HBO’s HBO Now service is the true beginning of the end for cable TV service. The only non-satellite TV service available where I live is Comcast. The basic package is $49.99 a month (not utilizing one of their bundle deals, more on that later) and it provides 140 channels. If their website lists what those 140 channels are, I cannot find them. This is indicative of how all of the TV services run their business. Time Warner, Brighthouse, and Cox all do it the same way. There is a huge chunk of TV stations that I’m paying for that I’m not interested in ever watching.
The math on this is a bit tricky. HBO Now is about $15 a month, for a single “channel” that I definitely will watch. If I added in three more channels at the same price point, I’d be paying more money than I would had I gone with Comcast’s basic TV offering. However, HBO Now is more than just a channel, it’s a video-on-demand service that offers a lot of really good movies to watch in addition to Game of Thrones (the exclusive reason that we’re currently paying for it) and it’s contract free.
But the math does work, in this circumstance, very much in the favor of HBO. I can say this with certainty, despite not knowing the contractual deals between Comcast and HBO. If I want HBO added to my Comcast service, it’s $10 a month. Because I signed up for the service through iTunes, Apple is taking a cut, let’s say 30%. That means that HBO is getting $10.50, more than what they’d be getting from Comcast even if Comcast hadn’t taken a dime of the money I’d have been paying them.
This is a video-on-demand service, not really a “channel”, so it’s not quite an apples to oranges comparison. Imagine though that a company like AMC offered $4 a month for all of their shows in the last month as VOD. That’s got to be more than what the cable companies are giving them as the share of my service fees and ad revenue per capita. Then if I wanted to be able to check out their back catalog or a certain show that I had missed some episodes, I could do that ala carte. AMC would, of course, have to make sure they had a subscriber base that would exceed their current one if they were going advertisement free, which is what I would expect if I was a paid subscriber.
I don’t like the cable companies. However, if none of these predictions come true, it really doesn’t matter too much to me, because I don’t spend too much time parked in front of the television. But the shows I like, I want them, and I’d prefer to have them sold to me at a reasonable rate.
EDIT: A reader brought it to my attention that premium services usually have a whopping 50% cut taken from them by the cable providers.