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HBO Nordic never broke its own ice. Nobody pays upfront for an addiction. This is why you can get a month of HBO Now for free. And it’s going to work. Just ask Netflix.
In the old offline days, cable providers and telephone companies relied on a business model that required them to subsidize installation. To deliver cable or phone service, providers had to mobilize an army of heavy duty trucks and technicians to burrow wires into streets, run them into individual houses and clamp them onto TVs and set-top boxes. To start service, every new subscriber could easily cost upwards of $1,000, so naturally providers would barricade their investments behind tall contracts and barbed termination clauses.
While this model is now obsolete, we have a ways to go before cutting the cord is the quick snip we’d like it to be. Getting out of a traditional cable contract is still a bruising and costly labyrinth of trap doors and automatons. After all, they’ve been honing their draconian repertoire since the ’80s.
It’s in this atmosphere that HBO came of age. They were tied to the provider and served as captains in the battle of the channel bulge.
By the time broadband arrived, folks came to the entertainment frontlines with all the weaponry they needed for today’s content battlefield. The wires were solidly in the ground and, instead of a set-top box, all they needed was a computer and a piece of pillaged software. This gave them immediate access to all sorts of explosive entertainment. Now the business was the portal itself.
What’s more, the portal overlords couldn’t get all tricky when it came to pricing, because there was always someplace where the portal was free. The rise and fall of good old NetZero proved that customers were willing to pay a nominal fee for a clean experience. AOL learned this when they switched to their unlimited access model. This offered the feeling of a free service without all the rogue advertising, and people were willing to pay for it.
Most importantly, AOL introduced the free trial that launched a thousand trucks. Mail trucks, to be exact. And really, what better metaphor for the fact that as long as you own the portal, content can hitch a ride on anyone’s broadband, for all you care. By the time SaaS really landed, people expected to have a sample before they paid. Indeed, HBO Nordic never stood a chance.