HBO considering offering HBO GO w/o cable

[ChicosBailBonds]

I understand what you are saying. And agree with this post.

However, my post was in response to yours saying that there are fewer movies released compared to TV shows. This current post of yours does nothing to refute mine. I believe that there are as many, if not more, movies released compared to TV shows. This current post of yours shows nothing to deny that.

I was trying to track down the information.  677 movies were released in 2012 according to the MPAA.  I'm trying to track down the number of shows.



EDIT:   I was told today it would be more than 10,000 shows for television per year.  Each show is unique and you have things like Ellen that does 250 unique shows a year on just one channel.  Many shows like.  Most series are 13 episodes.  Etc, etc.  The news operations alone put out out thousands of newly created shows constantly (every day).  All come with a cost for writers, producers, etc, etc.

[Benny B]

LOL.

It doesn't effect me at all.  If you look at what I wrote, I would LOVE to sell this stuff a la carte.  Our CEO, CFO, pretty much every distributor is saying the same thing.  We would do it in a second.  I'm telling you why it won't happen...because of the content providers (Disney, Fox, Viacom, Discovery, etc, etc, etc).  I'm not against it, I'm telling you why they won't and some of it is legit, like creating content our securing sports fees. 


Maybe the IRS can fix it for us.

So if you want this to happen, why aren't you, your CEO, your CFO, and pretty much every distributor lobbying and backing McCain's bill?  Heck... you guys have a voice and an outlet to reach the exact audience who are the grass roots for this bill - cable/sat subscribers.  Yet you're bellyaching over the voodoo economics of the entertainment biz that is obviously being crammed down your throat.  If you support this measure, why are you papering us with the other side's propaganda.

So it begs the question... why are you so afraid of a little mouse?

[Lennys Tap]

So if you want this to happen, why aren't you, your CEO, your CFO, and pretty much every distributor lobbying and backing McCain's bill?  Heck... you guys have a voice and an outlet to reach the exact audience who are the grass roots for this bill - cable/sat subscribers.  Yet you're bellyaching over the voodoo economics of the entertainment biz that is obviously being crammed down your throat.  If you support this measure, why are you papering us with the other side's propaganda.

So it begs the question... why are you so afraid of a little mouse?



+1. No matter how much fuzzy math conglomerates cram down our throats trying to convince us that in their unique (LOL) circumstance as little competition and choice as possible is in the consumer's best interest, I'm not buying it.

[Chicago_inferiority_complexes]

Think about what you are saying.  Ridiculous examples.  The jeans are mass produced...it's a widget.  A television series is not mass produced, each show different, with different actors, sets, producers, writers, etc, etc.  The jeans are the same thing, same machines making them...it's a widget.  The salad is a widget. Your book example, actually you are paying more for certain books than others...why is that?  Because Tom Clancy or whomever is getting paid in advance to produce certain books and that cost is built into what you pay.  There's a reason why certain books are charged more than others, and isn't the page count.  

Like I said, you can go a la carte, and the ramifications will be huge....Canada is learning this right now with backlash as a result.  You'll pay a lot more for a lot less.  It's simple economics.  If you want to pay $20 for ESPN and $4 for Food Network, and $2 for DIY and $18 for HBO for a total of $44 for four channels...yup, you're saving money.  Or you can spend about $85 for 150.  Of course if you go with the former, many of those smaller, niche channels go bye bye.  The revenues for ESPN dry up, less money for the Marquette's of the world, etc.  It's simple economics.  

You've just admitted that I'm right with the purchase of a book. Thank you.

It doesn't have to be different with television. You just want it to be different so that consumers are forced to pay for more white trash garbage like the duck call and swamp shows. I, for one, am tuned out until your AT&T wannabe industry gets de-monopolized by market forces.

More options are always better. Welcome to market economics.

[Chicago_inferiority_complexes]

You should also note, however, that Sopranos cost so much at the end to make because of the demands of the actors, etc, it was one of the reasons they called an end to the show.  It ends up tapping so much on the cost side that they weren't able to effectively produce other shows for quite some time that could sustain the business.

I weep for the actors on the Sopranos.

But, really, if this is true it sounds like another successful market clearing operation. If consumers don't want to pay for a show, it won't come into existence. If they do, it will. If consumers want something to stay available, they'll pay for it. Something is only financially worth what people will pay for it.

Same with any other "widget" you can buy at Target.

At the end of the day, there is a lot of garbage on television, and a lot of the people behind the scenes are making a lot more money than consumers would pay if (and when) more options became available. Soon, they will. And, soon, the quality of the average entertainment option will probably increase because people just won't pay for all the excess.

[ChicosBailBonds]

So if you want this to happen, why aren't you, your CEO, your CFO, and pretty much every distributor lobbying and backing McCain's bill?  Heck... you guys have a voice and an outlet to reach the exact audience who are the grass roots for this bill - cable/sat subscribers.  Yet you're bellyaching over the voodoo economics of the entertainment biz that is obviously being crammed down your throat.  If you support this measure, why are you papering us with the other side's propaganda.

So it begs the question... why are you so afraid of a little mouse?

And do you know if they aren't backing it?   In the past 5 years I've seen probably 10 different Senators come through here, many reps, many state reps, etc.  Part of the problem may be that what he is suggesting to do isn't very good legislation (gasp, how could that be coming from the beauties in Washington...I'll probably get an audit for saying that).  Distributors say all the time they want to put certain programming on a specific tier...Pac 12 we've been saying it from day one.  Comcast Houston.  Verizon saying the same thing.  It's out there.

I'm telling you how it is and who has the control...it's the content providers (media companies, sports leagues, etc).    I'm here trying to explain the realities of what goes on.  We got into a very public dispute with Viacom last year that got to the point Jon Stewart had it on his nightly opening for several days.  We try to take on these guys when it makes sense to do so, but they're also partners as well.  Not all of them act in the same manner. 

[ChicosBailBonds]

I weep for the actors on the Sopranos.

But, really, if this is true it sounds like another successful market clearing operation. If consumers don't want to pay for a show, it won't come into existence. If they do, it will. If consumers want something to stay available, they'll pay for it. Something is only financially worth what people will pay for it.

Same with any other "widget" you can buy at Target.

At the end of the day, there is a lot of garbage on television, and a lot of the people behind the scenes are making a lot more money than consumers would pay if (and when) more options became available. Soon, they will. And, soon, the quality of the average entertainment option will probably increase because people just won't pay for all the excess.

Warrior....where would you like to take it?

How about, you order ESPN but you only pay for the football game you want, not SportsCenter and not the women's softball championship.  I hate the NBA, so I shouldn't have to pay for the NBA games on ESPN.  See where this is going?

This isn't a widget business and the cost to produce a book is nowhere on planet earth close.  We'll see what "soon" happens.  I've been hearing about it for 7 or 8 years now, from many on this board that it was next year, next year, next year.  I have no doubt someday it will, but I truly think many of you have no idea what it takes to produce content but you want to compare it to getting a salad, or blue jeans, or buying a book.  Uhm, ok.

Duck Dynasty....funny show.  One person's garbage is another person's treasure.

[Lennys Tap]

Chicos,

I'm not saying when or even if the system will change. The powerful (team owners, player unions, content providers and content deliverers) have a rigged wheel and they'll fight tooth and nail to keep it that way. And since this system puts food on your table I think it's normal to try to rationalize or excuse their behavior. But...and it's a big but....can you honestly, in your libertarian heart of hearts, tell me that free market principles should apply and are effective in every industry but your own? That for some bizarre reason less competition and fewer choices for consumers are good things in the television industry when they're anathema everywhere else? C'mon, man

[ChicosBailBonds]

Chicos,

I'm not saying when or even if the system will change. The powerful (team owners, player unions, content providers and content deliverers) have a rigged wheel and they'll fight tooth and nail to keep it that way. And since this system puts food on your table I think it's normal to try to rationalize or excuse their behavior. But...and it's a big but....can you honestly, in your libertarian heart of hearts, tell me that free market principles should apply and are effective in every industry but your own? That for some bizarre reason less competition and fewer choices for consumers are good things in the television industry when they're anathema everywhere else? C'mon, man

Ironically, the stuff I'm in charge of is a la carte (sports packages, HBO, etc) so I'm already operating in that world and have for many years. 

Free market principles don't apply in many industries, that's what I've said from the get go.  There is no such thing as a free market.  Every industry is regulated in some fashion....every industry.  Utilities, insurance, food, healthcare, etc, etc.  All are heavily regulated and are not true free markets in the purist sense.  But, I certainly agree with you that some are more free than others and I suspect that's what you are getting at.

And to answer your question, yes, I do think some industries should not work under a free market principle because of the nature of their business.  I think sports is one area.  I absolutely believe in a cap, a hard cap in which all teams have the same amount to work with in terms of salaries.  That isn't free market, but when talent is so hard to find in that type of business, I do think it should be the case. 

I will again point to Canada that is going the a la carte model and now when they finally see what it is doing, they want out of it.  This is one of those classic "you have the pass the bill to see what's in it" moments.  The law of unintended consequences.  I think there is value in something like Black Entertainment Television, but if it was a purely a model based on consumption it would not exist. There are many other channels in the same vein, where if it wasn't for pooled revenues they wouldn't exist.  Some of these channels serve a niche audience, or a minority audience, but could not stand on their own.  This is one of the benefits of the system. 

Let's face it, there is bundling everywhere.  Marquette is part of a bundle.  Their power is limited on their own, but as a collective with the Big East schools they can use that power to get television deals, etc.  If I go to a grocery store and want to buy one hot dog bun, I can't...I need to buy 8 buns and pay for all 8 even if I'm going to use 1.  I can buy one can of soda for $.50 or I can buy a 6 pack for $2.15.  There are examples all over the place where we "tolerate" bundling that doesn't even benefit us that much.  With television (or radio...see Sirius XM), you are also benefiting niche audiences that could not do so on their own without it.  So yes, in some cases I do support it. In many cases I do not.  It depends what it is.  Should I have to fly gov't airlines?  No.  Does society benefit?  Unlikely.  Should we have a system where channels like PBS, BET, Smithsonian Channel, etc are available for a low cost and included in a bundle....I don't have an issue with that.  Should all customers have to pay for sports programming...I don't think so (see, I'm pro a-la carte here).  So it depends what it is.

[ChicosBailBonds]

On point

Pac 12  http://zonazealots.com/2013/05/17/larry-scott-pac-12-network-miserably-failing-expectations/


CSN Houston   http://blog.chron.com/sportsmedia/2013/05/csn-houston-faces-tough-decisions-due-to-financial-strains-crane-says/

[Benny B]

If I go to a grocery store and want to buy one hot dog bun, I can't...I need to buy 8 buns and pay for all 8 even if I'm going to use 1.  I can buy one can of soda for $.50 or I can buy a 6 pack for $2.15.  There are examples all over the place where we "tolerate" bundling that doesn't even benefit us that much.  With television (or radio...see Sirius XM), you are also benefiting niche audiences that could not do so on their own without it. 

"Bundling" is not the same as "buying in bulk."  If you buy a six-pack of Coke... even if you only drink five, you are merely buying excess of something you need.  If the only six-packs of Coke you can buy are in a "bundle" that contains four Cokes and two Diet Cokes and you're phenylketonuric, the difference is that with the former, you have an opportunity to fully utilize your purchase; however with the latter, you are being forced to pay for something you can never utilize just to get to a product you want.

I'm sorry, but that concept reeks of anti-trust... and frankly, that's exactly where the gov't needs to step in.

[Chicago_inferiority_complexes]

If Coke only sold six packs, they would go out of business. Eventually, competitors are going to step into the market to such an extent that brands like Disney will be forced to offer more options for their product. The process might take 10-15 years, but the companies that do not diversify will not survive.

I hope you are not arguing that the government should protect existing entertainment monopolies with your comment about the free market not applying to the industry. The laws of economics apply to any industry whether they want it or not. I think you will admit that those laws are pointing to eventual change.

[reinko]

"Bundling" is not the same as "buying in bulk."  If you buy a six-pack of Coke... even if you only drink five, you are merely buying excess of something you need.  If the only six-packs of Coke you can buy are in a "bundle" that contains four Cokes and two Diet Cokes and you're phenylketonuric, the difference is that with the former, you have an opportunity to fully utilize your purchase; however with the latter, you are being forced to pay for something you can never utilize just to get to a product you want.

I'm sorry, but that concept reeks of anti-trust... and frankly, that's exactly where the gov't needs to step in.

Your soda example you have to think about pricing. Coke will gladly sell you one can at a time, but a .75 apiece, while you can buy 12 cokes for around .35 apiece.  So should Coke be forced to price every can at the same price regardless of quantity because it's not fair to charge different prices for when you buy different quantities?  And sure, if you want to create your six pack of soda, you will pay a premium.

So while cable a la cart pricing sounds great in theory, I would be curious to see in reality.  And while folks cry monopoly with cable billing, no one is forcing you to buy cable right now...these are companies, and yes of course I want my cable bill to go down (and Chicos your local sports charges are still BS  
but at the end of the day I think they are primarily motivated by $, but they still have to look out for the best interest of their millions of customers because as soon as our countries internet infrastructure is upgraded that can efficiently deliver, download, and store HD content, more and more folks will unplug the cable box.

[Lennys Tap]

Your soda example you have to think about pricing. Coke will gladly sell you one can at a time, but a .75 apiece, while you can buy 12 cokes for around .35 apiece.  So should Coke be forced to price every can at the same price regardless of quantity because it's not fair to charge different prices for when you buy different quantities?  And sure, if you want to create your six pack of soda, you will pay a premium.

Of course ala carte pricing will be higher per unit, but sometime you just want an order of fries and not the #4 so you don't mind paying a premium for that choice. Nobody is suggesting that cable companies shouldn't be able to charge a premium to customers who want to pick and choose or that bulk buying (bundling) shouldn't result in a discount. We just don't want those choices dictated to us.

[reinko]

Of course ala carte pricing will be higher per unit, but sometime you just want an order of fries and not the #4 so you don't mind paying a premium for that choice. Nobody is suggesting that cable companies shouldn't be able to charge a premium to customers who want to pick and choose or that bulk buying (bundling) shouldn't result in a discount. We just don't want those choices dictated to us.

Fair enough, good points.

[Lennys Tap]

 I think there is value in something like Black Entertainment Television, but if it was a purely a model based on consumption it would not exist. There are many other channels in the same vein, where if it wasn't for pooled revenues they wouldn't exist.  Some of these channels serve a niche audience, or a minority audience, but could not stand on their own.  This is one of the benefits of the system.  

So because YOU, in your infinite wisdom, have decided that some stations deserve to be aired regardless of their economic feasibility YOU want to force your customers to pay for them? So eliminating competition and picking winners is OK as long as we have really smart, good guys like yourself in charge of that? The unintended consequences of that line of thinking are infinitely more dangerous than letting failing networks fail.

[Canned Goods n Ammo]

If Coke only sold six packs, they would go out of business. Eventually, competitors are going to step into the market to such an extent that brands like Disney will be forced to offer more options for their product. The process might take 10-15 years, but the companies that do not diversify will not survive.

I hope you are not arguing that the government should protect existing entertainment monopolies with your comment about the free market not applying to the industry. The laws of economics apply to any industry whether they want it or not. I think you will admit that those laws are pointing to eventual change.

Bingo.

Eventually, the free market and technology are going to bust up the current model.

Outside of live events, there is no need to "broadcast". You can just have a "release date", and consumers can intake on their own time.

I don't think McCain really needs to get involved. Let the guys from google or facebook figure it out. Once they do, the current delivery model will die on the vine.

[Chicago_inferiority_complexes]

Chicos, you should probably be encouraged that McCain is getting involved. As surefire a way to guarantee that it won't work as probably exists. We could get bundling for the next 150 years.

[ChicosBailBonds]

If Coke only sold six packs, they would go out of business. Eventually, competitors are going to step into the market to such an extent that brands like Disney will be forced to offer more options for their product. The process might take 10-15 years, but the companies that do not diversify will not survive.

I hope you are not arguing that the government should protect existing entertainment monopolies with your comment about the free market not applying to the industry. The laws of economics apply to any industry whether they want it or not. I think you will admit that those laws are pointing to eventual change.

I'm saying there are some industries that produce things that benefit some groups which could not survive without subsidization.  In this case, a number of tv channels serve some niche groups but not the masses.  Is it important for those channels to exist?  Today they do because everyone pays a little bit for them.  Take that away, they go away.  Now, whether that is a good thing or not, I don't know but I suspect a number of lawmakers will have their pet channels for certain constituencies that they don't want to see go.  We'll see how it shakes out.  On the sports side, like I've said...be careful what you wish for because the first entities to go bye bye forever will be those like Marquette.  Sports rights are doable today because 90% of folks are paying them even if only 30% or whatever watch.  If that becomes a la carte, only the cream of the crop will get any dollars of any magnitude. 

Disney is already doing it as is everyone else, but they are going to do it in a way that makes economic sense for them which includes development of product. This is where your argument that you keep going back to (and others) falls apart.  You want to make comparisons to buying a book to a tv show (let's see...one author writes a book and then you have printing \ publishing, distribution.  Now compare that to creating a tv show...writers, producers, director, actors, cameramen, technology folks, editing, distribution, etc).  It's a totally different animal.  They survive on successful series.  For every American Idol or 24 or 60 Minutes there are carcasses everywhere of failed programming.  It's a totally different animal and if they cannot monetize for the risks they are taking in content development, they won't do it.

[ChicosBailBonds]

Chicos, you should probably be encouraged that McCain is getting involved. As surefire a way to guarantee that it won't work as probably exists. We could get bundling for the next 150 years.

He's an American patriot, good guy, but there are things that all these guys and gals get into that they don't understand and the harmful effects or byproducts are what we are left with.  The destruction of the General Aviation industry in this country is totally at their feet.  There are so many others.

[ChicosBailBonds]

Of course ala carte pricing will be higher per unit, but sometime you just want an order of fries and not the #4 so you don't mind paying a premium for that choice. Nobody is suggesting that cable companies shouldn't be able to charge a premium to customers who want to pick and choose or that bulk buying (bundling) shouldn't result in a discount. We just don't want those choices dictated to us.

Yup, but producing fries and producing television shows are a lot different.  Producing almost anything compared to a television show or movie is wildly different, thus the different economic principles in play.

Look, I realize you don't like it.  I know you want to take a few swipes at me, that's fine.  I'm just trying to give you the realities of the situation having been in this business on multiple sides of the fence (from the Television and Radio Exec Producer for MU, or working those gigs for the Angels and Ducks, to being on the distributor side and working with these studios and content providers for more than a decade).  Changes will continue to happen on the margins, but you have to find a way for them to be able to monetize their risk.  You can say that's my INFINITE WISDOM or whatever crack you made, or you can go to any of the highly educated sources I have given to you or read others at the Wall Street Journal, Forbes, Multichannel News, sports executive commentary, etc, etc.  Don't take my word for it.

I know Apple and HBO are going to do a deal for example, but I also know it will be through authentication which means you have to be a television subscriber.  The technology is there, it's the revenue streams that they are guaranteed by the distributors that cannot be supplanted at this time which is why it is in this current model.  If the media companies could get the same billions directly from consumers, they would do it.  Some day they likely will.

[ChicosBailBonds]

Your soda example you have to think about pricing. Coke will gladly sell you one can at a time, but a .75 apiece, while you can buy 12 cokes for around .35 apiece.  So should Coke be forced to price every can at the same price regardless of quantity because it's not fair to charge different prices for when you buy different quantities?  And sure, if you want to create your six pack of soda, you will pay a premium.

So while cable a la cart pricing sounds great in theory, I would be curious to see in reality.  And while folks cry monopoly with cable billing, no one is forcing you to buy cable right now...these are companies, and yes of course I want my cable bill to go down (and Chicos your local sports charges are still BS  
but at the end of the day I think they are primarily motivated by $, but they still have to look out for the best interest of their millions of customers because as soon as our countries internet infrastructure is upgraded that can efficiently deliver, download, and store HD content, more and more folks will unplug the cable box.

The irony is if we were to charge you the true local sports cost in your area you would really scream.  We are charging $2 or $3 when some RSN costs in some DMAs is north of 6X higher.

Take a DMA like New York with YES, SNY, MSG, MSG+....all RSNs, all carrying a different pro team and all charging a ton of money to a distributor.  Los Angeles very similar.  What happens when a distributor doesn't carry that content....fans leave and go somewhere else that has it.  Tough spot to be in which is why we have requested to only offer those sports services to customers that actually watch sports.  You can imagine what the teams said. 

[Chicago_inferiority_complexes]

I'm saying there are some industries that produce things that benefit some groups which could not survive without subsidization.  In this case, a number of tv channels serve some niche groups but not the masses.  Is it important for those channels to exist?  Today they do because everyone pays a little bit for them.  Take that away, they go away.  Now, whether that is a good thing or not, I don't know but I suspect a number of lawmakers will have their pet channels for certain constituencies that they don't want to see go.  We'll see how it shakes out.  On the sports side, like I've said...be careful what you wish for because the first entities to go bye bye forever will be those like Marquette.  Sports rights are doable today because 90% of folks are paying them even if only 30% or whatever watch.  If that becomes a la carte, only the cream of the crop will get any dollars of any magnitude. 

Disney is already doing it as is everyone else, but they are going to do it in a way that makes economic sense for them which includes development of product. This is where your argument that you keep going back to (and others) falls apart.  You want to make comparisons to buying a book to a tv show (let's see...one author writes a book and then you have printing \ publishing, distribution.  Now compare that to creating a tv show...writers, producers, director, actors, cameramen, technology folks, editing, distribution, etc).  It's a totally different animal.  They survive on successful series.  For every American Idol or 24 or 60 Minutes there are carcasses everywhere of failed programming.  It's a totally different animal and if they cannot monetize for the risks they are taking in content development, they won't do it.

I don't disagree with any of this. I think there will be a lot less content around when the market moves television away from the current business model. For me, I just do not care about what will be left off. And, I think if these programs cannot survive on their own, the same way that other business' products are almost all expected to have positive ROI, the consumers don't care either.

The one thing I would possibly care about, of course, are the sports programs I care about (all two of them). But, if the market can't support them, I can't say I wasn't warned.

[ChicosBailBonds]

The news out of ESPN today....those rights fees cost a LOT of money.  Several friends impacted by this.  Despite posting profits, the margins not good enough.  Many ESPN deals are up in the next two years with distributors and the cost for ESPN (already highest of all widely distributed cable channels) will go even higher.


http://deadspin.com/source-espn-laying-off-hundreds-509043249

[Chicago_inferiority_complexes]

The news out of ESPN today....those rights fees cost a LOT of money.  Several friends impacted by this.  Despite posting profits, the margins not good enough.  Many ESPN deals are up in the next two years with distributors and the cost for ESPN (already highest of all widely distributed cable channels) will go even higher.


http://deadspin.com/source-espn-laying-off-hundreds-509043249

Same thing is going on with my company... record profit each quarter, but they are cutting staff like crazy. Gotta feed that earnings report beast, I guess. Long live Bernanke and the Dow Jones Industrial Average.