It’s not quite the end of the year yet, but I’m ready to make a bold prediction for 2012: HBO is going to offer its service À la carte via the web.
Ok, maybe it won’t happen in 2012, but I think it’s going to happen a lot sooner than people realize.
If you’ve somehow missed all the advertisements for it, HBO has a free online service for subscribers called HBO Go where all of their current and passed shows can be viewed (and with current shows, new episodes are made available the day after they premier), as well as a large catalogue of movies – larger than what’s available on demand via cable.
The service is pretty incredible.
Despite not having HBO – I dropped cable TV in July – I’ve had free access to it, and I’ve used it to keep up to date with HBO’s shows, as well as begun re-watching The Wire. It’s pretty clear that HBO is plotting to sell HBO Go to cord cutters like me.
Since the service launched, HBO has been making some episodes of currently running shows available a week before they premier at the scheduled Sunday night broadcast time. HBO is obviously trying to encourage HBO subscribers to tryout the service.
Until recently, HBO Go was only available on computers, smart phones and tablets. But last month, the service was launched on Roku. That means you can watch HBO content on your TV in 720p – a bit of a step down from cable (1080i with surround sound), but on par with Netflix streaming on Roku (and similar devices). The goal is to get it up to 1080p with surround sound.
So to state the obvious, HBO can now be delivered to your TV without a cable box.
Cable companies clearly see the writing on the wall.
Not all cable providers allow their subscribers to have access to HBO Go (Time Warner just got on board). Accessing the service is conditional upon approval of the cable company you buy HBO from. And of the cable companies that allow subscribers to use HBO Go, fewer will allow them to access it via Roku, such as Comcast and Direct TV, which represent a combined 40 million subscribers.
I cannot blame these cable companies. The last thing they want is people realizing it is not only possible to watch HBO without a cable box, but it can be done on TVs with comparable quality.
We’re building to an epic showdown where cable companies will either threaten to drop HBO from their lineup if they go through with selling HBO Go to non-subscribers (which will be a bluff), or throttle the bandwidth of their internet subscribers who buy it (and depending on what happens with net neutrality laws, this could be perfectly legal). The bigger issue at play is that cable companies are facing extinction because they’ve failed to innovate.
Cable companies today are doing exactly what the music industry did in the late 1990s.
Instead of accepting that music sales would eventually move online where individuals tracks could be purchased instead of an entire album, labels spent years suing people who were listening to their music while Apple developed an online music store and hardware to listen to digital music purchases. The rest, as they say, is history.
For decades cable and satellite companies could legitimately resist providing channels through an À la carte pricing scheme because there was no other delivery method for TV content (except over the air). But it’s too late now for cable companies. Even if they went À la carte tomorrow, that would be too little too late. The future of TV distribution is over the internet. There is no future for cable boxes.
What cable companies should have been doing for the last five years – or at least Comcast given their size and resources – is become online aggregators for content like Netflix, Amazon and iTunes. They should have also built their own Roku type boxes. And because of their relationship with sports leagues, they could have positioned themselves to be the exclusive online providers for pro and college sports.
The lesson is, that to get ahead of the curve, sometimes you have to be blowup your own business model.
