Peter Kafka

Recent Posts by Peter Kafka

HBO Explains Why It’s Not Going A La Carte Anytime Soon

HBO Eric Kessler Dive Into MediaBuy HBO without paying for cable TV? To a bunch of you, that sounds very exciting. But it’s not happening anytime soon.

On Wednesday, HBO CEO Richard Plepler floated the notion of letting broadband providers — the same people who sell you cable TV — sell HBO as a standalone add-on to your Internet bill.

It’s not the first time the HBO guys have talked about how that might work. But the pay TV company isn’t actually talking to the cable/broadband guys about doing that, according to people at HBO and at its parent company Time Warner.

So, could it happen one day? Sure, I guess. But not for a long time, because right now the current system — where HBO (and Showtime) are only available to pay TV customers who also buy a lot of other TV channels — works well for the guys who own the shows, and the guys who own the pipes.

But even if we do get to a world where HBO lets you buy HBO without paying for other cable networks, it’s important to note that it’s still not talking about a direct-to-consumer, Netflix-style proposition. Instead, it wants the pipe guys to handle all of the retailing, including the marketing that Time Warner Cable is doing for HBO right now (and was doing for Showtime a few months ago):

If you want a longer explanation of why HBO likes the wholesale/retail set up, watch this interview with HBO COO Eric Kessler from our D: Dive Into Media conference last month. He goes into extensive detail about HBO’s rationale for the status quo, starting around the four-minute mark.

Note that, like Plepler, he leaves the door open for a broadband-only option one day — but argues that the market is “too small” to contemplate breaking up the bundle today. (And if you keep watching, you’ll see why he thinks Netflix-style “binge viewing” is overstated).

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik