A famous Oatmeal cartoon showed the cartoonist making a good faith effort to buy Game of Thrones. He finds that the show is not available on iTunes, Netflix, Amazon, or Hulu. He tries to buy HBO Go, but it's only available as an add-on to a cable package. Finally, the cartoonist gives up trying to pay for the show and pirates it through Bit Torrent. This cartoon is probably the best ever expression of the "piracy is a customer service issue" thesis.
In a way, this doesn't make any sense for HBO, which makes its money off subscriptions and would ostensibly welcome an opportunity to sell subscriptions to another market segment. HBO claims that (a) people aren't interested in a la carte HBO Go and (b) the transaction costs are too high to do their own billing, etc. The technical term for these explanations is "bullshit." Cord cutters are a relatively small market segment but a fast growing one and I think it unlikely that cable subscriptions will fully rebound when the recession ends since the issue isn't just price but convenience. Moreover, I see no reason why HBO can't handle billing and other logistical issues when the Metropolitan Opera and the NFL, not to mention Netflix, don't seem to have any trouble running their own separately billed streaming video services. Of course there are transaction costs associated with billing, but it can't possibly be anywhere close to the cost of a basic cable package.
And here we get to the real issue. It's not that HBO would like to cut out the middleman and sell to us directly, rather requiring you to buy basic cable is the whole point. Cable is a total cash cow and a more flexible business model means lower revenues. The reason is that the incumbent business model of cable combines the features of bundling (basic cable) and a two-part tariff (premium cable channels) for a perfect storm of price discrimination. For much the same reason as Disneyland could only lose money if it sold a la carte tickets to Splash Mountain for $20 without requiring $80 park admission (which includes access to Main Street, Jungle Cruise, etc), cable companies would lose money if you could buy HBO Go for $20 without first buying basic cable (which includes access to ESPN, Mtv, etc). Basically, economic theory (and some reasonable assumptions about the structure of demand) suggests that an a la carte video market could not make as much money as a bundled video market.
So, that's why the cable companies don't want you to buy a la carte HBO Go, but why is that HBO's problem? Let's contrast it with the NFL. The NFL offers standalone access because the credible threat of a streaming business model gives them more leverage to negotiate with the MSOs. In contrast, HBO doesn't want leverage because most of its sister companies are part of the basic cable ecosystem. (They used to have an actual MSO as a sister company but they spun off Time Warner Cable in 2009). Time Warner makes a lot of money from HBO subscriptions, but it makes even more money from carriage fees on CNN, Cartoon Network, and most of the cable networks starting with the letter "T." Unlike HBO (which would do well under an a la carte model) most of these other channels rely more on channel-surfing audiences than cult followings and so couldn't sell subscriptions on their own and would have to settle for something like a Hulu Plus or Netflix business model, probably with less money per subscriber and far fewer subscribers than they currently get through basic cable. Basically, cord-cutting would help HBO but devastate the rest of the company. For what is a media conglomerate profited if it gain a few hundred thousand a la carte HBO Go subscriptions, and lose its carriage fees and ad revenue? What can a media conglomerate give in exchange for its Turner and WBTVG divisions?
Time Warner more or less acknowledges in their investor report that disruptive innovation could screw them: "Furthermore, advances in technology or changes in competitors' product and service offerings may require the Company to make additional research and development expenditures or offer products or services in a digital format without charge or at a lower price than offered in other formats." This is on the first page of the "risk factors" section of the report, whereas piracy doesn't come up until the third. This order is consistent with my own reading of the industry and with the history of the recorded music industry, the proximate problem of which is not piracy but digital singles.
So basically, we can call this the "HBO has to take one for the team" model. We can get a similar result with a slightly weaker model which doesn't require long-term corporate cross-subsidization but treats HBO as autonomous from the rest of Time Warner. In the short-term, HBO itself is highly dependent on cable companies. The target market for a la carte HBO Go would be households with broadband but no cable, or about 5% of all US households. This is dwarfed by the 20% of households that have cable but no broadband. Moreover, although 70% of households have both cable and broadband, most of them aren't familiar with streaming video through set-top devices. So as a rough ballpark, let's say that half of US households have cable but either lack broadband and or wouldn't know how to use it with a set-top device (even if they already own a Blu-Ray player or game console with built-in streaming support). This means that the number of households HBO could appeal to with a la carte HBO Go are one tenth as numerous as the households they rely on cable companies to reach. And HBO does rely on the cable companies to reach these households through marketing promotions and the like. If HBO figures that angering the cable companies could cost them even a small fraction of these households then they're better off alienating Matthew Inman and myself rather than angering Comcast. The same logic explains why Netflix is interested in creating a cable channel and recent rumors that Hulu will switch to the HBO Go business model.
Of course for the cable companies to punish HBO would require them to forgo their half of HBO subscription revenue. This sounds like cutting off your nose to spite your face but that's not unheard of, especially if doing so deters your face from pissing you off again by flirting with a disruptive business model. We see a similar dynamic with how theatrical exhibitors react whenever movie studios suggest closing the video release window from its current 17 weeks. (Ironically in this scenario it's the cable companies who are the innovators trying to disrupt the stodgy incumbents). For instance last year, Universal floated the idea of experimenting with tightening up the pay-per-view window for Tower Heist. The theaters were livid and threatened to boycott the test film. This despite the fact that the experiment was on ridiculously unappealing terms to the consumer: $60 to watch a mediocre film three weeks after theatrical premiere and that's only if you live in Atlanta or Portland. Ultimately Universal backed down, deciding it was better to keep their old trading partners happy than try to develop new ones.
(By the way, I'm sure you'll agree it's a total coincidence that Universal was bought by a cable company shortly before the Tower Heist incident. Similarly, a total coincidence that this same cable company has a history of playing hardball with internet companies that offer infrastructure for streaming video services that compete with cable TV).
All that is to say I can understand why HBO Go isn't available yet to cord cutters. Still, let's say that tomorrow HBO starts offering standalone HBO Go subscriptions (as I sincerely hope it does), how would I explain that? I could see this happening if HBO decides that the transition will happen eventually and it is better to do it while they can still do so favorably. We saw a similar dynamic ten years ago with the recorded music industry, which acceded to a low price point digital singles market as it saw its market share eroded by piracy, but only moderately so. In 2003, when the record labels agreed to participate in iTunes, unit sales were down about 15% from the pre-Napster peak, which wasn't fun but also wasn't catastrophic. Most people were still buying CDs when the record labels agreed to a legal digital singles market that would eventually destroy the CD market. They did so in order to transition consumers to a new model before most of us had fully committed to piracy. It's a lot easier to get someone to buy singles for $1 if they're used to buying CDs for $15 than if they're used to pirating singles for nothing. Similarly, as the number of cord-cutters increases this will be an increasingly attractive market for HBO, and not just because it can get these people as customers but because it can keep them from developing the habit of pirating content that isn't promptly made available through legitimate streaming markets. We may not be at that point yet, but I wouldn't be surprised if we reach it before HBO runs out of Fire and Ice novels to adapt.
With a penstroke, President Trump withdrew the U.S. from Trans-Pacific Partnership, imposed a federal hiring freeze, and reinstated the ‘Mexico City policy’ on defunding international abortion-related services.
President Trump marked his first full business day in office with three major executive orders, each one aimed at fulfilling campaign promises he made last year.
His most significant order immediately withdrew the U.S. from the Trans-Pacific Partnership, a multilateral free-trade agreement between the U.S. and eleven other Pacific Rim countries. The pact, aimed at counterbalancing China’s growing economic clout in east Asia, was among the Obama administration’s signature foreign policy achievements and a cornerstone of the pivot to Asia.
But the agreement also drew its share of domestic criticism on both sides of the campaign aisle. Both Democratic nominee Hillary Clinton, who initially supported it, and her primary rival Bernie Sanders criticized the pact for not doing enough to support American workers. Trump was among its most vociferous critics, at one point calling it “a continuing rape of our country.”
Saturday’s unprecedented show of opposition punctured a core myth of the Trump presidency. Will it change his behavior? And can it be sustained?
George W. Bush campaigned as a uniter, not a divider, then presided for eight polarizing years, provoking protests like the one against the Iraq War on February 15, 2003, that sent hundreds of thousands of Americans into the streets of major cities. Those protests stopped neither the Iraq War nor the reelection of the president.
Months after Barack Obama was sworn in, on April 15, 2009, protesters associated with the Tea Party held rallies in 350 cities, attracting more than 300,000 Americans. They were angry about the financial crisis, the Bush administration’s response to it, and the progressive agenda of the polarizing new president and Congress. The following year, 84 Republican freshmen joined the House during the 2010 midterms. By 2012, the Tea Party had fueled victories for politicians including Rand Paul, Mike Lee, Marco Rubio, Ted Cruz, Scott Brown, and Nikki Haley. President Obama’s ability to advance a domestic agenda was all but finished, though he retained enough popularity to be reelected easily in the 2012 campaign.
An ethics watchdog group is suing President Trump over his continued failure to distance himself from his company.
Updated on January 23 at 4:02 p.m. ET
Despite assurances that he would do so before assuming the nation’s highest office, President Donald Trump has still not taken any of the steps he promised in order to mitigate his conflicts of interest. Though Trump has repeatedly stated that he would remove himself from the day-to-day operations of his businesses—a step that, as has been repeatedly noted, would actually do little to resolve his many conflicts—publicly available documents related to his businesses suggest that Trump has not even filed the requisite paper to do so.
Due to the size of the Trump Organization and its many offshoots, the president removing himself from his positions of authority would leave a long paper trail, requiring Trump to file “a long list of documents in Florida, Delaware, and New York,” according to ProPublica. But as of the afternoon of Trump’s inauguration, none of the authorities ProPublica reached for comment on the subject had received the requisite paperwork. Moreover, looking at the publicly available records on Trump’s largest companies, including his namesake organization and foundation, which are based in New York; his Mar-A-Lago Club, golf course, and holding company, which are operated out of Florida; and his recently opened hotel in Washington D.C., revealed that no changes had been made to their purported ownership structures. And though Delaware’s laws regarding limited-liability companies makes information regarding Trump’s many LLCs difficult to attain, ProPublica was able to confirm with state officials that no changes had been made to the ownership structure of Trump’s largest businesses there.
Billy Barr moved to the Rocky Mountains four decades ago, got bored one winter, and decided to keep a notebook that has become the stuff of legend.
It was a year into his life alone in Colorado’s Rocky Mountains when Billy Barr began his recordings. It started as a curiosity, a task to busy his mind during the winter. By no means, Barr told me, having skied down from his cabin to use the nearest phone, did he set out to make a vital database for climate change scientists. “Hell no!” he said. “I didn’t know anything about climate change at the time.”
In 1973 Barr had dropped out of college and made his home an abandoned mining shack at the base of Gothic Mountain, a 12,600-foot stone buttress. The cold winds blew through the shack’s wood slat walls as if they didn’t exist; he shared the bare dirt floor with a skunk and pine marten, his only regular company for much of the year. Barr had moved from the East Coast to the Rocky Mountains precisely because of the solitude, but he couldn’t escape boredom. Especially that first winter. So he measured snow levels, animal tracks, and in spring the first jubilant calls of birds returning. He filled a notebook with these observations; then another notebook. This has continued now for 44 years.
If the president and his aides will tell easily disproven falsehoods about crowd sizes and speeches, what else will they be willing to dissemble about?
One of the many things that is remarkable about the Trump administration is its devotion, even in its first days, to a particular variety of pointless falsehood.
Mendacity among politicians and the spokespeople hired to spin for them runs across eras and aisles, though it is true that some are more honest than others, and Donald Trump was a historically dishonest presidential candidate. But the Trump administration has displayed a commitment to needlessly lying that is confounding to even the most cynical observers of American politics.
The president has reinstated a contentious policy that blocks funding to international family-planning organizations unless they agree not to promote abortion.
On Monday, just days after hundreds of thousands of women marched on Washington, as well as in hundreds of cities around the nation and the world, to call for, among other issues, the protection of women’s reproductive rights, President Donald Trump signed offon the first anti-abortion policy of his term.
It was expected: Almost immediately upon entering office, every new administration since 1984 has repealed or reinstated, according to its party’s position on abortion rights, a rule that prohibits foreign organizations that receive U.S. family-planning funds “from providing counseling or referrals for abortion or advocating for access to abortion services in their country.”
This rule, known as the Mexico City policy, blocks U.S. family-planning assistance to these groups, even if their abortion-related activities—including information, referrals, or services—are conducted with non-U.S. funds. Opponents to the restriction have dubbed it the “Global Gag Rule” because it hinders communication between health-care providers and patients.
How reporters around the world cover leaders hostile to them
Here is a short list of the ways President Donald Trump has attacked the media recently:
The day after his inauguration, he told a crowd of intelligence officers he has “a running war with the media,” whose members he called “the most dishonest human beings on Earth.” He then accused news outlets of lying about the size of his inauguration crowds.
During inauguration week, the Trump International Hotel in Washington banned journalists from the building—Trump’s ownership of which is a controversy in its own right.
After going a record-long span without press conferences, he used his first to berate a CNN reporter, calling him “fake news,” and Buzzfeed News, dismissing it as a “failing pile of garbage” for its release of an unverified dossier containing damaging allegations about Trump.
His transition team said it was considering a plan to evict the media from their traditional roost in the White House press room. “They are the opposition party,” a senior official told Esquire. “I want ‘em out of the building.”
He used one of his first post-election meetings with reporters and editors, held in Trump Tower in November, to insult their “outrageous” and “dishonest” coverage.
Narcissism, disagreeableness, grandiosity—a psychologist investigates how Trump’s extraordinary personality might shape his possible presidency.
In 2006, Donald Trump made plans to purchase the Menie Estate, near Aberdeen, Scotland, aiming to convert the dunes and grassland into a luxury golf resort. He and the estate’s owner, Tom Griffin, sat down to discuss the transaction at the Cock & Bull restaurant. Griffin recalls that Trump was a hard-nosed negotiator, reluctant to give in on even the tiniest details. But, as Michael D’Antonio writes in his recent biography of Trump, Never Enough, Griffin’s most vivid recollection of the evening pertains to the theatrics. It was as if the golden-haired guest sitting across the table were an actor playing a part on the London stage.
“It was Donald Trump playing Donald Trump,” Griffin observed. There was something unreal about it.
The HBO documentary delves into the disturbing 2014 case of two Wisconsin girls who say they stabbed their friend to appease a bogeyman-like figure.
One late spring day in 2014, three girls entered the woods in Waukesha, Wisconsin. Two walked out unharmed. A 911 call made not long after revealed the hazy outline of a vicious attack—one of the girls had been found by the side of the road covered in blood, having crawled there to get help. In the days and weeks that followed, details emerged that were no less disturbing: The three girls, all 12 years old, were best friends. The victim had been stabbed 19 times with a 5-inch blade and had barely survived. After being taken into police custody, the other two girls told interrogators what had happened: They had lured their friend into the woods to kill her so that they could appease someone called Slenderman.