HBO’s long-awaited announcement that it plans to offer consumers an internet-only version of its content is more symbolic than anything else. The company offered few details about the delivery method, pricing and depth of the soon-to-be standalone, cable-less product, but one thing is certain: Consumers will soon have one more big reason to opt out of a cable company’s bundle of channels. While we wait for more information, we’ve compiled a few speculations about what the move means from our Media, Entertainment and Technology team.
And now the work begins
On the one hand, this news proves that with enough vocalizing, consumers can force major industry changes and demand products that better fit with their needs and expectations. On the other hand, what the heck took HBO so long to comply? Missed opportunities aside, HBO’s eventual capitulation paves the way for other enormous media brands to do the same.
Will Millennials, up till now subscription-averse, gobble up the individual streaming subscription offerings now being marketed to them? Like beleaguered revolutionaries who’ve finally toppled the powerful regime and won the war, I think consumers will look at each other and say, “Now what?” Well, now the work begins — the work of sorting, filtering, researching, comparing and deciding; the work of forging a democratic method for accessing media. In our recent research Fishing in Too Many Streams, we examined how consumers are coping with the onslaught of streaming choices. There’s a clear problem: Self-aggregation is too big an ask for many TV fans. Each former “channel” (HBO, CBS), each portal (Netflix, Hulu, Amazon) and each hardware interface (Apple TV, Roku, Chromecast) expects to draw in the viewer, but only the platform that does the best job of surfacing, sorting and enabling relevant discovery will win the lion’s share of loyalty and revenue. And right now, none of the land-grabbing streaming brands has proven that they understand this.
—Rachel Steinhardt, Lead Editor MEAT/Millennials
Competitive pressure: It’s on!
This move puts the Comcast/NBCUniversal behemoth in a precarious position. Now that HBO and its ilk have talked up their definitive à la carte streaming plans, NBCUniversal properties (NBC, E!, Bravo, USA and Syfy) can’t follow without drawing unwanted attention to the outdated business model of their parent company, Comcast. There’s no way for that company to look like anything but an un-strategic laggard, and the timing couldn’t be worse for the beleaguered brand. The news of HBO, CBS and ESPN leaving the “nest” comes on the heels of some very public ridicule of Comcast and its unfavorable customer service practices and standards.
A flexible, choice-enabling business model is a must if the company intends to keep up with the increasingly high standards of the next generation of media consumers. It’s no longer a top-down world where brands and corporations dictate consumer needs and purchases. Listen up! Consumer empowerment is here, and it’s showing no signs of slowing.
—Kelli Theiler, Consumer Analyst MEAT/Millennials
What drives consumer demand? Hint: It starts with a “C”
HBO is a perennial top player in popular culture, with monster hits like True Detective, Game of Thrones, Girls and the recently ended Boardwalk Empire. Such high-quality programming drives consumers to share HBO Go passwords, illegally download episodes and attend viewing parties in order to be part of the cultural moment. CBS also produces hits, but they’re mainstream fare that’s readily available and lacks the cachet of exclusivity.
This is why the two recent announcements from HBO and CBS, while seemingly similar, couldn’t be more different in execution. HBO is fulfilling a longtime consumer demand to be part of something (and pay to do so), whereas CBS is just looking for another venue for consumer access to its already ubiquitous content. I’d be surprised if the CBS streaming service attracted a large number of new viewers. Only time will tell if these services will change consumer demand. For now, content is king.
—Matt Dobratz, Consumer Strategist MEAT
Context is the kingdom
Well, HBO finally did it. It made the long overdue (and unsurprising) move to make its content accessible to those without a pay TV subscription. Ultimately, this is a great and necessary evolution. The media landscape is in flux as more and more content consumption takes place across an array of screens and platforms. A brand like HBO brings a certain weight to the digital world; this is an organization that knows how to find and nurture some of the best content out there. But this move won’t come without its challenges. In the short term, it’s no easy feat for a linear media company to find its place in a nonlinear world.
“It is time to remove all barriers to those who want HBO,” CEO Richard Plepler said when he announced the news. Removing barriers, indeed. Thinking about media today as barrier-less is not only smart — it’s crucial. But media brands must tread carefully: Because there’s such a glut of content and services on the market, it’s far easier to create unintentional barriers than to remove obvious ones. HBO will need to enter this arena not just with great content but also with the tools that help people find and share it. Content may be king, but in this new digital world, context is the kingdom.
—Mike Garrison, Consumer Strategist MEAT