Tim Carmody offers a mild defense of cable:
Anytime anyone says, “I wish that company X would offer pay service Y without complication Z,” I ask them, “what would you pay for that?” Typically, the other person hasn’t actually thought it through all the way from “what-if?” service to actually-existing, would-you-actually-spend-so-much-money-on-that? product.
I spent the past month in a rented apartment in New York City, with only basic cable and internet. Thanks to HBO Go, I could watch Game Change and Game of Thrones on my iPad. It worked flawlessly. This is a glorious era of technology.
Of course, the only reason I could use HBO Go at all is because I get HBO via DirecTV at my home in Los Angeles. HBO doesn’t offer the option of buying it as a stand-alone product.
Carmody explains the pricing issues:
There are actually really good reasons why HBO is that cheap when bundled with cable, and why it would have to be a lot more expensive if sold stand-alone to individual subscribers.
First, to say Comcast buys HBO in bulk is an understatement. Other cable companies, too, (and satellite and AT&T/Verizon/other telecoms doing video) have profound purchasing power. They also heavily promote HBO to their hundreds of millions of customers. So HBO gets a lot more from Comcast for its $7.27 (or whatever it is Comcast might pay) than it would get from me or you for our $10.
HBO costs $10 per month because it’s bundled. It’s not the fair market price. Untie that knot, and you have to untie everything.
Will that knot get untied? Probably, eventually.
But pricing will be tricky. Remember the uproar when Netflix tried to raise its rates? Consumers have an artificially low expectation of how much digital things should cost.
Right now, HBO Go feels like a free bonus. It’s hard to know how much customers would be willing to pay if they had the chance.