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HBO and Time Warner Make a Bold Move

hbo-go In the news this morning, the incredibly popular HBO channel announced its intention to offer a standalone, web-only service in 2015. While this gets many cable lovers fantasizing about cutting cable TV out of the bill without losing their weekly fix of “Game of Thrones,” there are implications behind this announcement that may end up costing the viewer. As Internet speeds have increased and stabilized, we’ve heard the cry, “A la carte cable!” from more mouths every year. But analysts and economists have held firm that this may not actually be what we all want. One writer for pointed to Apple and Amazon’s current a la carte menus as good examples: when you add up all the $.99, $1.99, $4.99, and $7.99 purchases you make in the course of a month, plus the automatically recurring charges for subscriptions, you’re sure to get sticker shock. Now think of all the cable channels you actually do watch, and imagine paying individual prices for each of them – the monthly cost is more than your current total cable bill, every time. Cable subscriptions alleviate costs for users and for premium content producers, like HBO. Users pay set rates within a reasonable range for the channels they want plus several they don’t want. The cable provider absorbs some of the cost (for things like billing, support, infrastructure, and equipment) so the user pays less for the premium services they enjoy. The content producers and premium channels – HBO, STARZ, etc. – don’t have to handle billing and support costs, so they have larger budgets for making the amazing TV dramas we all love. Erik Kain, a writer for, holds that “If HBO were to break off and do a stand-alone service they would…incur huge additional costs in terms of support, billing, and infrastructure that they currently aren’t burdened with. This would make producing the content they produce now – including extremely expensive shows such as Game of Thrones – impossible. At the very least, it would be a huge risk.” So while HBO’s standalone channel is pretty ideal for GoT fans, it could be the first rock in an avalanche of expensive, a la carte, internet-based services that will one day have us remembering subscription cable as “the good old days.”
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About the Author

Jess Hutton loves to research, and she loves playing with apps, gadgets, and food. When she's not face-to-face with a screen, she and her husband take their two dogs out for hikes and ice cream.

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