People are perpetually seeking the sure sign that cord-cutting is so rampant it threatens the entire cable ecosystem — and that movement create a huge advantage for online video. I don’t see that happening. I mean, wish it would. Probably won’t.
But here’s a hopeful sign. According to Bloomberg, Time Warner is thinking about expanding HBO access to broadband customers who don’t subscribe to a full-blown cable package. HBO already did that with an experimental package offered by Comcast for $49 a month that gives consumers Internet access and HBO Go (that’s HBO’s Internet app) and local stations, and perhaps a few others, via cable.
On the downside, no ESPN, no DVR. And the Comcast deal was only available to people who didn’t have any cable service, perfect for young users setting up their first households.
That amounts to something like cord-loosening maybe, but whatever it represents, Bloomberg says Time Warner wants to expand it to other cable operators.
Clearly, HBO Go is popular enough that people scam to get it, which, of course is not so unusual, since forever, HBO has been pirated
by millions of users. But HBO also would like to keep its status in the pay biz. Netflix now has 50 million subs, and that's more than HBO in the U.S., but HBO leads by a wide margin worldwide. It's
not the kind of business where a smart operator rests on its laurels.
So obviously, HBO wants to get itself out to millions of would-be subscribers who don’t get it now because it’s usually only offered in fatter, more expensive packages that, increasingly, people just don’t care about or find contemptuously ignorant. So sorry, “Duck Dynasty.” If the camo fits, dude…
Bloomberg says that in other countries. HBO has marketed HBO Go without requiring subscribers to also buy the big-screen version, and that in Norway, Sweden, Finland and Denmark, the online HBO Go added 380,000 subscribers. In those places, HBO’s traditional pay service subs also went up. That’s roughly the equivalent to what content makers in the U.S. find with commercial TV offered on Hulu or elsewhere. It usually becomes a megaphone for the program, not a siphon.
Bloomberg suggests that TimeWarner recognizes the value of HBO—and the popularity some of its programs like “Game of Thrones” have with younger viewers—and that is why it so confidently rejected a $75 per share offer from Rupert Murdoch’s 21st Century Fox. More likely, Time Warner can expect a much larger offer, and a much nastier battle. Rupert doesn’t lose that often; he’s kind of the Scrooge story in reverse.