It doesn't make sense for the cable operators, either. Almost all of the cost aside from fees paid to channels is a fixed cost, the same whether you run 10 channels or 1000. It's just economic sense to keep on adding channels so that you can have something for anyone who might be willing and able to buy your cable service. Or at least it makes sense now
- it might not make sense if the cost of sports programming continues to skyrocket, dragging up the cost of cable with it. Bloody sports fans . . .
In any case, HBO is not going to change their business model until cord-cutters actually make up a significant chunk of the population in the US market. Right now, they're only 4.5%
of all US households - less than the percentage of households that have only broadcast television and no
broadband internet connection. Meanwhile, most households with broadband also have pay-tv service, and simply adding HBO is relatively cheap.
It's worth watching this interview with HBO's Co-President. The first few minutes are the guy rambling on about HBO GO, but there are some interesting bits in there about why HBO works through the cable ecosystem. Most interesting was his response to the question of whether or not HBO's policy of putting everything on HBO GO was undermining the sale of DVD/BRD - his response was that A)the whole DVD/BRD market is less than 20% of HBO's total revenue, and B)the number of people who substitute HBO GO for DVD/BRD was actually pretty small when they measured it in their market research.
Edited by Lane Pryce, 14 May 2012 - 01:53 AM.