When HBO and Netflix Don't Play Nice, You Pay

When I read about HBO's disinterest in streaming movies it has rights to via Netflix's online movie service, my first thought wasn't "Isn't that gutsy of HBO?" Instead, it was, "Media companies are going to nickel and dime consumers to death."

HBO's stance seems almost in retaliation for Netflix's decision to pay $900 million to the coming pay cable channel Epix last week to gain online rights for the next five years for movies produced by Paramount, Lions Gate and MGM. (HBO has cable and online rights to movies from Warner Bros., Twentieth Century Fox and Universal; Netflix also has rights to movies from Disney and Sony.) HBO's plan is to make its cross-platform HBO Go service available to all of its 29 million subscribers within the next six months or so at no additional cost!

Aw, gee. How nice of HBO! But suppose that you subscribe to HBO because you're an avid fan of True Blood -- but that, when you peruse Netflix's online movie content, you see more movies you'd actually want to watch. What to do? Then suppose you really feel the need for Hulu Plus so you can watch the full season of Fox's Glee anytime you want, and then there are those new iPad apps for GQ and Vanity Fair you've been thinking about buying -- and that great new gaming service that you have to pay for because net neutrality is dead.

Then there's the stuff you already pay for to get content, the wireless connection, the cable bill, and so forth ... the mind boggles, and not in a good way. Suddenly, it's easy to see the gory details behind Veronis Suhler Stevenson's prediction that media's growth will outpace the gross domestic product over the next five years. It's because of the charges constantly showing up on your credit card -- $9.99 here and $14.99 there begins to add up.

Of course, as I've said before, tiered media is more the rule than the exception, but at some point you have to wonder whether, over the long term, it's smart for content providers to each, independently, try for their slice of the subscription pie. Not only is it uncertain that consumers can carry the economic load, it also might shave the content business into so many different pieces that these subscription plans won't be the cash cows they are supposed to be. And that's not so good for consumers, or content providers, who need subscribers to develop more content.