I know you were talking about a direct service but this argument affects HBO's current cable delivery model too.
I am a cable cutter. I made the decision two years ago after realising that the only shows I watched through my TWC/Tivo subscription were on HBO. I enjoyed them a lot, just not enough to justify spending $112 a month on the TV portion of the service. Worse, I only really watched HBO originals (the movie selection is slow to rotate and doesn't even begin to compare to Netflix). I'd get perhaps 40 hours a year of viewing from HBO (two originals, at most), which makes the net cost per hour viewed over $30. That's twice the rate of going to the cinema, never mind all the other stuff I could do in front of a TV with my time for far less (like gaming: $50 for 100 hours of Elder Scrolls, anyone?)
I ended up in this situation because I already had instant, on-demand, (mostly) ad-free access to an enormous range of current and classic TV through Netflix, Hulu, iTunes and miscellaneous network websites. I was deriving absolutely no utility from my cable subscription other than HBO. That suddenly made HBO seem inordinately expensive. It was a simple economic decision to ditch Tivo and TWC, buy a Mac Mini and a decent remote and stream everything. My bill went from $180 (including internet and streaming services) to $70 and the hardware paid for itself in under a year. (Were I a sports fan I'd be in a very different position, as no doubt I'd view $112 a month as worth it for access to live sports on ESPN.)
I pirate nothing. I miss out on none of these phantom 'water cooler conversations' people talk about. I learned patience. I have more money. It's been a good decision.
I said this had implications for HBO; I am sure I am not alone in my pre-cutter profile (streaming a fair bit, not watching much cable TV, enjoying some HBO originals) and I'm not the only one who's figured out that HBO-over-cable's cost per hour viewed makes it one of the most expensive forms of entertainment available. I don't believe HBO can compete under their current model in the long term.
I know you were talking about a direct service but this argument affects HBO's current cable delivery model too.
I am a cable cutter. I made the decision two years ago after realising that the only shows I watched through my TWC/Tivo subscription were on HBO. I enjoyed them a lot, just not enough to justify spending $112 a month on the TV portion of the service. Worse, I only really watched HBO originals (the movie selection is slow to rotate and doesn't even begin to compare to Netflix). I'd get perhaps 40 hours a year of viewing from HBO (two originals, at most), which makes the net cost per hour viewed over $30. That's twice the rate of going to the cinema, never mind all the other stuff I could do in front of a TV with my time for far less (like gaming: $50 for 100 hours of Elder Scrolls, anyone?)
I ended up in this situation because I already had instant, on-demand, (mostly) ad-free access to an enormous range of current and classic TV through Netflix, Hulu, iTunes and miscellaneous network websites. I was deriving absolutely no utility from my cable subscription other than HBO. That suddenly made HBO seem inordinately expensive. It was a simple economic decision to ditch Tivo and TWC, buy a Mac Mini and a decent remote and stream everything. My bill went from $180 (including internet and streaming services) to $70 and the hardware paid for itself in under a year. (Were I a sports fan I'd be in a very different position, as no doubt I'd view $112 a month as worth it for access to live sports on ESPN.)
I pirate nothing. I miss out on none of these phantom 'water cooler conversations' people talk about. I learned patience. I have more money. It's been a good decision.
I said this had implications for HBO; I am sure I am not alone in my pre-cutter profile (streaming a fair bit, not watching much cable TV, enjoying some HBO originals) and I'm not the only one who's figured out that HBO-over-cable's cost per hour viewed makes it one of the most expensive forms of entertainment available. I don't believe HBO can compete under their current model in the long term.