Two years ago, Mashable was a virtual company of about a dozen people, reaching an audience of a few million visitors each month. Working as Editor-in-Chief from my home office in Virginia, I knew we were at an inflection point and was deciding between moving my life and work to either New York or San Francisco to help take our business to the next level.
Ultimately, I chose New York, a decision that has undoubtedly been one of the most important in Mashable’s history. Today, our publication reaches an audience of nearly 20 million people each month, employs more than 30 people in our NYC office, and sits at the intersection of technology, media, entertainment, business, marketing, and fashion. To me, it’s no coincidence that the leaders in these industries also call New York home, which has enabled Mashable to grow from a blog about technology and social media into a media company covering the impact of digital on every facet of life.
When I think about Mashable and the companies represented in the “Only in the Alley” calendar, so much of what we do is only possible because we’re in New York, applying digital to revolutionize the myriad industries that are represented here. While Silicon Valley will always be a home to remarkable technological innovation and progress, Silicon Alley has emerged as a truly unique place to create companies as diverse as the people who call it home. - Adam Ostrow” —
My boss and friend, Adam Ostrow’s fantastic opening for the “Only in the Alley” calendar featuring NYC startups.
So I read MG’s impassioned plea to HBO. I get it, I do. It doesn’t change reality.
We are not (yet) at a point where direct over-the-top subscriptions make ANY kind of sense for HBO.
I discussed this at the bottom of my “thoughts on an Apple TV” last month, but I’ll go over the basics again.
When I previously discussed HBO’s revenue stream, my estimated figures were off. According to this excellent article in The Economist HBO likely gets less per subscriber than I had said — though they still get significantly more than they would if they did an over-the-top deal.
A few facts and figures:
HBO has 28m subscribers. It lost about 680,000 subscribers between 2009 and 2010 but its revenue went up — which as The Economist notes, means that the subscribers it lost were likely not long-term subscribers.
HBO did $4b in revenue in 2010 and accounted for 1/4 of Time Warner’s entire operating profit. This is a big one. HBO is one of the most profitable and important parts of the Time Warner conglomerate.
According to The Economist, HBO splits its fee with the cablers by like 50/50. I assume this doesn’t include many of the cabler incentives and packaged bundling rates, which likely still earn HBO the same or near the same per subscriber.
HBO Go has been downloaded over 5 million times in 6 months and now reaches 98% of subscribers.
MG says that millions just like him are willing to pay $20 a month for HBO over-the-top. Sadly, I think he’s mistaken. In fact, I feel certain of it. It’s one thing when HBO is bundled into your overall plan, it’s another when it’s a separate line item.
Plus, the number of people you could possibly reach won’t outweigh the money you lose by not having sweetheart deals with the cablers. At least not now. Maybe in 3 years. Maybe not.
At any rate, trying to force a company to go against their financial interests because it helps you out seems stupid to me. Especially since if they were to do that, the money for shows like Boardwalk Empire and Game of Thrones would start to disappear.HBO is Taking Risks
What I really take issue with though is this notion that HBO hasn’t done anything extraordinary or risky or future-proof with HBO Go.
Having spoken with HBO, I know that a main reason that HBO Go was crafted was to keep people subscribed year-round. See, this is another problem with over-the-top that people don’t realize — people drop and re-pickup subscriptions frequently. Netflix sees attrition and rejoins, HBO does too.
To limit this, HBO decided to beef up its offerings and incentivize people to stay subscribers year round. They did this at the expense of an already profitable business: Home video.
In the late 1990s, with the rise of DVDs and shows like Sex and the City and The Sopranos that attained a sort of pop culture status that transcended past HBO originals (including the critically acclaimed Larry Sanders Show and Oz), HBO was one of the first to benefit from the TV on home video market. In fact, I recall buying season 1 of The Sopranos for my dad on VHS accidentally because the box was the same size as the DVD version (it was later exchanged).
The TV on DVD movement was a huge boon to the TV industry — especially with catalog titles. Still, few networks could charge what HBO charged for seasons of its dramas. Even with my Best Buy employee discount (which basically amounted to cost), The Sopranos and Six Feet Under were hella expensive. And they were also huge sellers.
I bought every season of Sex and the City on DVD the day it came out — and I got the complete series of The Wire at some insane Amazon discount and got all six seasons of Oz for like $120, also from Amazon. I prided myself in being the ultimate DVD deal shopper and I still paid a lot to get my favorite HBO shows on home video.
HBO decided to give up that revenue in order to bring HBO Go to the masses. That was a big risk, and it’s a risk I don’t think enough people respect.Bundling Under Another Name is Still Bundling
Let’s say that all our favorite channels do go a la carte, let’s take it out to its natural progression.
I’m going to re-paste what I wrote in November:
If anything, what I foresee happening is the idea that we lose the current cable structure, only to see it repackaged and sold back to us over the top by the same people.
For instance: Cablevision is my ISP and my TV provider. If Cablevision offered me a package of content that included or even was primarily over-the-top content and let me buy them in different bundles — the Time Warner bundle (HBO, TBS, TNT, Cartoon Network, CNN), the NBCUniversal Bundle (USA, NBC, Bravo, CNBC), the Disney Bundle (ABC, ESPN, Disney Channel, SoapNet), the News Corp bundle (Fox, FX, Fox News) and the Discovery Communications Bundle (Discovery, History, Animal Planet, A&E), etc., I would likely take them up on it. Let’s say they charge us a nice, even $15 per bundle — $20 if the bundle includes a premium channel like HBO.
Of course you say, well I’ll only do one or two bundles — but then you really want to get Discovery’s package cos without Discovery ID, life isn’t complete. Oh, and I better get that Viacom bundle because if I don’t get Jersey Shore, I’ll be cranky. Damn, and I’ll need the Sony and CBS (not to be confused with the Viacom bundle) bundles too. Oh — but if I agree to get all the bundles together, I can save!
By the time you pile stuff on and then pay your extra surcharge for your increased data usage, you’re paying the same as you were when it was called a digital cable bill and Internet was an add-on.
See, that’s why a la carte programming doesn’t work.
So you say you don’t want cable, but in five years you’ll likely be paying for an over-the-top cable bundle from your ISP (who is also likely your cable company) for the same price as you pay for cable now.HBO Go is Amazing
I bogart my parents account now until Cablevision rolls theirs out and I can’t wait to get it. It makes cable worth it to me. In fact, TV Everywhere makes cable worth it to me.
But then, I like TV.
A. Because it has unearned authority in the American press. If in doing the serious work of journalism–digging, reporting, verification, mastering a beat–you develop a view, expressing that view does not diminish your authority. It may even add to it. The View from Nowhere doesn’t know from this. It also encourages journalists to develop bad habits. Like: criticism from both sides is a sign that you’re doing something right, when you could be doing everything wrong.
When MSNBC suspends Keith Olbermann for donating without company permission to candidates he supports– that’s dumb. When NPR forbids its “news analysts” from expressing a view on matters they are empowered to analyze– that’s dumb. When reporters have to “launder” their views by putting them in the mouths of think tank experts: dumb. When editors at the Washington Post decline even to investigate whether the size of rallies on the Mall can be reliably estimated because they want to avoid charges of “leaning one way or the other,” as one of them recently put it, that is dumb. When CNN thinks that, because it’s not MSNBC and it’s not Fox, it’s the only the “real news network” on cable, CNN is being dumb about itself.
In fact, American journalism is dumber than most journalists, who often share my sense of absurdity about these practices. A major reason we have a practice less intelligent than its practitioners is the prestige that the View from Nowhere still claims in American newsrooms. You asked me why I am derisive toward it. That’s why.” —
Found via John Gruber and I think Rosen’s entire self-interview is worth a read.
My gut tells me that Gruber linked to this because of this whole meme that MG, Marco, Ben Brooks and others are harping on — which is that technology publications aren’t strong enough in their opinion on gadgets or reviews — it’s too murky. Ostensibly this murkiness is because of this greater American penchant for the view from nowhere.
If that’s the case — then actually, I kind of have to disagree. I think that the tendency for major tech publications (and I’ll be woman enough to admit my own coverage has been clouded by this at times — much as that pains me to write) to be more wishy-washy in coming up with a solid “yes you MUST buy this” or “DO NOT BUY THIS IT SUCKS” doesn’t come directly from an attempt to be impartial or unbiased. Instead, it’s usually about three things:
- Being too hard on a company’s product or too nasty in a review may lead to restricted access or early access to future products from that company or provider. It’s easy to say that anyone who tempers their opinion or tones down the criticism because of future coverage is a shill or a hack, but the truth is, it’s a valid concern.
Apple, for instance, only deals with certain publications (and is just now starting to reach out to more online-only personalities) for advance units. Apple isn’t going to require you write a positive review, but if you write something that just tears them apart, prepare to not get advance review units in the future.
If your respective influence outweighs whatever negative mentions you might have, you get away with more. For most tech publications, however, you’re not just fighting against one another, you’re also fighting against the established technology press that still often gets early access to the big name devices.
That doesn’t mean you can’t call a turd a turd — you can — it’s just that it helps EVERYONE if the criticism is more tempered.
- Product recommendations are inherently subjective. As such, there is a tendency to want to hedge and say, “hey, it’s not for me but it might be for someone.” When I review Android devices, I don’t do it from my own perspective, I try to do it from the perspective of a first-time users, a seasoned tech fan and also in comparison to the competition. That makes my advice less easy to sum up with a X/10 or X/5 rating.
I’ve reviewed about 5 different LTE handsets this year. I haven’t had a strong recommendation on any of them, specifically because of the battery life. However, I do point out that for the rare person that is willing to sacrifice battery for raw speed, what models may be worth their dollar.
- When writing for a personal site, it’s easy to have your own direct opinion. When you have a broader readership, it’s important to clarify who you are targeting and why.
You’re speaking to a broader audience and there are different expectations. If you achieve a status as a reviewer, like Walt, David or Andy, then yeah, you can carry on your own style and unqualified recommendations. Otherwise, it’s really more fair to do that on a personal blog.
I love Josh Topolsky, but he’s not a Walt, Andy or David — at least, not yet (give him a year, I think he will be). Since Peter basically retired from traditional reviews, Josh is likely the closest we have of the new guard of bloggers/digital-first reviewers who will receive name recognition and enough credibility so that his reviews can stand up apart from a publication as a whole. But he’s not there, not yet. That means he has to be more tempered and less “yes, this is the best.”
I will say that trying to deflect criticism does come into play — but the bigger aspects are what I outline above.
Still, Rosen’s post is totally worth a read.