So ix linked to this “great” article on Pando Daily by Trevor Gilbert. I guess I wasn’t the first to notice that Pando has a quality problem. I ripped into Farhad Manjoo in the past (German) but this blog post by Trevor Gilbert about why HBO doesn’t care about Bittorrent downloads of their award-winning show “Game of Thrones” which is said to be the most pirated torrented show ever, takes the cake in the “not getting it” department.
The answer is found in how the HBO model is set up. With HBO, the company makes no money from a la carte sales, and it never has. Sure, historically the company made a fair amount of money from DVD sales after a season had wrapped up. That isn’t how HBO, or Time Warner, makes most of its money.
The company makes most of its money by negotiating large checks per cable subscriber per month from companies like Time Warner Cable, Comcast, and Cox. This revenue stream is amplified, as Time Warner gets a check for HBO and a check for every other channel it owns that it is bundled with, regardless of how many people watch the other channels. With such a reliable and sizable stream of revenue, the company should guard it from any competitive threats. What is the biggest risk to Time Warner right now? Cord cutters.
Thank you Trevor for explaining what the old businessmodel of HBO was and how they rake in the cash at the moment.
This post reads like someone explaining to me back in 1999 why the music labels keep on producing CDs instead of acknowledging why Napster is a problem.
You are right in your assessment that Kessler won’t be working for HBO in 10 years. The way things are currently going for HBO, they will be wrecked by the Internet and file sharing in 10 years, just like the music business was.
Instead of telling Kessler that he shouldn’t ignore filesharing and that he is repeating the same old dinosaur mistakes the music industry made, you tell us why he is the dinosaur. On a blog about startups and the new economy.
If there was irony hidden in your last paragraph, I don’t see it. “Eventually cord cutters will be the majority” isn’t even acknowledging the rate of cord cutting. You don’t give numbers on that. You don’t tell us WHEN this will be a problem for HBO, if it is sooner or later.
Captain Obvious would be proud of this post. You should’ve linked to “HBO” on Wikipedia because you don’t analyze the problem. At all. You basically tell us what HBOs business model is today and pretend that the problems it will encounter somehow are far off into the future. Kessler isn’t “spot on”. He’s having his head in the sand, holding up the awesome sales figures he has TODAY, ignoring that that is exactly what the music labels did when the CD was the medium of choice.
And then came the iPod.
I mean seriously – two years of avid reporting on a possible Apple TV and you post this?
I can not, for the life of me, understand how this article can be linked as a good example for ANYTHING. You really have to wonder if Felix Schwenzel, a renowned German blogger, is regarded as that, when he apparently is stumbling forward most of the time. I really don’t get it. Why doesn’t he mark this article, which he linked to, as the stupidity it is?
As for Trevor Gilbert – you can’t fault him for having been seven years old when Napster was the big thing in the news. I worked at a daughter company of Bertelsmann back in the day, as a student. Bertelsmann later on bought Napster. And then the iPod made its debut and suddenly burning MP3s to CDs or listening to a shitty playlist on a shitty iRiver MP3-Player wasn’t the thing to do anymore. Finally we had an “MP3 Walkman” by Apple, years before Sony bastardized the name for an iRiver-quality MP3 player.
But when an article reads like someone taking some bullshit HBO press release touting the recent sales numbers and taking a quip by their Co-President and NOBODY, not a single person in the comments rips Gilbert a new one for being so astonishingly stupid as to praise that asshat of a co-prez for “pulling a Balsillie” you can’t help yourself and think that both HBO and Pandy Daily are about to go the way of the Dodo.
You know, like this