Much of the frustration consumers feel for media companies is based on the idea that these companies are disadvantaging consumers—and themselves—by refusing to make content available as quickly as possible and in the widest possible variety of formats. But I think Todd VanDerWeff does something valuable in explaining why, for HBO at least, the company’s careful control of access to its highest-value content is what preserves its ability to keep producing that content:
HBO, at least, has long based its model on the idea that a certain amount of people—more than 20 million of them at last check—will pay for the rights to watch the network’s highly acclaimed programming first-run. Those subscribers, in recent years, have also gotten access to the network’s HBO Go, a streaming site that contains nearly every show in HBO’s history, as well as whatever movies the network has the rights to for that period. (Numerous cable companies have made HBO Go unavailable to their subscribers, recognizing—correctly—that it probably represents the cable-less future of the network. They’re being idiots.) The network then releases its shows on DVD around a year after they initially debut…
The problem HBO (and the other premium cable channels) faces is that it’s boxed in by its need to be in bed with cable companies. The easiest solution to the problem posed in the Oatmeal cartoon is simply to make HBO Go available to anyone who wants it, for a monthly fee that would probably be slightly larger than what the monthly fee for the TV network is (to offset any costs lost from cable providers). The problem is that if the network does this, it will be seen as declaring war on the very providers who keep it coming into people’s homes. Even though it seems, to a generation raised on the Internet, like everybody watches stuff on the Internet all of the time, the vast majority of Americans still consume their entertainment on TV. Without the cable companies beaming HBO into those people’s homes, the network loses subscriber fees, which robs it of the ability to program anything beyond cheap movies.
I think folks really want to believe that if content companies were just willing to give them what they want, the alternate revenue streams would make up for the money those same companies would lose by walking away from other formats or lowering prices. But if we’re also arguing that companies shouldn’t get so upset over piracy because most of the people who are pirating things wouldn’t have paid for them in the first place, then companies may not have a lot to gain by trying to appease them. I’ve always been willing to accept that if we were, for example, to unbundle cable, that a lot of channels would die. It’s probably time for folks to acknowledge that if Hollywood moves away from its current pricing models, it will likely change the mix of things that it produces. And some of the casualties will be things that people like.