Warning: there are some minor Game of Thrones spoilers in here, but come on, you should have seen it by now–it’s very easy to pirate!
Apple TV got HBO GO and Watch ESPN and some other content yesterday. Cool. Am I supposed to care?
This is a minor product update. Sure, it’s great for Apple TV users to get the additional content. But the real story to me is the absurdity that you still need to have cable to (legally) watch HBO.
All spring, I gathered around a TV with a bunch of friends and we’d watch the smash-hit Game of Thrones, naturally, through a friends’ parents’ HBO GO account on a laptop connected to the TV.
Many of us pay for our own Hulu+, Netflix, Spotify, and other accounts, or at least share them with a sibling. But none of us are willing to pay absurd rates for cable, and thus we can’t have HBO GO.
It’s asinine that the technology for producing quality content is so incredible (Blackwater Bay, anyone?) and yet we still have to have decades-old technology to access it.
There is clearly a market for a standalone HBO GO app. Netflix began offering online video streaming in 2007. Hulu started up in 2009. In 2010, HBO Go launched. Now, halfway through 2013, I’m supposed to get excited that there *might* be a broadband-only HBO Go in five years?
Pirates of the Iron Islands
HBO does a pretty good job right now–their content is top-notch and the HBO GO interface is great. HBO does a great job of being very lax about multiple sign-ins, to the point that it’s a running joke with many of my friends of “whose account are you using” and if you even know that person.
And yet, you still need a cable subscription for any of HBO’s content. And good luck if you’re not in the U.S.
I know, HBO isn’t worried about its record piracy right now; they claim it helps the show’s record ratings (more hype and awareness). And yes, the company has said on multiple occasions that it won’t do a standalone version soon.
This is short-sighted. A massive group of people–from the young, more-Internet savvy and more mobile demographic to, you know, every person not living in America who wants to watch the Starks and Lannisters–are growing accustomed to accessing HBO’s content without paying for it. This is not a new phenomenon, but it is a problem that will grow every year.
HBO receives marketing and sales support (think of those free trials of HBO you get when you sign up for cable), and other major financial incentives from the cable companies.
But tying everything to these old set-top boxes isn’t a winning long-term strategy for anyone.
The Iron Throne
Content has been and will be an enormous treasure to fight over. Right now, the Houses Comcast, Time Warner Cable (which hasn’t been affiliated with Time Warner since 2009), Cox, Verizon, and AT&T rule the Seven Kingdoms, and renting cable from them is about as pleasant as being Walder Frey’s wedding guest.
Their customers resent them and actively seek a way out. By keeping premium content like HBO tethered to cable subscriptions, these cable companies are protecting their present and very near future. This is exactly how big companies and mature industries get disrupted.
Isn’t the whole point of a good business strategy to put yourself in a better position for the future? The cable companies, like mad kings, seem to be trying to squeeze every last dollar out of their customers before their reign ends.
DirecTV is a great example of a network that’s actually embracing the 21st century. Their NFL Sunday Ticket, featuring every game and other features like showing every touchdown of the weekend, is extremely popular and has no doubt won them many customers away from the cable companies. Instead of trying to hide this gem in a walled garden, DirecTV offers a web version. This is the way forward.
Monsters & Kings
In Game of Thrones, for those of you who’ve managed to make it through this entire post without ever seeing an episode, the phrase Valar Morghulis means “all men must die.” We aren’t sure if the crazed author George R. Martin is going to literally kill every male character, or if a King or Queen will be able to seize the throne long enough to outlast the series.
The cable companies can figure this whole Internet thing out, and quickly, or they will die. It will be a long, slow, annoying death, or pivot out of the content space, but eventually, they’ll be gone.
Most of these cable companies are also Internet providers. They have two products: television and Internet; more users want Internet than television, and many would like premium content at the right price, via either platform. The cable companies insist on using premium content to try to prop up cable sales, rather than just switching the premium content to their more popular product, or making it available on both.
I’ve yet to hear a good rationale for why this can’t happen. Because calculator sales will hurt abacus sales?
If you have a choice between $50 for cable, $15 more for HBO, and $80 for Internet ($145) — versus — $122 for faster internet (for video streaming), $15 for HBO, and $8 for Hulu+ or Netflix ($145), which are you going to take? Probably the one with faster Internet.
That’s where the cable companies can survive, and even thrive. But they have to be more flexible and see their premium content (all of their content, really) the way their users do.
In the most recent Thrones’ season finale, Tyrion Lannister ominously notes, “Monsters are dangerous and, just now, kings are dying like flies.”
The cable companies are kings right now. But their kingdoms are ripe for the taking. Netflix and Amazon are producing exclusive content to rival HBO and the old guard of Starz and Cinemax. Apple has long been interested in a TV project, the shape and scope (beyond Apple TV) of which is unclear.
The clock is ticking for the cable companies and HBO. Kings are dying like flies. And winter is coming.