Business - Written by Brendan Peat on Tuesday, January 22, 2008 11:06 - 4 Comments
HBO’s ‘free’ downloading service headed in the right direction
The other week I wrote about the lack of choice TV viewers are provided with and how it factors into their rationale for pirating shows. “Time shifting and TiVo lead net generation members to find little wrong with downloading their favorite TV show. Personally I love watching The Office, but the problem is that I am very rarely home at 9pm on Thursday night. I already pay for cable and have access to the show, I just prefer to watch the show at a time that is more convenient to me (U.S. viewers can watch it free online).”
HBO announced earlier this week that the company is now going to offer it’s programming ‘free’ online. The following excerpt from BusinessWeek outlines the new service “HBO describes HBO on Broadband as free. But to get the service, a cable subscriber will need to have already paid not only the $12 or so a month to get the pay channel, but also the $30 or $40 a month to get a cable operator’s broadband service.” Of course the service has some big conditions, but it’s refreshing to see that some content providers appear to be getting it, users want choice. To get access to the ‘free’ HBO on Broadband service you have to be an HBO customer. You know what, this makes sense. HBO has great programming and I believe that many users would be more willing to pay for the channel if they are able to have control over how the consume media (traditional TV, streaming, download, time shifting, etc…).
True HBO has inserted the sleazy stipulation that users must also subscribe to their broadband service to access the new technology, but at least they are trying. For the first movers in this case, especially a well established content provider such as HBO ‘strong armed bundling tactics’ may actually garner them market share while at the same time handicapping others who follow from copying their model (what are the odds a similar Showcase bundle would work now?). The model is far from perfect but at this point getting some innovation out of the archaic entertainment industry is better than nothing.
4 Comments
Vincent Clement
Brendan Peat
Great point Vincent,
That does make the deal extra dastardly, extending one hand in friendship while a knife is firmly grasped in the other.
Despite that I am still looking hard for the silver lining in this whole thing.
All I have is this: They did try to lock up Comcast to include them in the ‘approved broadband providers’ list and they did make an effort to change the traditional business model still gives them a passing grade.
Mind you it’s a mercy pass D-, but I am not ready to give up on the concept yet.
When you purchase media TV/Movies/Music you should be able to consume them as you please.
Vincent Clement
I completely agree that consumers should have more flexibility in consuming TV, movies and music.
I would prefer that every network offered their shows on-demand via digital cable and online. I would probably watch more TV than I do now.
It all comes down to control. Mainstream media is afraid that giving up some control means less profit. I suspect the reverse is true.
Brendan Peat
The one sticking point is that may come up in the future is that the big broadcasting companies don’t actually charge people for access to their channels. CBS, NBC, ABC and CTV, Global and CBC in Canada all broadcast their signal free to users.
Most people don’t realize that the money they pay to their cable providers only goes to specialty channels. Any channel that you can pick up with an antenna is supported by advertising not your monthly cable bill.
So while specialty channels such as HBO (that users specifically pay for) would still keep their revenue stream. It may be harder to convince the ad supported networks to move to a medium that allows users to cut out the commercials.
It will be interesting to see how it evolves, and we know from experience that if the entertainment industry doesn’t adapt their model to accommodate new technologies the public will move on with out them.
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Except that you over looked one thing: HBO is owned by Time Warner, the same Time Warner that will be introducing metered internet service.
So on one hand, they will be offering a free service – so long as you subscribe to the channel and so long as you subscribe to a cable ISP (which appears to be limited to Time Warner for the time being).
On the other hand, Time Warner will charge you for going over bandwidth cap. It’s a win-win for Time Warner.
Obviously, the bean counters came up with this scenario.