Tumblr Icon RSS Icon

What Stand-Alone HBO Go Means For How We Understand The Economics Of The Internet

By Alyssa Rosenberg  

"What Stand-Alone HBO Go Means For How We Understand The Economics Of The Internet"

Share:

google plus icon

Last week, I wrote that HBO’s idea—I would not yet describe it as a plan—to let consumers buy HBO Go subscriptions from their internet service providers seemed like the most likely way to solve the problem of letting people buy stand-alone HBO Go without subscribing to HBO through a cable package: it would freak out cable companies and lead to retaliation against HBO before the streaming market was rigorous enough to support it. I was writing mostly from a consumer perspective then, but fortunately, friend of the blog Gabriel Rossman is here to write about what this adaptative mindset means for the way we conceive of our ability to freely access content that streams over the internet. He argues that it’s a short-term victory for access to certain content that’s a long-term defeat:

Suppose that your ISP isn’t happy with HBO’s offer to let it keep half the money from IP only HBO Go (which it would price at or above the price it charges tv customers) because it really wants to keep pushing you towards that “triple play” package its telemarketers keep harassing you with? Well, that ISP can just refuse to sell HBO GO to its broadband-only customers. And unlike Netflix, the ISP would actually be able to veto your purchase. It’s structurally very similar to car dealerships, where local brokers are terrified of (and can use their clout to prevent) translocal competition. This one is actually kind of scary. Imagine if you could only subscribe to the New York Times through your condo’s HOA, which would otherwise deny building access to the paperboy?

There are some ways in which this would still create problems for the cable operators, mostly in that it would undermine the two-part tariff aspect of their business model, but I think this is effectively obviated by the local veto aspect of the proposal. Moreover, cable operators are increasingly showing signs that they see the bundling aspect of their business model unraveling (mostly because carriage fees are out of control) and are willing to settle for a role of brokerage, without bundling. (Note that data caps, which don’t apply to content bought from your ISP, help enforce this brokerage role since they effectively let your ISP tax content bought on the open market).

This, of course, is all dependent on a world where high-speed internet access is something we purchase individually. If municipal wireless networks or municipal broadband ever really take off, or we move to the idea that high-speed internet access is a right rather than a commodity, then the broker role of internet service providers would be disrupted. But as long as we’re each paying to get online in the first place, even if we’re paying less money than we used to and for a higher-quality product, we’re in a position where we’ve accepted ISPs as toll-takers. That they’re going to make like Delaware and get every penny out of us for as long as they can shouldn’t come as any particular surprise.

‹ As Jay Leno Goes, Late Night Seems Poised To Return To White Dudes, Suits, And Desks

‘Veronica Mars’ Television Club: You Love Me, Don’t You ›

By clicking and submitting a comment I acknowledge the ThinkProgress Privacy Policy and agree to the ThinkProgress Terms of Use. I understand that my comments are also being governed by Facebook, Yahoo, AOL, or Hotmail’s Terms of Use and Privacy Policies as applicable, which can be found here.