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Howdy, I'm MG Siegler. I’m a general partner at CrunchFund and a columnist for TechCrunch. This is where I collect things.
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Sounds great, ESPN on the Apple TV (and possibly the forthcoming iTV)! Until you see this quote:
“We’re a platform-agnostic content company,” Bratches, the network’s executive vice president of affiliate and advertising sales, said today in an interview. “To the extent that in the future there’s an opportunity with Apple to authenticate through the pay-TV food chain as we’re doing with Microsoft, that’s something that we will participate in.”
In other words: you’ll get access as long as you’re a cable TV subscriber…
As I’m not a cable TV subscriber, this is worthless to me.
For as much as I bitch about HBO being blind to future disruption, I continue to think that it’s ESPN that has to be the true pioneer here. They’re the one content provider that has the cable companies by the balls. No cable provider can afford not to offer ESPN. So ESPN has the most leeway to do what they want without fear of retribution.
Regarding the previous two HBO/Game of Thrones links, Dustin Curtis actually watched the videos (from late last year) to get some context around what HBO president Eric Kessler actually said.
As Curtis notes, the Forbes piece does seem to be linkbait-centric, but it doesn’t make the overall point incorrect. Just look at one key portion of what Kessler said:
What you don’t want to do is to pursue a distribution channel over here [ed: the internet], where you think, well, let’s go around the affiliate and we’ll get a couple hundred thousand subs. But the promotional, and packaging support we get over here [ed: the affiliate networks], which, by the way, is the foundation of our 30 million subs and enables us to get 10 million transactions, if that dissipates, and that shrinks, then we will lose a lot of subs over here.
The error in this thinking remains the notion that the cable infrastructure may not shrink. It absolutely will. It’s just a matter of when. Kessler’s comments are disturbing because he seems to view it as at least partially his job to ensure that this doesn’t happen. But it’s going to happen. It’s inevitable. He doesn’t see it.
Essentially, Kessler won’t act because he’s afraid to disrupt his own current cash cow. But by failing to act, he’s ensuring it’s going to be disrupted by someone else. Either you disrupt your own business on your own terms, or you get disrupted by someone else on their terms.
But maybe that will be a problem for HBO’s next president.
Can’t for the life of me imagine why this is.
No worries for HBO though, as cord cutting is clearly just a fad that will go away once the economy improves. Or something.
Morons.
25 million downloads of season 2 so far and counting…
Tags tech hbo game of thrones piracy

In response to my PandoDaily post about Game of Thrones earlier, Trevor Gilbert tries his hand at parody. Not all bad, but a few quick problems:
1) You can buy an unlocked iPhone.
2) Even if you stole the iPhone, you wouldn’t actually be able to use it on a carrier’s network without paying them.
3) Pretty much everything else.
But Gilbert knows this, I have to assume. From the comments, it seems he takes issue with my “sense of entitlement”. Clearly lost on him (and plenty others!) is the point.
The point is the very essence of piracy.
Piracy does not exist because there are evil people out there who are thieves and/or hate capitalism and/or feel entitled. Sure, there are some bad eggs, but they’re the exception, not the rule. Piracy exists because it’s often an easier way of obtaining content than the legal means. And sometimes, it’s the only way.
HBO doesn’t care right now because they’re raking in the money. Good for them. But they’re fools if they think the status quo will be maintained indefinitely. We’re seeing the beginning stages of where this is going right now. The pirating of Game of Thrones is all about ease of access to content.
Right now, you could wait a year to pay to get the content legally, or you could get it today for free. Remove the money element. It matters, but it’s not the key. The key is that it’s today versus a year from today. That’s the problem here.
Much of the arguments in defense of HBO today have been that it’s their content and they can do what they want. True! But they’re doing so blindly as gatekeepers who have total faith in their wall. The problem is that the wall is already full of holes.
Currently, they’re pretending the wall is perfectly intact. In a year, they’ll admit it’s been breached, and they’ll try to rebuild it. But they won’t be able to. 5 years from now, hardly anyone will be using the gate.
So why not just let everyone in now and charge them all a fee? Because admitting the wall is crumbling will mean accepting less money. Supply/demand. No one ever wants to take less money. But what they’ll have to come to terms with in the future is that less money is better than no money at all.
And yes, perhaps that means the end of high-end content like Game of Thrones which features massive, movie-like budgets. That sucks. But it is what it is.
My post was merely meant as a wake-up call for HBO and other content providers. Winter is indeed coming. A lot of people pirate today because it’s easier than getting the content legally. In a couple years, as younger people not accustomed to paying for cable grow up, so will the number of pirates for artificially restrained content like Game of Thrones. In five years, it’s not going to be pretty at all.
Unless HBO and the others get out ahead of this, that is.
The cable empires are going to die. It’s just the way it is. Nothing lasts forever. The backup plan of the premium content players should be what Netflix is doing. Content everywhere at a fair price. And they should start right now. But they’re all scared shitless to even think of walking away from that cable money.
So it will have to start walking away from them.
And make no mistake, it will. It’s just a question of when.
One year? Two years? Five years? HBO and the rest just better hope that they don’t mistime the retreat because they’re drunk on the wine from a dying resource. If piracy becomes the norm rather than the fringe, they’re going to get royally screwed on the deals for someone else to bring their house back in order. See also: the music industry.
Tags game of thrones hbo piracy tech on
The first step in war: sever all ties.
Jeremy Toeman responds to my letter to HBO (to let me pay for HBO Go without requiring that I pay for cable). He makes a number of solid points as to why the economics simply will not work right now.
But the keywords are “right now”.
I have no doubt that HBO is in no hurry to walk away from their cable partners who not only send them billions, but handle all the logistics (collecting the money, customer support, etc). But it would be very unwise to think that this model will continue in perpetuity.
The cable model is going to get disrupted. It may not happen next year, it may not even fully happen in five years, but it will happen. And as I said in my original post, HBO has a chance to lead this revolution instead of being run over by it. Right now, they hold the key: killer content.
If they’re actually worrying about things like not having the infrastructure to take payments or handling customer support, they may have already lost. They’re allowing themselves to be held hostage by a middle man that is not aging well (the cable companies). Again, one day he will die. And where does that leave HBO?
Scrambling to figure shit out while new competitors they never considered to be competitors eat their lunch — that’s where.
Tags tech television HBO cable
After my post last night about HBO breaking its cable addiction, a number of you pointed out that this will never happen because HBO is owned by Time Warner.
That’s true — but remember that Time Warner Cable hasn’t been affiliated with Time Warner since 2009. They share a name (which they use under license), but they’re a completely independent company. Time Warner owns HBO, not Time Warner Cable.
If you want proof of just how unaffiliated the two are now, look no further than the fact that Time Warner Cable is only now getting HBO Go access. Comcast and a dozen other cable providers got access first as TW/TWC negotiations dragged on.
So while it’s a bit confusing, HBO’s Time Warner parent shouldn’t hamper my plan. Time Warner should be looking towards the future, not their old cable subsidiary.
First and foremost, I love your content. You’ve produced several of my favorite shows over the years, and the hits keep on coming. I’d love to watch Game of Thrones now, but I can’t. You see, the only way to get your service is to be a cable subscriber, and several months ago I cut the cord.
The recent news that you’ve reached agreements with Cablevision and Time Warner Cable to make your iPad app, HBO Go, more widely available has plenty of people all excited. But to me it looks like a big turd sandwich. If I wanted cable, I’d pay for cable. I just want HBO, but you make it impossible.
I realize this is all about money. The cable companies send you a ton of cash and provide you with a great platform on which you are given prime billing to the elite tier customers. But the world is changing. And you need to get in front of it.
Though they’re going through a bit of a rough transformation right now, Netflix is clearly adjusting their cannons to aim right at you. In 2 years, they will be HBO — but better. Because they won’t require a goddamn bullshit cable subscription.
I’d gladly pay you upwards of $19.99 a month for direct access to HBO Go without a cable subscription. Netflix charges $7.99 a month for their streaming service right now, but thanks to your original programming, you’re worth a lot more. But Netflix original programming is coming soon, so your premium buffer won’t last forever. The time to strike is now.
If you could remove your lips from the cable company teat for a minute, you’d find hundreds of thousands — and likely millions — of customers happy to pay a premium for access to HBO Go without the cable requirement right now. That number is only going to grow. And fast.
Content is king, and you have the best content. If you do go cable-optional, a few of the cable companies may try to boycott you. But the ensuing customer relations shitstorm will only prove your value and will hasten the arrival of the post-cable world. You can lead this revolution.
So please HBO, I beg you, take control. Pre-empt Netflix and rise against big cable. Fulfill your destiny. Or I’m going to have to call on ESPN.
Update: Yes, Time Warner owns HBO, but…
While the cable companies may not be directly involved here, they should be really worried about deals like this. These types of deals will keep coming, and over time, the value of cable television service will continue to fall.
I just wonder how long it will be until HBO goes direct? That is, how long until you can buy it for a monthly fee without needing cable service at all? Because I’ll sign up in a second when that happens. And I bet it will happen soon.
Tags tech netflix dreamworks hbo
This is great news. I was always a bit hesitant to buy HBO content on iTunes due to this.
Now if only I could upgrade my SD shows to HD for a small fee… Come on iCloud, you can do it!
It also seems to me that Apple is putting more emphasis on HD content in both the movie and television stores. Perhaps this will be part of a bigger push in the fall… It really is kind of silly that SD and HD versions still exist separately. There should be one download.
Notes