HBO and Apple in Talks for $15/Month Apple TV Streaming Service Launching in April

[LethalWolfe]

Can you assign any parallel to the way tv shows generate ad revenue with tv stations and the way movies generate concession revenue for movie theaters? How many tv shows are created by production companies and simply sold to say, CBS and local affiliates (like they are movie theaters that need concession revenue) vs tv shows that are created by NBC themselves? Not sure how all that works and how it affects how likely a particular TV show would end up in an ala carte scenario.

All really good questions unfortunately I'm not familiar enough in those areas to give a really good answer. I don't know how well a movie studio/movie theater relationship could parallel with a TV Network/TV station relationship because movie studios and movie theaters are completely separate entities where as TV stations can be independently owned & operated, owned & operated by a TV network or affiliated/partnered with a TV network.

Good points you raise here.
Sure, movies get revenue directly from the consumer, but also later (much later) from TV and their advertisers.
TV shows however, also get their initial pay check from TV advertisers, although since the use of PVRs are now common place, I don't know how many people still sit thru commercials to justify that whole model.

The money trail for both movies and TVs gets pretty byzantine pretty quick (especially when you consider that pretty much each country requires a unique distribution deal) which is why I was keeping it very basic. For example, back in the day a movie would have a theatrical window, a rental window, a pay-per-view window, a retail window, a premiere cable window, a basic cable window and a broadcast TV window. Each one of those was a separate deal and each one was staggered so as not to step on each others toes. Then comes streaming VOD which steps on all their toes. Let the hilarity ensue!

I think your estimate is quite on the low side when you factor in marketing costs that have been soaring:
http://www.hollywoodreporter.com/news/200-million-rising-hollywood-struggles-721818
Total up front costs are definitely in the 3 figure millions these days, except for indie films.

The estimates I gave were just the production costs. Factoring in marketing will of course increase the costs for both movies and TV shows.

I'm still hoping that aside from the existing sales models, that we will see an a-la-carte download model.

You have it, you just don't have it at the price you want it at. Right now there are certainly growing pains going on and I think those will continue for a number of years until revenue from the new models starts exceeding revenue from the old models. Speaking of money, one thing to keep in mind when thinking about all these revenue streams is who goes into 10's (if not 100's) of millions of dollars of debt so this content can be made and how does that entity make a profit off of its investment?

For example, you mentioned wanting an a la carte option on a show by show basis. Who pays the money up front to get the show made so it can show up on iTunes (or whichever service)? Typically content creators won't have the money to make the show themselves so they will shop the idea around (maybe even a pilot) to different networks/channels until they find a buyer. If network/channel foots the bill to make the show it's for the sole purpose of getting viewers to watch their channel so (and I know I'm repeating myself) why would they want to give people the option to watch their show someplace else? It's a completely foreign concept to them as TV (and radio before that) has always been ad driven (hence some of the clunky attempts at solutions so far).

The streaming companies are basically following the same pattern of making their own exclusive content though. Can I stream the current season of House of Cards on Amazon? The current season of Transparent on Hulu? The current season of Quickdraw on Netflix? Nope. Today people complain about NBC and FOX, maybe the next generation will complain about Netflix and Hulu.

Apologies for the rambling, but I think this is a fun topic to talk about.

 

[Kid Red]

I have HBO through DirecTV and I pay $15 for 6 HBOs. I'd have a hard time justifying $15 for 1 HBO.

 

[harley3k]

I have HBO through DirecTV and I pay $15 for 6 HBOs. I'd have a hard time justifying $15 for 1 HBO.

I was thinking the same as I have DirecTV, but then I questioned how
many HBOs can I watch at the same time? One.

The HBO-GO App now has everything On-Demand anyway - Even if there are live events on multiple HBO channels now - which I've never noticed, I would have to record one and watch it later, while watching the one live.

I think the On-Demand nature of HBO-GO makes having multiple channels obsolete. Because with everything On-Demand it's like having hundreds of HBO channels.

 

[garylapointe]

So, you may pay a bit more for your internet, especially if you are a big user, but pay a lot less for the actual content. I think its a fair trade.

I think it's all work out.

Gary

 

[laurim]

Ya know, when I first heard about this I was all giddy since I've been a cord cutter for about ten years now. Hell, I started the movement!

Anyway, when you think about it, there really isn't any reason to subscribe to this type of thing since you can simply wait until the show ends up available on disc or through a streaming service. If it never makes it to streaming then just rent the discs like we do or buy the entire set when it comes out.

Watching these popular shows live is great and all but not everyone gaurantee that they'll be able to plop down in front of the TV at the same time each night or whatever. Maybe they don't want to? What I'm saying is that there is plenty to watch while you wait for other shows to become available. Watching using discs is great because you can watch extra episodes when you want, skip bad ones, rewind, pause, etc, etc. and you can watch them anytime you want.

This is still good news since pay TV sucks on every level possible. But, paying for each channel via ala carte which is what we all hoped for isn't exactly the cats meow either as it turns out.

Sure, you could wait a year to get the show cheaper but then you would miss out on all the fun of discussing last night's episode with your friends and risk hearing the big story points before you get to watch it. The social aspect of watching movies and shows is a large part of the experience for many people and that's why they will pay to get the content fresh. I have a strong dislike for going to movie theaters and it can be tough waiting for a movie I want to see to come to iTunes. I accidentally heard all sorts of spoilers for Gravity before I got to it and that sucked.

 

[BruiserB]

Just checked my DirecTV statement and see they are now charging me $17.99 for HBO. I usually turn it off for a few months and try to get a special to resubscribe. Hoping this is true. Will switch it to an AppleTV subscription in a heartbeat.

 

[dexterbell]

Not if you only watch 2 channels.

So you'd rather pay $30 for 2 channels than $45 for 200? That makes no sense

 

[LordVic]

So you'd rather pay $30 for 2 channels than $45 for 200? That makes no sense

That'll matter per market of course. But in some markets, its a clear winner the other way.

Here, if I were to get Netflix, HBO and NHL, the 3 channels I only watch that are pay. everything else free online. I would be paying < $20 per month for the entirety of my TV watching habbits.

However, from the cable company, when you start factoring in service fees, taxes and everything else they tack on, you're starting at $90 something a month. And if you want additional packages, since not all programming is bundled in logical packages, That is a significant savings.Not worth programming, that I in no way will ever consume.

but I get that this isn't going tobe a universal thing.

 

[LethalWolfe]

So you'd rather pay $30 for 2 channels than $45 for 200? That makes no sense

I was being cheeky, but what's wrong with paying $30 for only what you want instead of $45 for what you want and what you don't want? $30 is less than $45.

I don't watch a ton of TV so, for me, Netflix plus buying season passes to the shows I do want to watch (Walking Dead, Sons of Anarchy, etc.,) is much cheaper than having cable. If I watched enough TV then having cable would be the cheaper route.

It's like buying a 12 pack of soda for $8 vs just two cans of soda for $1 each. Yeah, the 12 pack offers a lower cost per can but I just want two cans. $2 for what I want is a lot less than $8 for what I want plus what I don't want.

 

[technosix]

On one hand as an Apple enthusiast I'd like to think they're finally moving forward in the right direction. I have the current version of Apple TV, yet based on how Apple has allowed the quality of their mobile OS to decline and the rather limited poor performing iCloud situation, I've lost confidence.

I'll take a wait and see position, sit back and watch to see _if_ and how long it takes Apple to ship a version of iOS 8 that makes my iPhones 6 and 6 Plus bug free and able to operate without multiple crashes in the course of a day. Once I no longer have two buggy iPhones to deal with I'll be ready to move forward with Apple purchases.

 

[Ibjr]

i suspect it might be just for their TV stuff, not movies which I believe are in HBOGo.

Why would you suspect that? HBO, unlike other premium channels, is sold by MVPDs based on a percentage of profits. So $15 a subscriber would be far more than they make per subscriber on MVPDs and would be more than enough to cover MLB licensing costs. I'd suspect they'd role HBO's OTT streaming service licensing when they do the HBOGO licensing, so I doubt their non HBO content was differ much.

 

[laurim]

Why would you suspect that? HBO, unlike other premium channels, is sold by MVPDs based on a percentage of profits. So $15 a subscriber would be far more than they make per subscriber on MVPDs and would be more than enough to cover MLB licensing costs. I'd suspect they'd role HBO's OTT streaming service licensing when they do the HBOGO licensing, so I doubt their non HBO content was differ much.

Besides the fact that once you stop subscribing to HBO via cable you cut your ties to HBOGO content (unless you are stealing it with someone else's cable subscription). HBO NEW has to be exactly like HBO GO, just accessed in a different way.

 

[D.T.]

Besides the fact that once you stop subscribing to HBO via cable you cut your ties to HBOGO content (unless you are stealing it with someone else's cable subscription). HBO NEW has to be exactly like HBO GO, just accessed in a different way.

Heck, the access mechanism will be the same, it's really just network based authorization, the cable/sat companies just currently connect physical installations to an account.

Right now, Comcast - for example - could just create you an account with the proper channels, not do any actual install and you'd be good to go.

 

[dexterbell]

I was being cheeky, but what's wrong with paying $30 for only what you want instead of $45 for what you want and what you don't want? $30 is less than $45.

I don't watch a ton of TV so, for me, Netflix plus buying season passes to the shows I do want to watch (Walking Dead, Sons of Anarchy, etc.,) is much cheaper than having cable. If I watched enough TV then having cable would be the cheaper route.

It's like buying a 12 pack of soda for $8 vs just two cans of soda for $1 each. Yeah, the 12 pack offers a lower cost per can but I just want two cans. $2 for what I want is a lot less than $8 for what I want plus what I don't want.

I guess. I mean, I would rather pay a little more and have a ton to choose from, especially just in case something came on I really wanted to see live. I can't live without Sunday Ticket and some other cable channels so Id never ditch it. Your theory is great but a season pass to watch every show like that will never happen, the FCC will never allow it. Commercials and sponsors are what gives these networks money to operate to begin with and the FCC wants you watching your local programming. Thats why they ended east coast feeds for us here on the west coast years ago. From what I have see of Season Pass on Sony, its pretty limited and you may have to wait awhile for shows you really want to see. I seriously doubt you will ever see the day where you can watch a full season of any TV show unless it were well after it had already aired on its network like Friends or Lost on Netflix, but those shows ended many years ago.

 

[LethalWolfe]

I guess. I mean, I would rather pay a little more and have a ton to choose from, especially just in case something came on I really wanted to see live. I can't live without Sunday Ticket and some other cable channels so Id never ditch it.

Everyone's got their own cut off point and it does really depend on how many shows you watch. I probably bought season passes for about 8 shows annually so assuming $30 a season that's $240, plus Netflix ($9x12 = $108) and my Internet was about $60/mo ($720). So $1,068 for my viewing entertainment. I recently got cable again and the best value from TWC in my area is a triple play package that, for the first 12 months, costs about $130/mo so $1560 a year (and this is a discount package that's only good for 2 years). $1000 vs $1500 is a decent price difference, IMO.

Your theory is great but a season pass to watch every show like that will never happen, the FCC will never allow it. Commercials and sponsors are what gives these networks money to operate to begin with and the FCC wants you watching your local programming.

I don't think the FCC has anything to do with it. It's up whomever owns the shows and the current contract obligations they have. The networks themselves are reluctant to do it because of the impact on ratings (which impacts ad revenue) but some more than others are offering their shows as season passes from iTMS or Amazon or streaming them from their own site and/or app.

I seriously doubt you will ever see the day where you can watch a full season of any TV show unless it were well after it had already aired on its network like Friends or Lost on Netflix, but those shows ended many years ago.

Maybe I'm misunderstanding what your saying, but you can watch a lot of current TV shows right now. You typically just have to wait until the day after it airs. I've watched many seasons of Justified, Walking Dead, Orphan Black, etc., on Amazon streaming and I just had to wait until the day after it aired on TV. Even current seasons of network shows like Grimm, The Good Wife and Parks & Rec are on Amazon.

 

[rdlink]

I'm not the one with hundreds of servers uploading this stuff. Your problem is with them not me.

Seriously? Did you really just make that argument? So when you shoplift do you blame the stores for not having good enough security?

Just do yourself a favor and either admit you're a thief, or stop stealing. It's really that simple.