Extension

HBO subscribers can now view HBO content via broadband, including the archives (Yes, that includes the Sopranos). But only subscribers can sign up.

This is a smart and natural extension of the HBO brand, and should be the model for other premium services.

I’m not surprised that Showtime is not renewing its licensing deal with Netflix for legacy content- they feel it cannibalizes their other revenue streams.

But at some point your legacy content will have outlived its shelf life, and Netflix will be the last available revenue stream. Everyone who wants to own “The Larry Sanders Show” or “Band of Brothers” on DVD probably already has it.

The good news for content creators is that there is revenue all through the long tail. The hard part is finding the right delivery platform for each package, and pricing it fairly for all involved.

Peter

2 Comments

  1. O.
    Commented on 26/3/2011

    By keeping it subscriber-only, seems like they miss out on revenue from viewers who might purchase a la carte, who don't want to be tied to a crazy bill (basic package + HBO). The people that Showtime is getting now are not likely to follow Showtime into their walled garden. Netflix has a distribution model that's tough to beat, and tough to even replicate. I doubt Showtime or HBO have the chops to follow the Netflix act.

  2. Commented on 26/3/2011

    I disagree. My household signed up to Showtime for a couple of years after seeing the first season of Dexter replayed on CBS during the writers strike. Use your legacy content to attract buyers for your premium content.

    Netflix and premium cable channels have different models. HBO has become a powerhouse through its original content- the Netflix advantage is in aggregating broad, often legacy content you couldn't find at Blockbuster, like a deep library of foreign films or documentaries.

    But HBO and Showtime benefit from Netflix buy using them as a small revenue stream for old content that no longer attracts subscribers, and as an easy mechanism to entice potential customers into their walled gardens.

    Each benefit from the other.

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