Why HBO COULD (And Should!) Afford To Offer Standalone Service

Heard about HBO GO? If you’re like most people, you just heard about it with its advent on the Xbox 360. But in fact, it’s been around for about two years. It allows people who’ve subscribed to HBO to watch all of their offerings online, on demand. It’s great, and if you’re a cable subscriber with HBO already, then you’re probably loving some Game of Thrones on your Xbox right now.

However, and here’s the sticky part, HBO isn’t offering HBO GO as a standalone service. So if you don’t have an HBO subscription (or worse, you’re a cable cutter like me), there is no option to get HBO GO. Which means you have no option for watching Game of Thrones unless you pirate it or wait until it finally comes out on DVD.

This lack of independent subscription has led to the birth of a site that asked people how much they would pay for an independent HBO GO, and the results have come in. It seems people would gladly pay $12 a month for HBO GO. Certainly I would. However, as it stands now, you need a cable subscription and an HBO subscription through the cable subscription which means if I wanted HBO GO (as a cable cutter), I’d have to pay about $100 a month.

Since that’s not happening, it seems like HBO is losing money by not offering an online subscription service to people like me. They claim that it wouldn’t be cost effective, and on Twitter, pointed to this article on TechCrunch that they said explained the monetary issue. While the article makes some good points, they come to the wrong conclusion. If you read the article, their argument basically boils down to the idea that HBO can’t afford to lose cable company support and doesn’t have the infrastructure or network to stream content to their 29 million subscribers.

Well, ok, but why are you looking at it as an all or nothing strategy? We’re not suggesting they stop being a television channel and go online only. We’re just suggesting they open the doors to people who don’t have cable. People who have cable don’t have to worry. In fact, HBO is only about $9 through a cable company, so if HBO Go is $12 a month, they’d be saving money to order HBO through cable and get their access to HBO GO the same way they do now. HBO could then offer GO as a standalone service and charge a little more  to encourage people who already have cable to order HBO through their cable provider and deter them from cutting the cable companies out of the loop.

Further more, HBO isn’t reliant on cable companies, whether they realize it or not. That’s like making the argument that Coca-Cola is dependent on Wal-Mart for sales and shouldn’t sell out of vending machines in front of Kmart. Coke and HBO both have the same thing going for them: name recognition. HBO isn’t some new network that has no promotional abilities of their own. They’ve been around for decades, have made several incredibly popular shows, and are likely the number one premium cable channel on TV. They have a strong online presence complete with social media interaction. And it’s their own online marketing strategy, not a part of some cable companies.

And with the strong programming that can only be found on HBO, it’s more likely that cable and satellite companies need HBO more so than the other way around. Yes, most people do get six months or a year of HBO free, but that’s not to promote HBO so much as to make the crappy service cable companies offer worth having. Certainly people aren’t subscribing to cable for the O Network and gratuitous commercials.

As for the ability to stream all their content, well, they run that risk now, right? They already have 29 million subscribers and just opened their doors on the Xbox. Has HBO GO gone down since that happened? No. So they clearly have a network capable of supporting all those people and the new members they’ll receive from the Xbox crowd.

In a world with the internet, television as we know is doomed. It’s going to go to the wayside just like radio did before it. Companies need to stop fighting this and embrace the internet to ensure they are at the forefront when the paradigm does eventually shift. Offering HBO GO as a stand alone service is an ideal way to bridge the gap and show that their company is looking for wise long term investment strategies rather than just short term gain. We certainly cannot let that happen to one of the last sources of inspiring content on the TV.