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Universal’s Bad Deal: Look Who’s Showing Netflix the Door

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Universal’s Bad Deal: Look Who’s Showing Netflix the Door image HBO GO 300x160After the recent news of Universal’s unprecedented ten-year deal with HBO Go for their streaming content (essentially giving Netflix a hard, and ill-advised, back-hand), you might be wondering just how massive a mistake Universal is making. Now, that might seem hyperbolic, but when you consider the implications of the ten-year, anti-Netflix deal, there’s a lot of stupid to go around.

This isn’t the first time “old media” has made a bad move. Consider Jason’s blog on Dish’s big boo-boo of not carrying AMC last year. But, I’d argue that this is the biggest bit of “old media stupid” I’ve seen in a while.

Ten Years is a Really Long Time

Let’s think about just how long ten years is. Consider the state of social media ten years ago: mainly the fact that there wasn’t much of it. 2003 was the age of Friendster and Myspace. WordPress had only recently opened its doors. Facebook was still a year away. YouTube was two years away. Twitter was THREE years away.

The first iPhone wasn’t announced until January 9th, 2007. That’s only six years ago at the time of writing. Six years from dumbphones whose only advantage was Brickbreaker, to stylish smartphones with the whole internet in your pocket.

It took mankind only about seventy years to go from the Wright Brothers discovering winged flight to man taking his first steps on the Moon. Ten years is a seventh of that time. One-seventh. There is no way to stress it enough, ten years is a really long time.

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Not only is time a factor, but there’s also the fact that streaming TV media is failing.

It Might Not Be TV, But It’s Still a Bad Call

Consider the options in streaming media. Nobody is doing that well in this department.

There’s Netflix, the red-hued sensation that’s become the bane of any network currently running anything, and which is facing large swaths of vacating material. Shows that you’re watching might be taken down from the site randomly, or shuffled into a new season format, or even be out of order in the first place. Don’t get me started on the horrible mess that Netflix has made of classic Doctor Who.

YouTube has been making pushes into original content, but there’s really nothing on that site yet at the level of broadcast television. You can also find old shows on YouTube, but even the legally posted ones might be taken down at a moment’s notice. Unless you’re a fan of public domain television from the 1950s and earlier, you’re pretty much out of luck on legal hour-long material.

There’s also Hulu, a streaming network that was flawed from the start – bogged down in longer-than-broadcast commercial breaks, a network-mandated interest-killing wait time between broadcast airing and Hulu upload (sometimes longer than a week), and a generally ungainly form factor that impedes easy watching of shows. Some are already saying that it’s time to throw in the towel on Hulu and it isn’t hard to see why.

But even in the face of other streaming media sites failing, Universal’s biggest mistake is still that they went with HBO for one simple reason:

There Are Maybe Three People Legally Using HBO Go

The last major factor to consider about the deal is that there are, at best, three people legally using HBO Go. With HBO’s short-sighted decision to not simply sell Go separately from their old-fashioned cable-based service, they’ve locked themselves into a pattern where people trade their “Go codes” – passcodes intended to only be used by the HBO customer – like it’s nothing. Parents give the codes to their kids, those kids give the codes to their friends, and a big web of people using the codes is opened up. The end of this whole thing results in a simple fact: there’s no money in HBO Go streaming.

No matter how bad the Netflix money is, there’s no way it’s as bad as the potential Go money will be. Beyond the initial deal, it’s really hard to see how Universal is getting out on top in this whole thing. Worst still, and I can’t possibly stress this enough, ten years is a really long time.

Imagine ten years when Universal gets free of the deal. Will HBO Go still be around? Will TV even exist in the same way? Will we all just be beaming signals of our favorite shows back and forth using brain-implanted entertainment chips? The sky’s the limit for how short-sighted and terrible the deal is for Universal.

Again, knowing your field is ridiculously important. Flexibility is incredibly important. Locking a one-year strategy is risky in the world of technology. Locking a plan for ten years is just ridiculous.

Whose HBO Go code are you “borrowing?” Have you ever been locked into a deal you regretted?

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