HBO GO Finally Cuts the Cord from Cable Providers
For decades, HBO has been the standard of premium cable television service. In that period, few networks have maintained the steady stream of hit television and original content for which HBO is famous. Via shows like The Sopranos and Sex and the City, and more recent fare like True Blood or Game of Thrones, HBO has made a consistent case for the $10 – $15 per month premium on top of your cable bill.
Now, thanks to fierce competition from streaming services Netflix and Amazon Prime, HBO can be had sans cable subscription for the first time in its 42-year history. Starting in 2015, HBO will be offering its online streaming HBO Go service to non-cable subscribers. Although many of its shows are already available online via Amazon Prime, this will mark the first time that HBO has presented a standalone offering in the United States.
This is an obvious move for HBO, albeit one forced upon them by a rapidly changing entertainment landscape. Cable subscriptions, rife with dozens of channels you may not want, are looking more and more antiquated in a world where streaming content is fast usurping the entertainment throne. Unfortunately, the cable model has been so profitable for companies and networks that they saw little reason to change it, regardless of consumer demands.
As many times is the case, HBO and the cable companies’ intransigence paved the way for competitors to swoop in and create a new platform. First Netflix, then Amazon began to make high-quality, mature content that rivaled the production value and popularity of HBO’s own programming. Shows like Lily Hammer, Orange is the New Black, and of course, House of Cards, led to an explosion of nearly 17 million new subscribers for Netflix. Amazon followed suit with its political comedy Alpha House, now in its second season after near-universal acclaim. No doubt a portion of those 17 million new subscribers were cord-cutters tired of being tethered to the couch and force-fed extra channels. Netflix and Amazon are both available on more platforms, are cheaper, and now offer equally compelling original content. It doesn’t take a genius to figure out what consumers, especially the ever-coveted millennials, are choosing to watch.
Although on the surface this may seem like a triumph of consumer demand over corporate greed, many are reluctant to ride off into the sunset just yet. Some analysts believe that this may be just the “in” that ISPs (internet service providers) need to exploit weak net neutrality laws in the United States. For the uninitiated, net neutrality is a term coined by Columbia law professor Tim Wu to suggest that all internet content should be equally available, independent of the source. When the internet and its providers are neutral, the plucky startup website enjoys just as much visibility on the web as giants like Google and Amazon. Without net neutrality, ISPs are free to offer what is called “tiered internet service,” where they can charge users for access on a per-site basis and charge websites fees to deliver content faster. This will leave smaller companies at a disadvantage and will inevitably stifle innovation. If ISPs are able to charge $39.99 to access Google, Facebook, and Netflix, and $59.99 to access everything else, smaller sites will struggle to gain visibility, decreasing the chances that the next Facebook or Google will succeed.
So with HBO, a Time Warner subsidiary, moving to the web, it’s natural to wonder if they are truly buckling to consumer demand, or preparing a springboard to another subscription bundle, only this time with your ISP instead of a cable provider. The worst-case scenario would see the internet resembling cable television in the next few years. The FCC seems reluctant to close the issue by reclassifying ISPs as common carriers under Title II of the Communications Act, so as of now, this future remains a possibility. If this idea makes you cringe (as well it should) then please send your representative a letter concerning net neutrality by visiting www.battleforthenet.com.