Two years ago, HBO introduced HBO GO, giving fans a way to access all of their favorite programming online, on tablets and mobile devices, and increasingly on connected TV platforms. For those of us who have had a chance to use it, HBO GO is nothing short of a revelation, as viewers can watch pretty much every episode of every HBO original series ever made, as well as a pretty good selection of new release movies.
The problem is that access to the services is limited to those who have HBO as part of their pay TV subscription: There’s currently no way to purchase the HBO GO component without spending upwards of $100 on cable or satellite. That’s led many to argue that HBO is leaving money on the table, by not trying to appeal to some of the cord cutter set. Worse, lack of access is driving some of its biggest fans to piracy, with Game of Thrones far and away the most pirated TV show this season.
But how much would people actually pay for HBO GO, if it were an option? Earlier this evening, web designer Jake Caputo tried to find out, by creating a website called takemymoneyhbo.com. The site implored users to tell it just how much they would pay for a standalone subscription to HBO GO, tweeting out whatever dollar value you said that you’d pay.
(For what it’s worth, I said that I’d pay $19.95 a month for a standalone subscription, even though I currently borrow access on my family’s cable account.)
Caputo’s site received more than 12,000 visits in just the first two hours, and it set off a string of tweets declaring just how much users would pay for a standalone HBO GO subscription. But there was just one problem — while Caputo’s site was built to attract the attention of HBO execs watching Twitter, he wasn’t actually capturing any of the data associated with what people said they’d pay.
Using the Twitter API, his script grabbed the most recent 1,500 tweets that mentioned the #takemymoneyhbo hashtag. It ignored retweets, and grabbed the dollar amount given. Any tweets that said they’d pay more than $50 were also ignored, since some were obviously intentionally high to skew the results.
What’d he find? The script was run twice, fifteen minutes apart, and the results were remarkably similar:
- Wednesday 5:10AM GMT/UTC +0:00 – $12.06, from 1063 data points.
- Wednesday 5:24AM GMT/UTC +0:00 – $12.30, from 1071 data points.
The average person would pay $12 a month, or about $145 a year, for online-only access to HBO content. But is that something HBO would be interested in? And is it really leaving money on the table?
HBO currently has about 29 million subscribers, and reportedly receives around $7 or $8 per subscriber per month. So HBO could, theoretically, get more per subscriber than it’s currently making. But that doesn’t include the cost of infrastructure needed to support delivery of all those streams, including all the CDN delivery and other costs that would come with rolling out a broader online-only service.
More importantly, it wouldn’t include the cost of sales, marketing, and support — and this is where HBO would really get screwed. Going direct to online customers by pitching HBO GO over-the-top would mean losing the support of its cable, satellite, and IPTV distributors. And since the Comcasts and the Time Warner Cables of the world are the top marketing channel for premium networks like HBO, it would be nearly impossible for HBO to make up for the loss of the cable provider’s marketing team or promotions.
Think about it: Every time someone signs up for cable or satellite service, one of the inevitable perks is a free six- or 12-month subscription to HBO. And those free subscriptions are rarely, if ever, cancelled once the trial period ends.
What would happen if HBO no longer had the pay TV industry’s marketing team propping it up all the time? The results would be disastrous, and there’s no way that HBO could make up in online volume the number of subscribers it would lose from cable. Which is why, even though some users would actually pay more for access to HBO GO without all the other cable channels, you won’t see it show up as a standalone service anytime soon.