HBO and the future of pay-TV: The winning streak | The Economist

Three things here. First,in an age when we sit here and decry Facebook and others for selling us to advertisers, it’s important to note that that is exactly what other television stations do and HBO does not. Granted, they know way less about us, but the principle still holds true.

Second, by not being beholden to advertisers, HBO can make a better product. HBO’s series are awesome, and they have made television as a whole awesome. Competition for great shows has intensified. The former president of HBO went to Starz and has starting commissioning programming to compete. AMC has stepped up its game directly because of HBO and has given us Mad Men, Breaking Bad and The Walking Dead. 

Finally, the bundling we hate so much is equally responsible for that great content. This article notes “Even by television’s standards HBO offers unusual creative freedom. Alan Ball, who won an Oscar for writing “American Beauty” before joining HBO to create “Six Feet Under”, contrasts HBO with the “gulag” of broadcast television.” It goes on, “HBO is also more likely than other networks to give programmes a chance to build audiences. It often ostentatiously orders a second season of a show the same day the first episode of the first season is broadcast. Series launched with a lot of publicity but that never find a large audience, such as “In Treatment” or “Treme”, a show about New Orleans, are kept alive for longer than you would expect.” 

It is precisely because all of their series are bundled that they can do this. if they offered them a la carte, every series would have to make its own money. Lesser, riskier dramas not only wouldn’t survive, they may well never get made in the first place. Unlike other stations, HBO bears all the production costs of its shows itself. It faces far more risk. The bundling offsets that risk and allows them to make these awesome shows.