sourly missing, though). If HBO strikes out on their own, there is no way they are going to have that kind of breadth.

What I really want is a streaming service that lets me choose what sources I subscribe to in an a la cart manner. If Netflix wants to survive losing these content providers I think that's the direction they should go in: become a platform. And if they don't, it's a great idea for a startup.

smackfu6• 15 years ago

To be crystal clear, HBO content has never been on Netflix streaming. This story is about HBO making it harder for Netflix to lend out the DVDs by not selling them to them at a discount.

smackfu6• 15 years ago

Relevant:

In December, Netflix CEO Reed Hastings told an investors conference that HBO's online viewing service, HBO GO, was "the competitor we fear the most."

r00fus• 15 years ago

As long as HBO GO still requires a cableTV subscription (and HBO subscription), Netflix has nothing to fear about.

I'm sure Amazon, Apple, Google and others are ready and willing to pay HBO for an option that bypasses the cable requirement, and at some point it may be lucrative enough for HBO.

On the other hand, Comcast probably has HBO over a barrel, given they also own the last-mile for millions of internet users as well.

matwood• 15 years ago

As long as HBO GO still requires a cableTV subscription (and HBO subscription), Netflix has nothing to fear about.

While this is true, I have to think HBO has already built a payment system and is literally a flip the switch away from charging customers directly for streaming. Netflixs CEO is future looking if nothing else, and I'm sure he's come to the same conclusion.

Jun8• 15 years ago

"...Eric Kessler stated to industry leaders that HBO shows would not ever be available to non-HBO subscribers on digital platforms"

This is idiotic on HBO's part.

Look, it's pretty simple: I want to watch "True Blood", which is currently in Season 5. Netflix doesn't even have S4 yet. I'm willing to pay good money, say $20 for a season, but am not so crazy as to pay $$ for crappy supreme-whatever package from Comcast. The reason is not that I hate Comcast (I do) but I'm not interested in other channels (sports etc.) in the package, i.e. I want HBO only.

flyt• 15 years ago

"Ford will only sell cars to people that own horses" would have been a great idea.

libraryatnight2• 15 years ago

This is the sort of thing that encourages piracy, too. It's not that I'm unwilling to pay for HBO programming, it's that I'm unwilling to pay for the things I do not want, or need, just to be able to pay HBO for their programming.

I just went to Amazon, though, to check the price of a Bored to Death DVD to add to my point (a show I enjoy, but I don't really want to own on DVD and would pay to stream) and it came up as available for streaming through Amazon Instant Video. Odd since that seems like a non-hbo subscriber being able to watch on a digital platform. I assume having Amazon Prime grants access to the show, too.

waterlesscloud• 15 years ago

They're available to non-HBO subscribers on digital platforms 30 minutes after they air.

HBO can get paid for it or not, it's their choice. Looks like they're making the stupid choice.

hesdeadjim• 15 years ago

The CEO of HBO is infuriating. I will never have a cable subscription ever again and it has nothing to do with the economy, yet I would love to be able to purchase HBO shows digitally. Game of Thrones? Still not even available on DVD, let alone iTunes, Amazon, or shit, even some crappy HBO run service. Have friends in the same situation who just gave up and pirated it.

Perfect picture of an out of touch media executive.

serge2k• 15 years ago

I pirated it, but I also preordered the blu rays yesterday. i am willingto pay, but i want the flexibility of streaming or disks.

stricken• 15 years ago

What country are you in? I'm able to purchase all 10 episodes of Game of Thrones on iTunes in Australia.

eridius• 15 years ago

In the US, Game of Thrones won't be available on iTunes until March 6.

ghshephard3• 15 years ago

Everyone I know who wanted to watch Game of thrones has torrented it. Many of them after checking iTunes first. DVDs are out for those who no longer have DVD Players (all the macbook Air types). Streaming is out for those who want to watch stuff remotely. Cable Format has to be the most useless delivery format I can conceive of - you have to: (A) Purchase Digital Cable, and then (B) Subscribe to HBO on top of that, and finally (C) Go through the hassle of tracking/converting all those shows into a watchable format.

For the first time in my life, I can say with almost complete assurance, that the reason the majority of the people I know are torrenting, is because the rights owner isn't willing to sell in format that they want to watch it in.

Don't call him out of Touch though - The reality, though, is that the CEO of HBO is a highly informed profit maximizing individual and the reason we don't get Game of Thrones on DVD/iTunes, is because of the huge revenue stream represented by the other 95% (99%?) of the population who is more than happy to Tivo GameOfThrones. He'll forego the 5% of us who won't purchase it on Cable, in order to make money on the other 95% The Reality is, that some percentage of that 5% would have Torrented it rather than paying the $50 for an iTunes season.

They know how much they can make through iTunes, DVD Sales, and, most importantly, their Cable Customers (Comcast, etc...).

And, if SOPA goes through, it will provide a platform for attacking the Torrents. First the entertainment industry will DNS blackhole "piratebay.org", then, when people avoiding that in numbers enough to matter, they will pass SOPA Part II, and start blackholing IP addresses. SOPA Part III will come out once people figure some way of connecting to dynamically assigned IP addresses.

It will be a legislative game of Cat-and-Mouse driven by the massive $$$ that the entertainment industry is paying the lobbyists.

absconditus• 15 years ago

What in the world do they stand to lose by offering Game of Thrones through iTunes or Amazon in a reasonable amount of time? iTunes is already selling it even though it will not actually be available until March. None of us who are waiting for it are going to subscribe to cable in the meantime.

tptacek• 15 years ago

Isn't the strong case against SOPA that it would strangle sites like Reddit in the crib, by creating a cloud of uncertainty and subjecting them to disruption without due process? That case seems straightforward.

The fact that Game of Thrones is available on BitTorrent though... that is itself a problem. HBO is within its rights to prevent its content from being published for free to anonymous Internet users.

danmaz74• 15 years ago

piratebay.org, btjunkie.org and other websites like those are already url-banned here in Italy. That didn't stop the downloads at all, afaik

DannoHung• 15 years ago

I'd buy an HBO subscription today if it didn't mean I had to have $60 of cable company shit on top of it.

gamble• 15 years ago

If HBO wasn't hopelessly compromised by their dependence on cable networks, the smart move would be for them to use their proprietary content as the lure for a full-fledged competitor to Netflix streaming, similar to the way that Valve used their own games to get people using Steam. I'd be willing to pay the $8/month I give Netflix just for access the HBO back-catalog, assuming it didn't require a cable TV subscription that I'm never going to pay for again.

AJ0072• 15 years ago

Curiously, Time Warner Cable customers do not have access to their streaming service HBO Go. I have a feeling they might be working on a little trick to pull the carpet out from underneath their competitors.

robterrell2• 15 years ago

HBO and TWC patched up their differences on Dec 16 and announced that TWC customers would soon be able to use the HBO Go app.

crikli2• 15 years ago

Here's what I do when I want to watch a show:

1) Check out Netflix Instant.

2) Hit up Amazon VOD.

3) Check out iTunes

IFF those fail, then I go to the bay.

I prefer to use legitimate services to get content. But I'm not moving away from my keyboard to do it, and I'm not paying for HBO/Showtime/etc just for the one or two shows I want to watch.

franckbyron• 15 years ago

You should check out hulu first. It has the biggest selection for tv shows

kbutler• 15 years ago

Hulu has horribly obnoxious ads - repeated multiple times per episode of the show. Voting "not relevant" on an ad doesn't prevent it from appearing. There was an ad my wife found quite disturbing (about exorcism), and it played almost every ad segment. I had to mute and tab away.

And this is on a free trial of the Hulu Plus paid subscription service.

I just can't see paying a subscription fee for that user experience. In contrast, with Netflix, every time the program hits one of the advertisement breaks, you get the little psychological reward: "Hurray! No ads!"

smiler• 15 years ago

What you really mean is - you are willing to infringe copyright law, deny a lot of creative technical people and performers income and reduce funding for future shows.

You describe yourself as a software entrepeneur - I'm assuming you want to get paid for that in some way shape or form - how would you feel if people stole / infringed what you developed and denied you revenue?

I just do not get the prevailing attitude amongst a lot of people here on HN.

crikli2• 15 years ago

"how would you feel if people stole / infringed what you developed and denied you revenue"

Say I'm the lead engineer for Angry Birds.

But instead of releasing it for iOS, Android, and Chrome, Roxio built a shitty little handheld device that cost more than an iPhone but only played the handful of games they'd created.

Apple, Google, and even HP approached them about building versions of the game for their platform, but Roxio told them to eff off. They weren't going to give up a percentage of the potential revenue.

Then the community, in love with the game, cracked the sorry little handheld and ported the game to iOS/Android/webOS. Sales of the sorry little device plummet.

So how would I "feel"? I'd feel like lynching the PHBs that refused to concede a minority percentage of a massive revenue stream in favor of a 100% share of a tiny/no-existent one. I'd think they were arrogant fools for trying to maintain a white-knuckled grasp on distribution when that clearly belonged to Apple and Google, and I would curse their greed.

kunle• 15 years ago

I love HBO, but this is really dumb. they have to understand that the fact that people have to pay $60 bucks for the privilege to pay $15 for HBO is going to shaft them in the long run. They've cast their lot with the cable co's, which is fine, I respect you taking a stand, but it will be a full business cycle before people stop cutting the cord, and by then between Netflix, Hulu, iTunes, and whoever else arrives, there will be alternatives. . .

ifearthenight• 15 years ago

We are only going backwards. I've spent hours (x2 after having to re-do with de-interlace) ripping my HBO boxsets only to have to spend more time hunting down SRT files. Give me direct downloads already.

matthiasb• 15 years ago

I just gave a try to their HBO GO Android App. I thought I could pay a subsccription directly to HBO but no... you need to have a cable subscription to use this app. Nevermind!!!!

wycats• 15 years ago

All the people talking about whether HBO wants to "piss off the cable companies": you do know that HBO is owned by Time Warner, a cable company, right?

robterrell2• 15 years ago

Actually, Time Warner Cable is an independent company. It was spun out of the Time Warner mothership a couple of years ago.

mml• 15 years ago

I have some small hope someone will just buy HBO and put us out of their misery.

ansy• 15 years ago

HBO was created in 1972 and was wholly incorporated into Time-Life in 1973. Time-Life is now Time Warner [1], i.e. one of the world's largest media conglomerates.

I would be surprised if Time Warner put HBO up for sale any time soon if ever.

[1] http://en.wikipedia.org/wiki/HBO#Development_and_launch

ck2• 15 years ago

Netflix is going to suffer death by 1000 cuts.

The problem with making money off streaming is it's easy to overcome all the technical problems of streaming these days - all they are doing is using Amazon's CDN.

So the content owners can just DIY when they want to squeeze every penny of profit out of it.

HBO to Netflix: We’re taking our ball & going home

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