If Netflix Wants To Rent Out HBO DVDs, It Will Have To Get Them Elsewhere

The war of words between HBO and Netflix may have just escalated into an actual slap-fight, with HBO announcing that it will no longer be selling DVDs of its shows to the rent-by-mail company.

Of course, this doesn’t stop Netflix from buying HBO DVDs. It would just have to buy them through a third party. Depending on their deal with the broadcaster, this could mean a significant uptick in the cost of the HBO discs to Netflix. But given the shrinking market for DVD-only customers and Netflix’s growing focus on streaming content, it wouldn’t be a shock to see HBO titles gradually disappear.

HBO has repeatedly stated that it has no intention of ever letting Netflix stream the cable channel’s content to customers. So this move is another sign that the network thinks even less of those long red envelopes.

On the wishful-thinking side, we’re hoping that this bit of bridge-burning by HBO is a sign that the cable company is moving toward a version of its HBO GO streaming service that is not reliant on being a subscriber to the channel through your cable provider. It’s a move that many insiders have predicted will happen in the not-that-distant future, and one that could permanently change the pay-TV landscape.

PREVIOUSLY:
Netflix One-Ups HBO By Snagging DreamWorks Deal
HBO Go To Expand To Video Game Consoles, Web-Connected TVs
HBO Shows Too Good For Streaming On Netflix

Comments

Edit Your Comment

  1. Eremis77 says:

    Until HBO offers their own streaming service or works with someone else to get rid of that stupid requirement that you have cable AND HBO before you can stream, they will not see a penny of my money, DVD or otherwise.

    • Happy Tinfoil Cat says:

      What HBO considers to be a wise business move is just the kind of thing that sometimes is the omen of death for a company that tries to force the world into its marketing plan.

      • little stripes says:

        “for a company that tries to force the world into its marketing plan.”

        Except people WANT online streaming, and what is essentially ala-carte. If they offer HBO GO online for people who aren’t paying for their cable TV services, it’s giving customers what they want: More online streaming options. I don’t see this as a negative thing at all.

        That said, if they don’t do the above, then I agree with you.

        • rugman11 says:

          Except, as I mentioned above, HBO’s model is based on subscribers, and they don’t have the infrastructure to offer their product to TVs sans cable. The reason they don’t offer HBO GO to anybody is because the cable companies won’t allow it. The cable companies, in this case, know that allowing customers to access HBO GO without cable will cost them customers.

          • little stripes says:

            They have the bucks and manpower to change that, though.

            • rugman11 says:

              You’re talking about a several billion dollar investment in order to get maybe a million or two people to pay $10-$15 for content they aren’t getting now. That seems like an unwise business decision.

              • dwtomek says:

                Not that it entirely negates your points, but you seem to be operating on the idea that HBO receives 100% of the subscription costs paid to cable providers. I find that assumption to be dubious at best.

    • Bionic Data Drop says:

      Agreed. If HBO offered their shows and original movies on a stand alone streaming service I would wave bye bye to Netflix and cable. Their shows and movies are among the best ever made.

    • dohtem says:

      +1

      It makes no sense. I have long argued that if I could get only HBO from Comcast at a decent price, I would do it. No CNN, ESPN, MTV or the rest of the basic cable filler. Just the HBO family in HD. No go. So I canceled cable.

      Ok, how about a paid streaming solution similar to Netflix or Hulu+ (both of which I pay for and I’m happy with). All HBO’s shows, current and past. No way to do that either.

      We are pretty much waving cash at them and they are saying no.

      • rugman11 says:

        Actually, it’s their contracts with cable providers that are causing the problems. If I’m Comcast or any other cable company, the only reason I offer HBO is to get more customers for my cable product. Why on Earth would I offer HBO to my customers if they can subscribe to it separately? HBO doesn’t have the infrastructure to offer its channels without the cable companies and offering HBO GO without requiring an HBO/cable subscription would result in every cable company dumping them simultaneously, costing them millions of subscribers. If you’re waiting for HBO sans cable, you’ll be waiting a long time.

        • Republicrat says:

          Does their contracts prevent HBO from offering a similar but different channel for streaming subscribers? The cable co’s can’t keep them hostage forever.

          I don’t buy the idea that HBO doesn’t have any options here.

          • rugman11 says:

            But how would they offer that channel? Television channels don’t just spawn from the ether. At this point, you either provide your content over the air (which HBO can’t do) or you contract with a cable company to provide your content to subscribers. Unless HBO wants to lay hundreds of millions of dollars of cable to provide their channels directly to customers then they’ll be stuck working with cable companies.

            • kujospam says:

              They would partner with Hulu and have a hulu plus Premium. Where you can pay extra to add HBO content to that channel. Most quality tvs and blueray players out there support hulu plus. I too would pay 10 to 15 dollars a month to watch their stuff, instead I just go to a friends house with 4-6 friends. I would kind of miss the small video parties though.

              • rugman11 says:

                There are a couple of problems with that scenario. First, broadband does not have the penetration level that cable television has. There are approximately 58 million homes with cable in this country and only 46 million with broadband, so HBO would have cut its potential user base by 20%.

                Secondly, HBO currently has 28 million subscribers through cable. If they were to go through Hulu, it’s basically guaranteed that they would lose all of their cable connections. So you’re asking them to dump a guaranteed 28 million subscribers for how many online subscribers? We don’t really know. Hulu Plus currently has fewer than 1 million subscribers. Netflix has about 20 million, but given the fracas over raising their price 6 dollars, I doubt they could mandate an HBO addition and add the cost to the price without losing a ton of subscribers. So, you’re probably looking at (at most) 10-15 million people who would subscribe to HBO GO at $10-$15 which, of course, means that HBO would have to cut much of their programming or double or triple their prices. That would lead to more people canceling and a further increase in price, etc.

                Lastly, how much would you really save? Instead of paying $30 for basic cable, $40 for broadband and $15 for HBO, now you’re paying $40 for broadbrand, $10 for Hulu, and probably $30 for HBO GO. Congratulations, you’ve saved yourself $5 and cost millions of people the ability to watch HBO through their cable system.

                • deniseb says:

                  Nope. I cancelled my cable tv. I am now paying $35 for broadband which I was paying anyway, and $17 for Netflix which I was also paying anyway. I would pay gladly $15 for HBO by itself, but I’m not paying $65 for Comcast which I don’t want on top of that.

        • Loias supports harsher punishments against corporations says:

          And those contracts have never, and will never, expire, right?

          • Jawaka says:

            Until they feel that they can make more money selling their services directly to the public than they can by selling it to cable companies I don’t see them pissing off the cable companies.

        • bigTrue says:

          and this right here is why myself and thousands of others have been without cable for years and still get whatever shows they want, in HD, with Bit Torrent.

          My roomies and I split a 60 dollar a month, 12 mg d/l speed connection with a local cable company that has never gone down in the 12 months we’ve had it (if you’re in Wide Open West’s area of coverage, I highly recommend them), use Peer Blocker (not perfect, but I’ve never gotten one of those pesky letter in 4 years of regular torrenting) and the uTorrent client.

          I regularly pull shows the day after they air. What’s really funny is when it’s quicker for me to download a DVD (and sometimes 720p downgraded BRrip version) in less time than it would take me to get off the couch, go down to the absement where we store the DVD’s and find the one I want. A 15 ft HDMI cable from monoprice means I’m watching it on my 42in tv.

    • Lisse24 says:

      This. I would pay $10-$15 bucks a month for HBO programming anyday.
      It’s not my fault that Comcast is too stupid to know how to hook my condo up to their system.

  2. Upthewazzu says:

    I would sign up for an HBO streaming channel the millisecond it went online. Also, I would kindly say goodbye to DirecTV.

    • rugman11 says:

      And your response is exactly why this will never happen. HBO and the cable companies have a symbiotic relationship and neither is going to take any action to harm the other.

  3. surreal estate says:

    Does this mean they won’t be offering shows for rent through services like iTunes? I’m not sure that it’s unreasonable to withhold your content to an all-you-can-eat subscription streaming service when you can get much more through a pay-per-view model.

    • Firethorn says:

      In many cases, the choice is unlimited viewing subscription, or the customer goes to bittorrent to get the material.

      Honestly, in many ways the torrent is better – sure, it takes longer to deliver, but I can have effectively instant rewind, no ads, transfer to any devices I want, etc…

    • shoelace414 says:

      The shows only appear on iTunes after the DVD is released.

  4. MattAlbie says:

    HBO GO seemingly exists to spite me. It launched very shortly after I’d finished buying every HBO show I would ever want to watch again, from DEADWOOD to CURB to THE WIRE and everything else.

    So I guess what I’m saying is, “you’re welcome.”

  5. Cicadymn says:

    No Game of Thrones on Netflix makes me a sad panda.

    • 44 in a Row says:

      It’s not even out on DVD/Blu-Ray yet, so you’ve got a while to keep being a sad panda regardless of what happens with this.

    • NorthJersey says:

      Season One releases on March 6th. It is known.

    • MonkeyMonk says:

      Game of Thrones will be available on Netflix as a rent-by-mail DVD as scheduled. To think Netflix is going to drop HBO DVDs is idiotic and would cause even more unrest among the already angry userbase. HBO DVDs are some of the most popular products Netflix rents out. Netflix will eat any additional costs and it will be business as usual.

  6. Marlin says:

    Guess people will just have to go to the Bay to watch HBO shows. ;)

    • SeattleSeven says:

      Yeah I guess you can buy DVDs on eBay… Surely there is a cheaper and faster way to get them?

      • PSUSkier says:

        Juuuust in case my sarcasm detector is broken, he’s talking about the Pirate Bay.

        Another (and my favorite source in which to get things like this) is the “net of users.”

        • Marlin says:

          Correct, guess I should have added the AAARRGGGGGGG!!!!!

          So lets see. HBO makes money sellign DVDs but gets nothing for the ARRGGGG bay. Yea good job HBO push more people that want to pay for your goods to not pay for them.

  7. Such an Interesting Monster says:

    Why do these companies believe that the crap they produce is just so valuable that we consumers have nothing better to do than to fall over ourselves as we race towards our wallets?

    Sorry HBO, but there isn’t a single iota of content that you produce that’s worth me spending a single extra penny to see.

    • nishioka says:

      > Why do these companies believe that the crap they produce is just so valuable that we consumers have nothing better to do than to fall over ourselves as we race towards our wallets?

      Because HBO wouldn’t be turning 40 this year if there wasn’t a market for what they sell?

      • Such an Interesting Monster says:

        Sears has been in business for 126 years. Best Buy for 46 years. And this year Walmart turns 50. And your point is?

    • little stripes says:

      Actually, they have a pretty large subscription base. Plenty of people find their content worthwhile enough to pay for. I probably would too if I had time to watch normal TV, but I don’t.

      I’d pay for their HBO GO streaming online if it was a reasonable price and it didn’t require I subscribe to their TV services as well. Same goes with Showtime.

      If HBO Go ends up as pay-for-streaming online without having to subscribe to their TV services, other cable companies like Showtime are surely to follow. This is a good thing and much closer to the ala-carte online streaming most of us want.

    • NeverLetMeDown says:

      Well, then why exactly would they care what you think? About 20 million American households disagree with you.

    • consumeristjohnny says:

      And for a large percentage of all Americans there is no market for OB Tampons, but they still market themselves for those that DO HAVE AN INTEREST. Newsflash, the world does not revolve around you. HBO markets to those that want premium movies and television shows without censorship. SOme of the greatest televisio has been on HBO from Bill Maher, to Larry Sanders, to Six Feet Under

    • pecan 3.14159265 says:

      I agree. In the past few years, HBO has done really well in original programming but people forget that The Wire, which is considered one of its greatest achievements, didn’t pick up a wide fanbase until it hit DVD. I watched The Sopranos on DVD because my parents didn’t have HBO. It’s not a big deal. I wouldn’t pay $16 a month for HBO just to get a few shows. I’ll wait for them on DVD,

  8. Shadowfire says:

    The easier you make it for consumers to watch your content legally, the less likely consumers are to pirate it. Just saying…

    • pot_roast says:

      They don’t care. Hollywood is certain that it’s going to get SOPA shoved down our throats, and this will be a moot point, since they’ll be able to magically end piracy on the internet.

    • Not Given says:

      OK, I did get GoT from Pirate Bay but I’m still getting the DVD when it comes out and I’ll watch season 2 the same way.

  9. Hawkeye says:

    Oh no! How will I see Arli$$ now?

  10. andyross says:

    The only HBO show I’m sort-of following is “True Blood”. If the next season never shows up on Netflix, I guess I’ll just not see it. That’s not to say I’d miss it. The BD’s were heavily locked up and had NO bookmarking, forcing you to sit through a long startup, find the episode, then find where you were if you ever wanted to stop watching for awhile.

  11. Happy Tinfoil Cat says:

    What is an “HBO”? Back in the 80′s there was something with that name cable subscribers could pay for which was a channel of recent movies and no advertisements as a competition to Showtime. But those don’t exist anymore than MTV plays music videos. Why pay money for old movies with a ton of self-serving advertising? Oh, now they have some original content, “whooopteee effin dooo”. You know what, there is original content all over the place, including the internets.

    • Upthewazzu says:

      If you had ever watched Boardwalk Empire, you wouldn’t have said any of this.

    • drjayphd says:

      Fun fact: business models change. Stupid arguments, though, will always exist.

      • Cat says:

        Yes, business models do change.

        So, why doesn’t HBO change their business model?

        • drjayphd says:

          If it’s working well enough, that’s a reason to not change. I haven’t looked at their financials or anything, so I don’t know how well they’re doing. But saying “herp derp there’s original content on the Internet so HBO’s business model is fucked” is just a stupid argument (not to mention the OP’s stuck in a time vortex if they’re judging HBO on its movie selection… their business model’s shifted more towards TV series, not airing movies).

  12. Errenden says:

    Congratulations HBO, way to drive your more of your declining share of paying customers into the arms of piracy once again. Glad to see that the CEO and MBA bean counters are on the ball in this whole internet fad.

  13. Cosmo_Kramer says:

    “it wouldn’t be a shock to see HBO titles gradually disappear.”

    Yeah, that’s not going to happen. Everyone wants to rent HBO DVDs, because no one wants to pay for HBO and the DVD sets are really expensive to buy. As long as there is demand for HBO DVDs, Netflix will have them. There’s a lot of obscure crap that would go away before HBO DVDs.

  14. NeverLetMeDown says:

    I love it when folks on the Internet assume that, “hey, those guys have no clue how the world works, and they’re making a really dumb business decision.” After all, it’s totally impossible that HBO might have done extensive research (you know, the kind that’s actually statistically valid, and based on real samples, rather than people on message boards), looked at the whole of their business, and decided that, on balance, this was the right move. Totally impossible.

    • little stripes says:

      Just because they did the research and came to a certain conclusion doesn’t mean it is going to be the right decision in the long-run. I’m sure Circuit City and Blockbuster spent tons of money researching and making decisions based on that research. Didn’t really help them any, did it?

    • frank64 says:

      You are probably right, but many business with really smart teams of people have made HUGE mistakes. Sometimes what should be done would be too big a change and it takes a competitor to clean thier clock. Netflix and Amazon are an examples of the innovators. Look at what happened with music companies. Both scenarios are possible.

    • Happy Tinfoil Cat says:

      Just like Netflix did with … what was the name of that new service??

      • rugman11 says:

        Despite the terrible way they want about it, the future will show that separating streaming and DVD services will be good for Netflix.

        • Happy Tinfoil Cat says:

          Explain how losing 800K paying subscribers in 90 days will be good for Netflix in the long run.

          • rugman11 says:

            Content providers charge Netflix per subscriber. By splitting DVDs and streaming, Netflix reduced the number of streaming subscribers (those people who COULD stream, but didn’t). This will make streaming content less expensive in the future.

  15. ancientone567 says:

    Can anyone say torrent? ROFL

  16. gellfex says:

    It’s pretty amazing that they’re on the outs, they could be best of friends, with Netflix creating an HBO streaming tier for the same price as the cable charge, content is content. The non-streaming model is Dead TV Walking, but they’re not going to stop fighting the future till the money’s gone, like Blockbuster. Meanwhile they’re training millions to get their shows for free.

  17. Mrs. w/1 child says:

    *cough* bittorrent *cough*
    *ah ah choo!* piratebay *sniffle sniffle*
    *psst* usenet

    Dear HBO,
    No one wants to deal with cable or satellite providers, they are awful, frustrating, and a rip off. I don’t want to rent equipment, deal with “installers” or allow a mega company to ruin my credit when they make a mistake. You produce some fantastic shows that my Husband and I REALLY like. Simply allow me to pay $1 – $2 per shows you produce. Sell them on amazon or whatever (I stay away from “icrap” anything). You get my money, I get to decide if/when I want to stop following/paying for the show.
    Sincerely,
    Never a cable/satellite subscriber
    cc: AMC

    • rugman11 says:

      Dear HBO,

      I don’t like dealing with the company that brings your content to me. I would really rather you create a new business model just to please me. And, honestly, I don’t really want to give you a consistent revenue stream either. I just want to throw you a couple of bucks now and then, you know, when I feel like it. If you could get on that new business model now, that would be awesome.

      • Cat says:

        Dear potential HBO customer,

        SCREW YOU, and your money. We don’t want your small change. What we want is for you to pay your cable overlords every month a large sum of money before giving you access to our content for an additional sum. This is OUR business model, and we like it this way because… um, because we said so, and because we’ve always done it this way, and we refuse to change just to make you happy.

        Fuck, you consumers are really starting to piss us off with your whining. When will you realize that we don’t need customers?

        Sincerely,
        HBO

    • shoelace414 says:

      Dear with one child,

      HBO episodes are more like $3-$4 per episode already on “iCrap”. that price won’t be coming down.

    • wellfleet says:

      Dear HBO,

      When I don’t like the way a company chooses to sell its product, I make my own rules and just choose to steal from them. This is a terrific example for my child!

      Sincerely,

      Mrs. w/ 1 child

  18. HogwartsProfessor says:

    Well screw you, HBO. I don’t watch your crappy shows anyway. I can’t afford your overpriced channel so it’s like you don’t exist to me. Take your DVDs and shove them up your ass. There’s plenty on Netflix to watch. I’ve been watching it all night.

  19. Cat says:

    Hello, HBO? I have my own Home Box Office. It’s called “Netflix”.

    I refuse to pay $68 a month for the 200 pound turd that is pay TV *before* I can have the privilege of pay HBO $14 a month for the few shows I might watch.

    Look, you can either get with the program, or GTFO and go the way of the dinosaur.

    Related story: Roku Announces HDMI Stick That Turns Regular TVs into Smart TVs
    http://www.dtvusaforum.com/internet-tv/46129-roku-streaming-stick-unveiled.html#post90658

    • PhiTauBill says:

      Except that it doesn’t really work with “regular TVs” per se…

      http://www.dtvusaforum.com/content/659-roku-announces-hdmi-stick-turns-regular-tvs-into-smart-tvs.html

      “The Roku Streaming Stick will plug into MHL-enabled HDMI ports on TVs. MHL is a new standard that uses the HDMI connector on TVs to deliver power and other critical elements for the streaming experience. There are already TVs with MHL from Samsung and Toshiba, and you‚Äôll see a bunch more announced at CES.”

      It’s an interesting device, but I’m not willing to buy a new TV just to ge me when of them new-fangled MHL-enabled HDMI ports. And will it work with my many HDMI switches? Me thinks not so much.

      • Cat says:

        Perhaps the headline is misleading, the point I wanted to make is that streaming is where HBO should be going.

  20. shelman23 says:

    I’d love HBOGo if i didn’t have to suscribe. I’m subscribed now, but canceling until they get it going on XBOX and PS3. Tired of watching it on little screens.

  21. SilverBlade2k says:

    HBO overvalues their content and think they are entitled somehow, to be immune from technological progress and new forms of distribution.

  22. JohnDeere says:

    hbo doesnt have enough content to go alone, they will have to partner with someone eventually or everyone will just torrent them…

  23. Loias supports harsher punishments against corporations says:

    I sent a letter to HBO stating I’d buy their content is it was fair priced and free from cable.

    I doubt they read it.

  24. sj_user1 says:

    As much as Netflix sucks, HBO is the a-hole in this fight.

  25. prezuiwf says:

    I think this is the beginning of the end for Netflix. They had a series of disastrous PR moves last year, their streaming library is not growing nearly as abundantly as promised, and studios are continuing to try to block their success. I wouldn’t be surprised if they’re replaced in the market within 3 years.

    • gellfex says:

      I doubt they’re on the way out. My kids adore Netflix and I’m sure they’re not alone. What netflix needs to do is really get on the studios and minor cable channels with 70 years of TV back catalog to make it available. There’s plenty of content out there few would buy but many would stream, much of it never released on DVD.

      Ex: There was a HGTV show called Modern Masters about craftsmen that is no longer broadcast and never released on DVD. That’s just money lying around on the floor to HGTV, someone will eventually get around to cashing it in.

  26. NotEd says:

    I get HBO discs from my local library, thanks very much.

    Netflix is only getting streaming money from me. At least for the time being.

  27. soj4life says:

    HBO may have hbo go available if you aren’t a cable subscriber, but they are going to charge you like $20 a month for the service.