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HBO, penniless on YouTube

Hbo_logo_2 HBO's announcement Monday that it was putting full-length episodes of "In Treatment" onto a new YouTube channel made me wonder why there were no ads on the network's YouTube pages. I can see why HBO might not want to throw pre-rolls and interstitials into the videos themselves, given that the programs air on TV without commercials (except those for other HBO programs). But what about all that real estate around the video window?

"We're not looking to monetize our content on YouTube right now," said Joseph Giraldi, HBO's director of digital distribution and partnerships. The point, he added, is to "encourage sampling of our content" and "connect with a new audience of fans."

I'm just guessing, but I suspect that well over 90% of YouTube's U.S. audience also has cable or satellite TV. So it probably makes sense for HBO to view YouTube as another way to acquire customers. It's kind of like offering a free weekend of HBO, except that the weekend never ends. Still, I'd also bet that there's a sizable number of people who'd like a bit of HBO programming -- say, "The Wire" or "Entourage" -- but don't want to pay for everything else that comes with it. For these folks, an advertiser-supported site with full-length episodes would be ideal.

Don't expect HBO to make that offer that anytime soon. The main reason, as corporate affairs v.p. Jeff Cusson puts it, is that HBO isn't like a TV network, really. It makes its living selling a package of entertainment to consumers for a monthly fee, not peddling individual shows to advertisers. And like a movie studio, it sells its content through a series of windows -- first on HBO, then on DVD, then in syndication. Adding an ad-supported option would not only require a different set of skills, it could undermine HBO's proven revenue streams.

Of course, the same concern about cannibalization held back the major record companies' efforts online, and look where it got them. Even the TV networks have come to see the online audience as incremental to their broadcast TV viewership, and that's likely to be true at least until the average person is browsing the Web on a big screen in his or her living room. HBO's attitude about advertising also reflects a view that it's necessarily intrusive and unwelcome. That's been true of broadcast and cable TV commercials, which subject viewers indiscriminately to pitches for trucks, loans and beer, but it doesn't have to be the case online. Ads can be kept separate from the video stream and targeted to viewers' preferences, so they don't seem distracting or irrelevant. HBO's online efforts are focused on the big money generated by adding or keeping subscribers, but it's missing the opportunity to experiment with an emerging business model online.

Regardless, one nice thing about the YouTube channel is that it lets people embed HBO clips on their own sites, turning fans into marketers. Allow me to spread the love for Bret and Jemaine:

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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