The Standalone Streaming Service HBO Didn't Want To Offer Now Has 5 Million Users

from the innovation-trumps-math dept

You might recall that just a few years ago, HBO had to be dragged kicking and screaming into the modern era. For years the company refused to offer a standalone streaming TV service, worried that it would jeopardize the company’s cozy promotional relationship with existing cable providers (who often all but give away the channel in promotions). As recently as 2013 Time Warner CEO Jeff Bewkes was claiming that such an offering would make “no economic sense.”

Why? Bewkes was worried that offering a standalone option would upset cable partners. At the time, those partners were already offering an HBO streaming app named HBO Go, but only if you signed up for traditional TV. This was art of the industry’s walled garden “TV Everywhere” initiative, a misguided attempt at stopping cord cutters by only giving them innovative streaming services — if they signed up for bloated, traditional television bundles. Bewkes was clearly worried at the time that being too damn innovative would upset industry executives and skew the company’s balance sheets:

“And we would do it if we thought it was in our economic best interest. At this point we don?t think it makes sense. We don?t think the target market is sufficiently large to be attractive at this point. So what we?re doing, and we think this is working pretty well ? we?re working with the [pay TV operators] to increase the penetration of HBO Go in a mutually beneficial way.”

At the time we noted how HBO was letting fear trump innovation. The company was focusing so much on avoiding upsetting cable operators and worrying over the initial impact on the traditional cable TV cash cow, that it forgot that innovation often trumps the math. In reality, the math Bewkes was concerned about were performance and metrics built on a different, changing market that was on the way out. This kind of hesitation was initially great news for Netflix, whose CEO saw all of this coming long before HBO executives did:

“The goal,” says Hastings, “is to become HBO faster than HBO can become us.”

All the while, HBO and Time Warner’s timidity and failure to listen to consumers resulted in many of its shows breaking piracy records. And while HBO couldn’t be bothered to offer a legitimate standalone streaming alternative to piracy, it did spend a lot of time and money trying to derail these efforts, including “poisoning” seeded copies of HBO programs on BitTorrent and sending out oodles of nastygrams to ISPs. Other HBO executives, meanwhile, seemed to share the cable industry mindset that this whole cord cutting thing was just a temporary phenomenon that would blow over.

HBO finally did buckle to offering a standalone streaming service (dubbed HBO Now) in 2014. Just a few years later and the service has just breached 5 million subscribers. And oh, the numbers HBO was so worried about are looking solid too, with HBO Now generating $19 million in revenues for the two months it aired of Game of Thrones Season 7. In this case it all worked out well for HBO, but the company could have enjoyed a much healthier head start if it company executives hadn’t let fear trump natural evolution.

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Companies: hbo

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Comments on “The Standalone Streaming Service HBO Didn't Want To Offer Now Has 5 Million Users”

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31 Comments
Anonymous Coward says:

So in 2013 HBO states it's not quite ready to start what did in 2014, and now YOU are taking credit for prompting it to good idea?

Techdirt, struggling to hold onto a couple dozen fanboys, yet again jeering at multi-billion HBO. Sheesh.


Two comments after hour and half.

Since I’m called by Techdirt on front page this week a "loopier critic", and much worse in comments, and my comments are "hidden" on this alleged Free Speech site sheerly to disadvantage my viewpoint, I did a reality check and searched for FACTS on its "accounts":

Techdirt has long resorted to astro-turfing. No other conclusion can be drawn from four named accounts having SIX or more year GAPS:

dickeyrat: 3 comments TOTAL in TEN years! Aug 17th, 2017, Jun 23rd, 2011, and Jul 10th, 2010!!!
https://www.techdirt.com/user/dickeyrat

https://www.techdirt.com/user/andrewlduane On May 1st, 2017

https://www.techdirt.com/user/slowgreenturtle Dec 15th, 2016

Advocate (changed to Keisar Betancourt and back!) 5 Sep 2013 from 18 Aug 2007
https://www.techdirt.com/comments.php?start=60&u=advocate

Now have a list with MANY 3,4,5 year gaps, and there’s often an inexplicable 18-month gap after first few comments. And while I can’t prove that my exposing zombies here is why are so few "accounts" commenting now, it seems likely. Not bad for a "loopier critic", eh?

My hope is that a larger site finds this and exposes Techdirt as the laughingstock it is.

PaulT (profile) says:

Re: So in 2013 HBO states it's not quite ready to start what did in 2014, and now YOU are taking credit for prompting it to good idea?

“Techdirt, struggling to hold onto a couple dozen fanboys”

It’s strange that you’re so obsessed with such a site, since by your own claims nobody will read the words you write anyway. Why would you not put your effort into something that people will at least read? Are you that pathetic or just a terrible liar?

“jeering at multi-billion HBO”

I recall you regularly jeering at companies worth much more than they are.

Besides which, the focus of this story is: HBO spent years claiming that they didn’t need to offer a standalone service, TD said they did. HBO refused until they had to offer it, now it’s working and making lots of money for them despite HBO claiming it would not.

Why should TD not say “see, we were right”? TD clearly were advising the company better than their own management at some point.

“Two comments after hour and half.”

So? There’s little to say here that hasn’t already been said, and the contrarian trolls who were posting on previous stories saying that HBO didn’t need to offer these services are quiet for obvious reasons.

“Techdirt has long resorted to astro-turfing.”

Then why are you so obsessed with posting here? Again, by your own standard nobody’s reading what you say, but you put so much effort into ranting and raving like a lunatic here.

Thad (user link) says:

Re: Re: Re:2 So in 2013 HBO states of whatever, and this is my United States of Whatever, and this is my United States of Whatever

AND he gets really mad when people can’t tell him apart from the other anonymous cranks who rant about bullshit, don’t know how quotation marks work, and think the “Subject” field says “Please type your manifesto here.”

The Wanderer (profile) says:

Re: Re: Re:3 So in 2013 HBO states of whatever, and this is my United States of Whatever, and this is my United States of Whatever

Myself, I wonder why apparently none of the people who reply to this guy ever delete the lengthy, rant-y Subject: line, to avoid having people be spammed with it even when the original comment gets hidden.

(This deep in a reply thread, it wouldn’t help, since the damage has already been done.)

I can only guess it has something to do with the non-threaded comments view, but do enough people really use that for it to be a serious consideration? It seems like it would be difficult-to-impossible to follow the discussion properly without threading, regardless.

PaulT (profile) says:

Re: Re: Re:4 So in 2013 HBO states of whatever, and this is my United States of Whatever, and this is my United States of Whatever

“I wonder why apparently none of the people who reply to this guy ever delete the lengthy, rant-y Subject: line”

Personally, I find it annoying when people do edit the subject line, as it makes it difficult to work out which part of the conversation is being replied to in the follow-up emails. I’d rather not have to click to check whether people are making serious comments or just mocking the sanity challenged.

“I can only guess it has something to do with the non-threaded comments view”

Again, it’s to do with reading the follow-up emails when I’m not on the site. My apologies if this is annoying, I tune out the things anyway so it’s never occurred to me that some will find it annoying, especially if they’re just reading the threaded view and often likely skipping past that particular thread.

The Wanderer (profile) says:

Re: Re: Re:5 So in 2013 HBO states of whatever, and this is my United States of Whatever, and this is my United States of Whatever

I don’t use E-mail notifications for/from Techdirt, so that would explain why the possibility of that as a factor didn’t occur to me.

Is that really a particularly useful metric, given the number of comment threads which exist with no Subject at all?

I mean, it’s true that this guy is at least nice enough to provide the characteristic Subject line as an indication that it’s him commenting, so the absence of such would usually be enough to indicate that it’s not a reply in one of his threads.

I’m just not sure that being able to filter out his threads in notifications, alone, is enough of a positive to outweigh the negative of having part of the attacking message which people decided to hide remain visible in every single reply.

PaulT (profile) says:

Re: Re: Re:6 So in 2013 HBO states of whatever, and this is my United States of Whatever, and this is my United States of Whatever

“Is that really a particularly useful metric, given the number of comment threads which exist with no Subject at all?”

It can be, depending on the popularity of the thread. I usually comment during downtime at work, live in the CET timezone, and normally have better things to do in the evening. So when I return to a discussion it’s not unusual for me to have 10-20+ emails waiting for me. A quick scroll through the emails will normally give me an idea of whether the discussion has developed anywhere it would be useful for me to come back to it, changing subject lines will make it a bit harder for me to follow offsite.

That’s just about taste though, I think. I prefer the email route as it not only means I get to scroll through responses a bit easier, it means I get notified if someone replies to me in a thread days or weeks later (as sometimes happens) when I wouldn’t necessarily go into the thread otherwise. I can see why others would just prefer to dive back in when the thread is fresh and avoid seeing some people entirely.

The point about hiding messages is also something that’s not at the forefront of my mind – for me, I just ignore them, and it’s normally pretty easy to scroll past the thread where the silly subject is visible. But, again, apologies of this annoys you as I do sometimes find it entertaining to prod at this fool.

The Wanderer (profile) says:

Re: Re: Re:7 So in 2013 HBO states of whatever, and this is my United States of Whatever, and this is my United States of Whatever

Oh, I don’t mind people prodding at him. It’s just the continual repetition and expansion-of-the-exposure of the trolling Subject line that annoys me.

As you say, though, tastes differ – and it’s hardly like you’re the only “offender” (if that word even applies) in this regard, so even if I convinced you to inconvenience yourself by changing the behavior, that wouldn’t stop anyone else from perpetuating it.

Thad (user link) says:

Re: Re: Re:4 So in 2013 HBO states of whatever, and this is my United States of Whatever, and this is my United States of Whatever

Myself, I wonder why apparently none of the people who reply to this guy ever delete the lengthy, rant-y Subject: line, to avoid having people be spammed with it even when the original comment gets hidden.

I prefer my method of keeping the first few words and changing the rest to song lyrics.

Anonymous Coward says:

Re: Re: Re: So in 2013 HBO states it's not quite ready to start what did in 2014, and now YOU are taking credit for prompting it to good idea?

It gets better. out_of_the_blue put himself on an exodus after late 2013 when Prenda Law was really getting the shit end of the stick Otis Wright was ramming into their ass.

Then he returned in early 2015, claiming he had detoxed from the site, but came back anyway. And he’s touting it like it’s a success on his part to come back to a site he absolutely loathes.

Wendy Cockcroft (user link) says:

Re: Re: Re:2 So in 2013 HBO states it's not quite ready to start what did in 2014, and now YOU are taking credit for prompting it to good idea?

It’s scraptivism, AC. The idea is to reach Mike’s audience since he knows he’ll never reach Mike.

It’d actually work if he was courteous and made coherent arguments but all he does is rant and wave his tinfoil hat about. Even if I had any sympathy with his arguments, such as they are, he’s lost me at “Hello” by his pompous, whiny attitude.

Anonymous Coward says:

I guarantee there were people who were pro-streaming at HBO long before this, who said the time to move forward was back then, and they were poo-pooed in meetings and emails, told to stop rocking the boat, told it was too complicated and expensive and risky. And now those visionaries are gone, and all the managers who shot them down have taken the credit for getting this done (and honestly believe it was their idea all along), and they have been promoted and are now patting themselves on the back for a job well done.

ECA (profile) says:

“it did spend a lot of time and money trying to derail these efforts, including “poisoning” seeded copies of HBO programs on BitTorrent”

FOR all the money spent on Lawyers and Court costs..
Innovation is the SAME as old style SALES..
SHOTGUN many things and SEE WHAT WORKS..Those that dont work get CUT.

Anyone here that has watched/seen/had kids TRYING to watch the cartoon sites KNOWS ITS F’ING STUPID…Its changed over and over, day to day, THEY WANT to much info on your kid, ADVERT ALL OVER HELL…SPLIT THE SITE into 2-4 SEPARATE SITES…then the Toons they watch are SOLD to another company and SITE..

Then HBO is willing to CHARGE $??($10??) per month for WHAT?? thats MORE then what you pay the cable corp..

DONT LOOK AT HULU..which started out FREE, then added PAID content then WENT PAID…they had to deal with ALL the corps and Contracts were different with ALL of them..
THEN they now PAY to show SOME shows, to LOCK THEM UP..and insted of a show that was FREE ONLINE, now you pay..

Comedy central has jumped on YOUTUBE…but only shows SHORTS(mostly) and links to CC site to watch teh WHOLE show..ALSO they BLANK the screen for audio only on SOME shows, for 1-2 days after release..

THEn you still get COMMERCIALS AND ADVERTS..so they are STILL getting tons of money..
5 million accounts/19 million dollars? IN 2 MONTHS??
At $?? per month EACH…($14.99??)
$15 x 5 million, IS NOT 19 million in 2 months..$150 million is closer.. NOT counting adverts..
SERVERS ARE NOT CHEAP, and they are PROBABLY RENTING…but that is a VERY high price..

PAY for 1 month and SIT and watch a YEARS worth of movies in 1 month?? COOL.

SECURITY…
DO YOU REALLY THINK YOUR INFO IS PRIVATE/SAFE??? Just logging in you have 3rd party connections. AND EVERY BROWSER SENDS YOUR DATA..

ECA (profile) says:

Re: Re: Re:

i HAVE A BAG FOR THAT, AND CAN CARRY IT ANYWHERE YOU WANT..

If you can show me an English alternative, that has SOLID rules and pronunciations, as well as definitions that dont coincide with upto 6 other Words that sound the same, but mean something different. And how in hell ‘SADIE’ in french is ‘SHARDAY’..I will write in it..

Iv seen an avert for ‘this AND that’ as prizes..and phoned the company to tell them that ‘and’ and ‘or’ have different meanings…and they debated with me that THEY DIDNT.. Which is worse then debating with our Police society and politicians..

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