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« HBOI'd save a lot on my cable. »
This is a sub-selection from Subsidies?


longtimecabl

@comcast.net
reply to mogamer

Re: Subsidies?

No. Having worked in the cable industry for years and having dined with HBO reps multiple times much of their income comes in the form of say a free promotion. If you get HBO free for 3, 6, or 12 mo the cable company uses that tactic to convince people that higher priced packages are a great value (and believe me it works every time) Comcast i.e. still is paying HBO X amount of dollars for their channel. Very, very few people have HBO a la carte anymore. Typically they are part of a bundle or package that includes HBO. Their churn is pretty high since most people a la carte subscribe just for a certain show i.e Game of Thrones and then drop HBO. The cable company promos allow HBO to get recurring revenue throughout the year. i.e. Same thing would happen if it was a la carte. The risk is just too great and makes no business sense. You don't go after the pennies when you have gold bars on auto delivery. Likewise if they did not have this revenue the wild risky shows they do try that end up being amazing would never be greenlit. i.e Girls


mogamer

join:2011-04-20
Royal Oak, MI

said by longtimecabl :

No. Having worked in the cable industry for years and having dined with HBO reps multiple times much of their income comes in the form of say a free promotion. If you get HBO free for 3, 6, or 12 mo the cable company uses that tactic to convince people that higher priced packages are a great value (and believe me it works every time) Comcast i.e. still is paying HBO X amount of dollars for their channel. Very, very few people have HBO a la carte anymore. Typically they are part of a bundle or package that includes HBO. Their churn is pretty high since most people a la carte subscribe just for a certain show i.e Game of Thrones and then drop HBO. The cable company promos allow HBO to get recurring revenue throughout the year. i.e. Same thing would happen if it was a la carte. The risk is just too great and makes no business sense. You don't go after the pennies when you have gold bars on auto delivery. Likewise if they did not have this revenue the wild risky shows they do try that end up being amazing would never be greenlit. i.e Girls

Thanks for the explanation.

Skippy25

join:2000-09-13
Hazelwood, MO
reply to longtimecabl

Though your explanation is good, I think it is deeper than that.

I have seen quotes by these execs before simply stating that offering it outside of the cable subscription will lower the perceived value to the cable companies thus making them want to pay less for it. That ultimately is why they tie their product and don't want to alienate their coffers.

For HBO, it should be a wash. They offer it standalone for the same price they offer it through cable. Those that dont want cable get it and being that the cable industry doesnt believe cord cutting is happening and a threat it is a wash to them as the person didnt subscribe to cable isnt costing the cable company a thing all the while giving HBO something.


axus

join:2001-06-18
Washington, DC
Reviews:
·Comcast

I think he's saying the cable Cos are paying HBO during the free promotions, while the customer isn't (directly).

I'm sure there's a laziness factor, where people would drop a bunch of money on a bundle, but not bother with 10 different subscriptions direct to the content providers. The person choosing the cable subscriptions isn't always the one working to pay for it


Skippy25

join:2000-09-13
Hazelwood, MO

That could be, but the bottom line is that they still get a vast majority of their money from subscribers and the rate is higher because they attach an artificially escalated value to the program by staying with cable.

It is basically a you scratch my back and I'll scratch yours deal like exclusivity, but without all the exclusiveness.