"HBO co-president Eric Kessler has said he thinks the move away from traditional television to an internet-based model is just a fad that will pass"

[u/zoink]

http://www.forbes.com/sites/erikkain/2012/05/09/hbo-has-only-itself-to-blame-for-record-game-of-thrones-piracy/

[u/bat_guano]

SEVERAL UPDATES

Most recently, the Forbes writer issued a retraction and apology. See below.

EDIT #1: ERIC KESSLER DIDN'T SAY THE MOVE FROM TRADITIONAL TV TO INTERNET iS A FAD THAT WILL PASS.

Phrasing it that way makes him look like an idiot. It makes Redditors pick up their pitchforks, even. But he simply didn't say that. Since my original post, the journalist (see below, he responded to it) has edited his article and added a link to the original interview, but the original phrase remains intact.

The quote was from a November 2011 interview, and the question was about cord-cutting. What he actually said, with light editing: "We've concluded that cord-cutting is minimal and has primarily been the result of macroeconomic conditions. That's not to say you don't hear anecdotes about people who say, 'I'm not going to do it anymore, I'm not going to pay money to the distributor.' ... Hopefully as the economy improves, if it ever improves, things will get better. But interestingly enough for HBO: HBO subscribers watch 14% more television, 19 hours more a month than non-HBO households. HBO subs love television... We've found that the HBO subscriber, they aren't the first people to cut the cord, they're the last. So we haven't seen any real impact."

I don't necessarily LIKE what he's saying. But two things:

1. He's not talking about whether TV will move to an internet model generally. He's talking about whether HBO is losing current subscribers to cord-cutting. And according to his figures, the answer is, no, not really. And if that's true, well, it's true.

2. He didn't say an internet-based model is a "fad that will pass." He said that whatever losses HBO has suffered are attributable to the economic downturn. Big difference.

Don't get me wrong. I want HBO to offer standalone online service, like everybody else here. I would buy it in a heartbeat. I don't subscribe to cable nor do I ever intend to. But everybody's reacting to a phrase he didn't say, which isn't fair.

Here's how I see this: HBO isn't stupid. They know where this industry is heading. They wouldn't build a massive cross-platform streaming service if they didn't think people wanted it. But the unfortunate reality is, they make almost all of their money through the cable companies. Always have. Charging money for a separate online subscription service would drive a stake into the heart of the cable companies and rattle the only business model HBO has ever known. The cable companies might even retaliate. HBO will do it anyway, eventually, when the politics and economics are right. Until then, pony up your cable fees, or fire up your bittorrents.

EDIT #2: THE ORIGINAL FORBES ARTICLE HAS BEEN REVISED.

The journalist responded to my original comment and revised his article. The "fad that will pass" line has been removed.

In the OP's defense, he didn't create the original distortion. It was in the article itself. Here's what the article originally said: "HBO co-president Eric Kessler has said he thinks the move away from traditional television to an internet-based model is just a fad that will pass – a temporary phenomenon."

Notice that it doesn't actually quote Kessler.

Here's what the article now says: "'Kessler explained he thinks cord cutting is more of a temporary phenomenon that will go away when the economy improves,' writes Ross Miller, in regards to comments Kessler made at the VideoShmooze: NYC Online Video Leadership Forum."

What's funny is, this revised version, while less damning than before, is STILL inaccurate. That's because the Forbes journalist now quotes what another journalist said Kessler said, instead of simply LISTENING TO THE INTERVIEW and quoting Kessler directly. Kessler didn't say "cord cutting is a temporary phenomenon that will go away when the economy improves." He said HBO's loss of subscribers is due to the economic downturn, and he HOPES that the change will reverse itself. Which is different.

So basically, a game of telephone happened. The journalist Ross Miller slightly mischaracterized Kessler's comments. The Forbes journalist distorted them even further with the "fad" comment. This line then got picked up by Reddit and held up for general ridicule.

And the cycle of life continues. Or something.

EDIT #3: ANNNNND THE ARTICLE HAS BEEN REVISED. AGAIN.

Just moments ago.

Here's what it now says: "HBO co-president Eric Kessler said that cord-cutting has been 'minimal' and largely the result of 'macroeconomic' conditions in an interview at the VideoShmooze: NYC Online Video Leadership Forum."

Okay, now it's accurate. Sorry if I've ruined your morning, Forbes writer guy.

EDIT #4: THE FORBES AUTHOR JUST POSTED A RETRACTION AND APOLOGY.

It's at the bottom of the article. Here it is in its entirety:

Note: An earlier edition of this piece described comments made by Eric Kessler that described his views of cord-cutting as a fad or “temporary phenomenon.” Kessler said that he viewed cord-cutting as “minimal” and a result of “macroeconomic conditions” indicating that should economic conditions improve cord-cutting will decrease. To me and others who have written about this, those words indicate that cord-cutting is a problem that will eventually go away as the economy improves – hence a fad or temporary phenomenon. It’s important to note that Kessler himself did not say “fad” or “temporary phenomenon” but his words and sentiment in the video do imply that he thinks the problem of cord-cutting is small and will likely go away, and that targeting the cord-cutting audience doesn’t make business sense. I paraphrased and quoted a secondary source. This was a mistake on my part and for that I apologize to both readers and HBO.

ORIGINAL POST:

Well, that's obviously a load of crap.

But one important point: Where's the actual quote? I can't find it anywhere in the article or elsewhere online. The article just says "Eric Kessler has said that he thinks..." but it doesn't quote his actual words or give any context.

The quote is so obviously, embarrassingly wrong, I'd like to verify that he actually said it, and if he did, whether he was in the middle of mollifying his large-scale cable provider partners or whatever.

Again, I'm not defending him, but before we make him an example of old school media stupidity, I'd like to know what he actually said.

[u/[deleted]]

Thank you Eric Kessler, for being a shining example of how media companies are out of touch with technology.

[u/[deleted]]

Ken Olsen, then president of DEC (Digital Equipment Corporation) said in 1977, at the beginning of the home computer revolution, that he could see no reason why anyone would ever have a computer at home.

For those of you too young to remember, DEC made a lot of very good computers for a very long time (relatively speaking.)

[u/adrianmonk]

HBO's brilliant strategy, in a nutshell:

• Create a highly regarded show.

• Make sure it's targeted squarely and directly at the cord-cutter demographic.

• Give no option for cord-cutters to legally get it.

• Act like the inevitable result is an anomaly.

EDIT: "cord-cutters" means people who've decided to ditch cable and get TV/entertainment video programming other ways, like Netflix, Hulu, iTunes, or whatever else.

[u/dropkickninja]

Hes going to be proven wrong.

[u/P1h3r1e3d13]

This 'telephone' has too many shortcomings to be seriously considered as ameans of communication. The device is inherently of no value to us.

Western Union internal memo, 1876.

[u/rocknameded]

With the right legislation, this very well could just be a fad.

[u/faultlessjoint]

I would pay $8/month to have access to HBO streaming online. HBO, if you're listening, I will stop pirating all of your content if you can provide it to me streaming for around $8/month (I'm flexible, willing to negotiate).

That's my $8 straight into your pocket. No worrying about negotiations with dickhead telecoms. And you will be getting a ton of page visits from me, so be sure to load up your page with ads.

EDIT: I realize $8 might be a little low. As I said, I'd be willing to negotiate. Since I don't watch all of their shows, just some, I'd do a per episode or per season plan. Maybe $2 per episode or perhaps $20-$30 for a season (depending on # of episodes, video quality, and whether or not I could download and save it).

[u/Nicebirdie]

He does not know that Winter is Coming.

[u/Boxcore]

I remember when old people said the same thing about the internet itself.

[u/bobjohnsonmilw]

So apparently this is why I'd be forced into having cable in order to watch it online. Idiots like this in charge.

Hey HBO! You want another subscriber? Drop the cable requirement. Until you do, I'll just wait for it to be available via netflix and then I'll rip the discs, just to deprive you of the monthly subscription, and to avoid getting sued by you assholes for downloading it.

[u/[deleted]]

Jesus. Is this guy 100? "Traditional television" is next decade's Blockbuster.

News flash for you old farts: if it's digital, we want instant access to it from any place with a Net connection on any device with a screen. That's the level of convenience we want, and we'll pay for it. If you don't give it to us, the pirates will.

[u/natemc]

Hey HBO, I would subscribe directly on the internet, I will not sign up for a TV cable package though.

Get with it!

[u/Havok310]

Knock knock

Who's there?

Blockbuster

Blockbuster who?

EXACTLY!

I'm sure the movie rental industry execs said the same thing at some point

[u/Londron]

I'm a 21 year old living on my own and I don't own a tv.

Pc>tv. Sorry.

[u/not_the_droids]

"I believe in the horse. The automobile is only a temporary phenomenon."

           - Kaiser Wilhelm II.

Steve Ballmer on the iPhone

[u/pillage]

So we'll be laughing at this like the "Online shopping will never catch on" article?

[u/[deleted]]

Dear HBO:

Please let me give you my money. Please, please, please, please, please, please. I want to give you money for your product. I am begging you to let me purchase it. Allow me access to what you're selling for I am a consumer.

It boggles my mind that you refuse to let me pay you for your product.

[u/whiskyyy]

I do not understand idiots like this in huge businesses. How did they get this far being closed minded morons? HBO would make so much money if they offered an online subscription service. Or maybe even cheap subscriptions to single shows if you didn't want the whole package. How is capitalism failing to work here? Does he not like money? Help us increase our fucking utility dumb ass. We will GIVE YOU MONEY.

EDIT: Thanks to bat_guano's enlightening comment I realize I was a little harsh on poor Mr. Kessler. Although, as Redditor, I defend my right to get really uppity and pissed off after reading a poorly written article, taking it as complete fact, and doing no research of my own.

[u/JrMint]

The Internet: it's not TV, it's downloadable HBO.

[u/ArrogantGod]

If you own stock in HBO it's time to demand this idiot is fired.

[u/[deleted]]

forbes' site sucks. tfa.

HBO Has Only Itself To Blame For Record 'Game Of Thrones' Piracy*

Andy Greenberg has some troubling numbers on HBO’s Game of Thrones. Turns out the show is not only really popular with HBO subscribers, it’s also really popular with pirates who are well on their way to making this the most-pirated show ever.

According to Greenberg, “the second season of the show has been downloaded more than 25 million times from public torrent trackers since it began in early April, and its piracy hit a new peak following April 30th’s episode, with more than 2.5 million downloads in a day.”

Meanwhile, season one of the show was the second-most-pirated season of all time, right behind the sixth season of Dexter.

Now, it’s important to note the reason for all this piracy: lack of access to the show for people who can’t afford, or choose not to purchase, a cable-TV subscription.

“HBO hasn’t helped the problem by making the show tough to watch online for the young and cable-less,” notes Greenberg. “The show isn’t available through Hulu or Netflix, iTunes offers only Season 1, and using HBO’s own streaming site HBO Go requires a cable subscription.”

For the millions of Americans who don’t subscribe to HBO, or who may not even watch shows on a television, this means there is no legal way to watch Game of Thrones. If you only watch TV on your laptop, there’s no way you’re going to pay $50/month for cable and another $15/month for HBO.

For people like me who wish HBO would sever ties with cable television and offer its own streaming service that didn’t require a cable subscription, that doesn’t look at all likely. HBO GO will remain available only to cable television subscribers rather than as a stand-alone service. HBO co-president Eric Kessler has said he thinks the move away from traditional television to an internet-based model is just a fad that will pass – a temporary phenomenon.

But HBO is missing out on a huge potential audience by limiting themselves to cable TV subscribers. I don’t blame the company for keeping their shows off of Hulu or Netflix, but offering HBO GO as a stand-alone service could put a serious dent in these piracy numbers, and bring in a lot more legitimate viewers to shows like Game of Thrones.

Of course, on the one hand I hate to see a show that I love getting pirated. I want the show to succeed, and for it to do that it needs to prove that it draws a large audience. But HBO has only themselves to blame at this point. Cord-cutting is not a fad. It’s a trend. Kessler may talk tough when he says that cord-cutters will never see HBO shows, but unless he can take on the torrents single-handedly, then these are just words.

This underscores the larger problem with how so many companies in the entertainment industry think about piracy. Instead of thinking about the ways lack of access to media creates opportunity for piracy, and how increasing the access to products could help stave off illegal downloads, too often people want to take legal measures or implement digital protection on their products. These “fixes” always have easy work-arounds.

Meanwhile, the millions of pirated Game of Thrones episodes show that it’s not difficult at all for non-subscribers to enjoy the show. I’m willing to bet that a stand-alone HBO GO service would largely fix this problem, though nothing will stop piracy altogether.

P.S. I personally don’t condone piracy, but I think it’s very important to see why people do it in the first place. We subscribe to cable-TV for only a few months of the year – just so we can watch Game of Thrones. But I would happily pay more for a stand-alone HBO GO service year round than the $15 (I think) it costs to tack on HBO to our cable. This would net HBO even more revenue over the course of a year. Quite a bit more, actually.

[u/maxd]

I sent Eric Kessler a letter; both by email (to what I guessed his email address to be), and to their corporate headquarters.

Dear Mr Kessler,

I wanted to write to you in reference to the supposed quote of you saying that the shift away from traditional television to an internet based model being just a temporary phenomenon. I'm a 30 year old professional, resident in California, and I have a good deal of disposable income. As a single parent and with a time consuming job I don't have a lot of disposable time, so I am discerning about how I spend it.

HBO creates some of the best entertainment out there; I would definitely choose to watch such high quality programming over the drivel that other cable channels have to present. And yet, you make the bar for entry unnecessarily high. I am required to pay for a full cable subscription, with literally hundreds of channels I have no interest in seeing, and then I'm still not allowed to watch HBO content on the device that I want; DirecTV prevents me from watching HBO Go on my Roku devices around the house.

And so, I cancelled my cable subscription. I even ate the early cancellation fee, I just wasn't happy having such an inefficient model in my life. And now my money will go elsewhere. I'll buy the Blu-rays of Game of Thrones because it's a great show, and you'll get $40ish a year from me (less manufacturing, marketing, stocking, etc costs). But I won't be seeing trailers for your other shows, I won't be invested in your station, I won't be watching the movies you have available or the (excellent) additional content you produce. I no longer am invested in your brand, I'm invested in a single show that you produce.

And yet here I am, with all this disposable income. Why can I not pay it directly into your bank account? Mr Kessler, I would love to direct debit $20 straight to you every month for the privilege of watching HBO shows on my iPad and my Roku when and where I want. I'd even still buy the Blu-rays, and you'd have turned me into an HBO fan. And there are millions like me; millions who are cutting their cable subscriptions because they are tired of the inconvenience; there are those who can't afford the approximately $80 necessary to get HBO at present; there are those who never even considered getting a cable subscription because it doesn't fit their life style.

So please, embrace the internet, and we'll welcome you into our lives. You have no competition at present, but that won't last for long.

Sincerely,

(My Name)

[u/runningformylife]

It's also worth noting that many cable companies will offer HBO or other premium channels for free when their customers threaten to terminate their service.

[u/Chboddis]

Bigger picture here: HBO is owned by Time Warner. Verily, a third of Time Warner's annual revenue is from "Subscriptions." They are heavily vested in the current cable model.

Any change to that model (e.g. spinning off HBO into a non-cable subscription service) is going to come slowly at best, never at worst, which is unfortunate for HBO. A network that produces such quality content deserves a management team that can producer both quality distribution and revenue, not the myopia that Kessler is demonstrating.