Monday, July 16, 2007

Eight Years Later and I Can’t Buy Entourage over the Internet

On the 8th anniversary of the IPO, I can’t help but wondering, what is HBO thinking about? You can’t even buy a four pack of Entourage episodes on iTunes for $8.00. I believe the $1.99 pricing would work out for HBO, it just needs to price stuff where if you subscribe to more than 2 things, it’d be a better deal just subscribing to HBO. I know, HBO like all the Time Warner schmoes on the music business side that came before it are worried about cannibalization. But there are a few ways around worrying about cannibalizing the HBO subscription service and the DVDs. Update: 7:35am, according to Cuban, it's the 9th anniversary of the IPO and the 8th anniversary of closing the deal, a special day for Mr. Cuban no matter how you look at it!

Does HBO think in 10 years the fate of the DVD is going to be any better than the CD? The DVDs purpose in life at that point will be very cheap media you can cram a lot of stuff on. Otherwise most people will be buying their content digitally already. And since that’s the way content will be sold anyway, why not get in ahead of the curve for a change? Otherwise you just encourage the countless sites up and available on the Internet aimed at providing immediate (and free) access to Entourage, the Sopranos, John in Cincinnati. I can understand not wanting to deal with Apple and although I think it’s dumb to fight that trend, I think Time Warner has a chance to sell its HBO content via its AOL arm. None of that synergy stuff seems to be playing out and it rankles me.

You don’t even have to do this in a way that cannibalizes the mothership or the DVDs. First, make it something that would be high quality on the iPod or iPhone but not so great on the TV. Or make the video high quality anyway – it’s not like iTunes includes any of the director’s or actor’s commentary tracks. There will still be a reason to buy the DVDs until all the content providers have thrown in the towel and realize digital distribution is going to win and they have to even include the good stuff digitally. For now though, that is a ways off.

I don’t know if there’s a penalty for HBO and others not being first movers here. It seems like the penalty is that people who might otherwise buy it wind up stealing it because it’s the fastest way to go. I have to be honest, I pay for HBO and various DVRs and record Entourage. I still find downloading the free torrent is faster than converting the huge file on my DVR into a format for my iPhone (mp4 or m4v) So, I’d already be willing to pay HBO or Comcast a small extra fee for access to “optimized for iPhone/iPod” files of shows I have already paid for in high definition.

The question for me is does HBO think about this at all and decide it’s not right for them or are they just not even thinking about it? A real decision not to do it I couldn’t find fault with, but if HBO isn’t even thinking about it, that’s another story.

I understand as well that the various producers of content may have different deals in terms of digital distribution and I think HBO not necessarily owning those rights right now isn’t a big deal if that’s the case. But I think such things will be a fairly huge deal in the 5-10 year time range.

Some have suggested via the comments under Cuban’s blog entry that perhaps Cubes has II up his sleeves. I hope so, but I think his focus is on owning sports franchises now and judging from the content I can download via, Cuban has become a content owner now and doesn’t want to cannibalize his content either. The only thing available for streaming/download from is 2 hours of Dan Rather content that is decidedly NOT in high definition. It’s good enough to look at and watch, but if my whole brand was based on high definition, I don’t know if I’d release much lower than HD quality content to the internet, even in consideration of bandwidth constraints. The file wasn’t so big that even doubling the file size and breaking it up into 2 pieces would’ve curtailed my desire to download it. My only point with this is that unless Cuban is deliberately trying to look “backwards compatible” with what’s available on HD.Net, he’s not looking to do “Broadcast II, and this time we mean it!”

The latest Dan Rather episode (from July 10th) is available for streaming via the Google Video player, and the production value isn’t nearly as good as some shorter stuff, like “Will it Blend: iPhone" via YouTube.

Another Update: 7:40a: In the credit where credit is due, much as this pains me, credit goes to Major League Baseball (MLB!). For $4.99 via iTunes I was able to buy all the coverage of the All Star Week festivities here in San Francisco (the rookie game, celebrity softball game, the Home Run Derby and the All Star Game itself). I thought it was a good value so I downloaded it. I was disappointed (come on, you knew I would be disappointed with something!)it was in 4:3 format instead of 16:9 widescreen, but it's optimized for the iPod, not my big screen. Still a good value for $4.99

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