Wednesday, June 6, 2012

Why HBO Go Can't Become A Standalone Streaming Service

You may love watching Game of Throne or Girls or any number of movies and specials on HBO.  But unless you buy the premium channel from a cable subscriber you can't get access to its streaming sidekick, HBO Go.  True, "People are sick of paying for cable they never use and want to stream everything on their smartphone and laptop instead."  But at the end of the day, it would not be likely to offer the service without the risk of losing cable fees.  Sure HBO shares its license fees with cable operators.  Once HBO offered a streaming service without a TV subscription, cable operators would seek to drop the channel ASAP.

Take it a step further, HBO is owned by Time Warner which also offers basic cable nets like TBS, TNT, and Tru.  Cable operators might take a vindictive approach, like Dish is now doing to AMC Networks, and move them to a hard to find position, or worse, drop these channels as well from the line-up.  For HBO and their parent company Time Warner, there is far more risk in upsetting the current apple cart for an unproven revenue stream. So wish all you might for HBO Go as a standalone offer, the risk of cord cutting is too great for Time Warner to make a move at this time.

Carriers Dealing With Less Calling, More Mobile Usage

It seems that the rise of smartphones have led to less talking on the phone.  These devices have not become less useful; rather, they provide richer alternatives than actually making a call.  We are texting more, watching more, searching more, and interacting more with our devices, but all at he cost of actually speaking less to others through the mobile device.  "In a sea change for consumer behavior, the amount of time spent making old-fashioned voice calls has fallen every year since Apple Inc. introduced the iPhone in 2007. The rub for carriers is that voice billings still account for about two-thirds of what they charge cellphone customers every month."  So now the talk is on how to continue to mine revenue from these devices.

If calling time is down, the carriers  are seeking unlimited calling as a means to charge high knowing that the average cost per call will grow as usage declines.  In addition, we are faced with data usage charges for are 3G and 4G usage.  If we can't find a WIFI hotspot to communicate through, we will soon end up racking more charges for our data plan.

But why are carriers so concerned about this possible loss of call revenue due to downsizing of call plans, it seems that the majority of revenue still comes from voice.  "The moves have helped data revenue increase quickly, but it still is dwarfed by voice charges. Data accounted for 37% of carriers' $169.8 billion in wireless revenue last year, compared with 12% in 2006."  I guess the expectation is that the rise in data revenue won't offset voice declines.  Still, carriers should be focusing on other revenue opportunities beyond voice and data. From ad revenue to e-commerce, carriers are the conduit to the consumer and as a result have a unique opportunity to communicate and promote new ideas.  It may be a cliche, but as one door is closing, it is important for carriers to focus on the new doors that are opening up in front of them in the mobile space.