Time Warner doesn’t want you to know you can get HBO without cable - Quartz. One of the biggest conundrums facing a prospective “cord-cutter”—an American seeking to abandon their agonizingly expensive cable TV subscription to consume content only via the internet—isn’t how to survive without 300+ mediocre channels. It’s how to continue accessing HBO. The premium cable channel may have a solution in store, but you wouldn’t know it from the latest spin by its parent company. The premium cable channel behind must-watch shows like Game of Thrones, Girls, Boardwalk Empire and earlier shows like The Sopranos has an internet streaming product, but it’s virtually impossible to access without a cable subscription, which many consumers are increasingly unwilling to pay for. This frustrates many, so much so that it inspired a high profile internet campaign last year—Take My Money HBO—in which devoted fans tried to get the channel to follow the path of Netflix and Hulu and begin selling subscriptions directly to them (a request the company politely denied).
How HBO Makes Money. To stay relevant to television viewers, cable channel operators have started spending millions of dollars to create hit shows and programming. Time Warner operates a handful of leading channels and states that Home Box Office, or HBO for short, is "the nation's most widely distributed multi-channel premium pay television service. " It also competes on an international scale and boasts 93 million worldwide subscribers, according to its owner. Expensive ContentThat is a pretty impressive figure, but creating the content is pretty expensive. HBO's hit shows in recent years have included "True Blood," "The Pacific," "Sex and the City," and "Entourage.
" A season of "True Blood" costs an estimated $50 million to $60 million, which works out to around $5 million per episode. Money from Subscriber FeesUsing a rough calculation using the subscriber figure provided by Time Warner, HBO could bring in as much as $1.4 billion in subscriber fees. SEE: Why Networks Love Reality TV. HBO. Assets and Subscriber Revenue Give ESPN an Edge in Rights Bidding. Game of Thrones: How HBO and Showtime make money despite low ratings. HBO Is Already Experimenting With New Business Models. By Alyssa Rosenberg on May 14, 2012 at 11:37 am "Why You Don’t Have Stand-Alone HBO Go—And Why You Should Give HBO More Credit" There’s been a lot of discussion over the past couple of days about why HBO hasn’t made its content more widely available to non-cable subscribers. While I understand individual consumers are frustrated, I think we need to reckon with the fact that this is not a problem of a single premium network.
It’s a limitation of an ecosystem that also happens to have produced the kind of environment where HBO can make the content that makes it so desirable. Erik Kain started the current wave of this, first blaming HBO for piracy, then, arguing that HBO should offer HBO GO as a standalone service and that the company would make more from those subscriptions than from its current arrangement from cable companies, and eventually backing off for some of the reasons I’ll articulate. *Taken a look at Netflix or Hulu’s original content recently? Rethinking HBO Go's Business Model — Disruptions.