Amazon sent me a promo email offering to ‘upgrade’ my Prime membership with HBO GO for an additional $14.99/mo. I looked at HBO’s site and HBO itself charges the same $14.99/mo for Go.
Two things struck me:
- I might get a deal by subscribing as a Prime member. Turns out that isn’t the case.
- $15/mo is hard to swallow for one channel. HBO has always been a premium channel but in a world of $10/mo Netflix, $8/mo Hulu, and $8/mo Prime Video it’s really hard to swallow. Each one of these services provides access to a vast amount of content and quite a bit of exclusive content.
Exclusive content has always been the argument for HBO. HBO has always been a few great exclusive shows and ad nasuem repeats of crappy movies. Netflix arguably has some of the most popular exclusive titles. For my part, I haven’t cared about HBO since the Sopranos ended. The exclusive series might be great but I haven’t been exposed to them because it’s behind a paywall. My guess would be the only thing that was keeping HBO afloat are the old school people who subscribe via their cable company and don’t realize how much they pay for it.
People have realized how ridiculously expensive cable television for a while now. They are slashing the bill by choosing a smaller package or cutting the cord all together. Enter HBO Go, a plan to cut the cable companies out of the mix and go right to the customer. Great idea. An old school company adopting a new business model is always interesting to watch. However, charging 50% more than the highest priced competitor (Netflix) shows just how out of touch they really are. Netflix has a much larger catalog of content.
My guess is HBO nets less than $10/mo per customer when selling through the cable company. Cable company subscribers get access to HBO Go too. The biggest factor in the $15/mo price tag is not cheesing off their old school business partners by undercutting them. That hurts HBO Go’s ability to bring in new customers – the savvy ones that won’t pay $15/mo for one channel.