HBO and Showtime Try to Preserve Existing Revenue

Categories: Internet TV,New TV Technology

Written By

May 13th, 2008

HBO on iTunesJust a follow-up on the HBO on iTunes deal.  I suppose it's somewhat remarkable only in that HBO was able to get Steve Jobs to bend over and take one for the team.  But really I think Jobs just figured, "these guys are dopes, but I kind of need these content producing dopes to enable my grand vision of being the distribution mechanism for all video content!"

The guys at HBO, Showtime (and oh yeah, the broadcast networks) they don't really want to hear what I want.  Because what I want will involve a complete bone crushing of many existing revenue streams.  But, I have seen this movie before played out with MP3s.  As I recall, the record company executives worked furiously at protecting existing revenue streams.  How'd that work out? D'oh!

HBO and Showtime now share a designation on iTunes that nobody else in the television industry has: their shows only go up on iTunes once they are available via DVD.

Then I read this: 

Robert Hayes, general manager of Showtime Digital Media, said the delay reflects the network's concern that people would watch shows online instead of subscribing. "We're a billion-dollar-plus business," Hayes said. "Our main revenue stream is subscriptions.... [The delay] is kind of keeping that experience pure," said Hayes in a story on the LA Times website, by Jon Healy.

Bad answer, Mr. Hayes.  You're a billion dollar plus business that isn't really GROWING.  Are you making money selling Weeds and Dexter DVDs?  Sure. But not $100 million, or even $50 million or probably even $25 million even if you take the Dexter sales and ADD them to the Weeds sales (for each season, not cumulative). By the way, I think both of these are great shows which would be much more popular and sell many more DVDs if they weren't on some obscure network that's only available in about 16% of the homes in the United States.

I understand a billion plus is something anyone would want to hold on to, but typically businesses that focus on preserving revenue streams rather than growing them - shrink.  In fact, if you can give me one example of ANY media-related business that focused on revenue preservation instead of revenue growth that preserved its revenue, please school me.  I'd love to know.

Times' blogger Healy must be my brother from another mother because we seem well aligned in many ways:

"By trying so hard not to cannibalize their subscriber bases, HBO and Showtime prevent themselves from competing effectively with other online outlets for viewers who aren't subscribers today. After all, there's no shortage of ways to watch the networks' most popular shows online without paying for them," wrote Healy.

Me?  I'm still pulling for Steve Jobs because I want push button control of sending video from the living room to my bedroom or even to my iPhone.  Steve is thinking about all that.  Sure, he's taking his own sweet time actually creating it,  largely I suppose because he doesn't want to freak the studio and network honchos out, but this may just be wishful thinking on my part. 

I'm not actually a huge Apple fanboy. OK, I have a Macbook and an iPhone and about 7 iPods, but still.  Other than the iPods all the other purchases came in the last year.  I've held out on AppleTV because without a DVR it's completely worthless, and I'm waiting for the model with DVR AND Slingbox functionality.  I'll be waiting a good long while, but if I live long enough, not forever.

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