The Atlantic Report: HBO Go-It-Alone: There Goes the Cable Bundle?

Good news for cord-cutters this week:  HBO announced a platform allowing cable non-subscribers access to the channel.

HBO CEO Richard Plepler announced today that the company will launch a "stand-alone, over-the-top HBO service in the United States" in 2015. That means that you will soon be able to add HBO to the list of television you buy without a cable subscription, including Netflix, Hulu Plus, Amazon Prime, and NBA League Pass.

Derek Thompson makes a prediction:

It seems that the audience most likely to pick up an HBO "Go-It-Alone" product today are mostly the young, lower-income Internet-savvy viewers who weren't cable customers, anyway. That suggests that HBO Go-It-Alone will restrain cable's growth by preventing new sign-ups, rather than hurt cable by creating more cord-cutters.

That implies that HBO drives cable subscriptions, which I doubt.

Thompson also points out that this is the first year that cable actually lost subscribers, 166,000 and that many more have dropped to basic cable.

It seems clear to me as a consumer that the cable model doesn't work anymore. At least, it can't stay around much longer. The prices have gotten so high--and the "new normal" so anti-luxury--that customers have to examine what exactly they are buying.

But most media companies are in a tough spot with the new paradigm. HBO has a brand. Sony Pictures, for example doesn't. The broadcast networks own only a portion of their programs. Production companies are in the business of selling their rights. The number of media brands--that own their content--is slim, and these are the only type of companies that can interface with the public.

This is the business structure I prefer, I must say. It leaves room for third parties like Netflix to form. Netflix's business is making deals with the content owners for distribution.

However, I don't have a lot of faith for the other part of Netflix's strategy, the one it shares with HBO:  branding itself as a content producer. House of Cards, which I like, gets a lot of eyes on it because Netflix is so huge, but I can't imagine someone signing up just to watch it.

HBO's stature as a producer is big, but its weak spot is, "What have you done for me lately?" The Sopranos was the company's watershed moment and Game of Thrones is a phenomenon, but the rest of their line-up has been buzzworthy shows like Girls and Silicon Valley and failed attempts to buzzworthiness like John from Cincinnati. For all their hype, the back catalog is much shallower than one is led to believe; of those critical favorites not yet mentioned, only Oz and The Larry Sanders Show, had an extended--and complete--run. Otherwise, who's nostalgic for Dream On or The Hitchhiker?

The next step of the media game is to choose either narrowness or broadness. A behemoth like Netflix functions by having something for everyone. A competitor on that scale would have to come into the market with a pile of cash. The alternative is to go deep--where is the Netflix equivalent for indie films? Film history? Cult classics?