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Why HBO won’t ditch cable, no matter how much you beg it to

July 28th, 2014 at 9:15 PM
HBO Vs. Netflix Subscribers

HBO gets it: You want to be able to subscribe to its content without having to pay for a bunch of other channels you don’t want. However, just because HBO understands what you want, that doesn’t mean it care. Re/code’s Peter Kafka has an excellent post explaining why HBO isn’t going to pull a Netflix and offer a standalone online subscription, no matter how much you beg it to do so.

It basically boils down to this: HBO is making money hand-over-fist from its current arrangements with cable providers and it faces no incentive to change its business model, even if it means that an unprecedented number of people are pirating its shows.

“HBO depends on the pay TV providers to market the service, and it figures that the loss of that help would hurt it much more than the ability to sell HBO to cord-cutters and cord-nevers,” Kafka writes. “This could change, one day, if pay TV subscriptions fall far enough to convince HBO it’s time to make the leap. But right now HBO is generating $1.8 billion in annual profit for Time Warner, and it’s supposedly the reason Rupert Murdoch wants to buy the entire company for all the gold in the Iron Bank. So it’s going to stay put a while longer.”

What this means is that cord cutting has to reach a critical mass where HBO would make more money from offering a standalone subscription service as Netflix does before it would even think of scrapping its cable deals. While cord cutting is definitely a growing phenomenon, it’s not growing at a fast enough rate just yet to really be a major concern to cable companies or HBO, which means your dream of just paying $10 a month for HBO the way you do for Netflix isn’t going to become a reality anytime soon.




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