HBO Later seems a better fit3/25/2015
Among the all-time colossal missteps in business, the biggest might be Coca Cola passing on the opportunity to buy Pepsi in the early 20th century. Sometimes the fate of one organization can be written in its failure to identify the true potential of the competition. An example would be Blockbuster failing to recognize the prospective future of Netflix in the early 2000s. I fear once again a company is failing to see the true power of Netflix in regards to its success or failure. That miscalculating company is HBO.
When Netflix’s streaming service took off in 2008, the broadcast and entertainment giants didn’t think much of it. Sure, it seemed like an intriguing business model, but the majority of Americans consumed their content via cable subscriptions. Why would they want to pay extra to stream piece meal shows? Fast forward to 2015 and Netflix streaming is the dominant content delivery model in entertainment. Sure, cable still has more subscribers and makes more money, but not for long.
In the last two years, the average amount of time viewers watched live TV in America dropped for the first time since television was invented. At the same time, Cable ratings have dipped 9 percent overall, and Netflix subscriptions have risen 40 percent. It’s clear to see that American consumers are moving to web delivery for entertainment consumption, and producers are begrudgingly following them.
Since 2008, the online media marketplace has become extremely crowded. Besides Netflix there’s Hulu, Amazon, Crackle, Yahoo, FXX, Dish’s SlingTV, CBS All Access, and, coming in April, HBO Now. That is a ton of separate services, and with most coming in at $10 per month or more, subscribing to each individually is a non-starter.
So what is HBO thinking? When HBO Now makes its streaming debut with the season five kickoff of “Game of Thrones,” it will cost $15 per month and only be available via Apple TV. That’s right, after years of people screaming for HBO to take its streaming money, HBO Now will only be available to those who own the third-most popular streaming media device. Exclusivity deals are not unheard of in tech. The Apple iPhone was only available on AT&T for years. The problem is the Apple-AT&T exclusivity deal forced AT&T’s competitors to sell iPhone knockoffs, and one of those knockoffs blossomed into a legitimate iPhone competitor, Google’s Android device.
The streaming market is far from solidified, but it’s most certainly close. There’s no doubt HBO Now will one day be open to all streaming devices, be it Roku, Chromecast, tablets or web-enabled set-top boxes. But restricting access to its content only further devalues the HBO brand. In the time it has taken HBO to get its streaming act together, not only has Netflix become a worthy competitor, but Amazon has entered the original content arena and has shaken the streaming world with award-winning material such as “Transparent” and “The Man in the High Castle.” By the time HBO invites all comers to HBO Now, it could find itself stuck with the streaming bronze medal.
So the question remains: Should you drop $70 on an Apple TV and subscribe to HBO Now? Absolutely not. The Apple-HBO exclusive deal is almost assuredly a one-year contract, and since the market is flush with streaming services, it will likely force HBO Now down $15 per month. Being new to the streaming world, I imagine HBO is using 2015 to strengthen its service before going full steam next year. So unless you are dying to watch “Game of Thrones,” hold onto your cash and wait for 2016. CV
Patrick Boberg is a central Iowa creative media specialist. Follow him on Twitter @PatBoBomb.