HBO is cementing its reputation as a trail-blazer with a new batch of hit shows and, more recently, a hugely popular mobile offering. But the company is determined to remain a traditionalist when it comes to its relation with tv distributors.
HBO Co-President Eric Kessler told a gathering of industry boffins this morning in New York that there is no chance his company will make shows like True Blood or The Wire available to digital non-subscribers. HBO currently has around 30 million customers, all of whom must buy its content as an upgrade from their cable or satellite package.
Kessler said that, despite the success of HBO GO (“It’s HBO Anywhere”), the company has no plans to offer the new mobile offering to a broad audience. HBO first unveiled GO as a browser-only service last year and then launched it as an app for phones and the iPad this spring. Kessler said 55 percent of GO downloads have occurred on the iPad (GO is not yet available on other tabloids) while phone downloads were about evenly split the iPhone and Android devices.
HBO’s decision to remain tightly wedded to the cable industry makes it something of an outlier in this age of aggregation. The rationale, according to Kessler, is that services like Netflix (NSDQ: NFLX) and Hulu are competitors and that HBO’s bread and butter is content not licensing.
The strategy makes sense but still seems like a risky one. The rising cost of basic cable means that would-be subscribers must shell out ever more money before they can even contemplate buying HBO in the first place. This means that HBO’s strategy remains based on persuading already strapped consumers to add more to their cable bill while also forgoing so-called ‘cord cutters’ altogether.
Kessler is undaunted, saying HBO regards cord cutting as a temporary phenomenon that will go away once the larger economy improves. He also says that HBO will flourish under its current model thanks to its star power (its latest coup is getting The Social Network‘s Aaron Sorkin to pen a series) and because its partnership with cable companies allow it to avoid transaction costs like billing.
It is hard to argue given that HBO has been dominant in its field for so long. Still, as a cord cutter who has seen a few episodes of HBO’s Game of Thrones and would pay to watch more on my iPad, the company’s decision is an incredibly frustrating one. I am not going to go out and buy a cable package simply so that I can pay even more to watch the show and, at the same time, I’m unable to buy
it the current season on Amazon (NSDQ: AMZN) or rent it in a video store. There are no doubt a large (and likely growing) pool of customers like me. It is hard to believe HBO will ignore us forever.
Kessler was speaking at “VideoSchmooze NYC”, an event hosted by VideoNuze editor Will Richmond.