SmoothSpan Blog

For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Choice Wins Almost As Well As Free. Offering Both is a World Beater

Posted by Bob Warfield on January 21, 2008

HBO is going to begin a trial where it puts some of its shows online at no charge.  The service, called HBO on Broadband, will be starting this week to subscribers in Green Bay and Milwaukee, Wis., then it will spread to other parts of the country. The free service will allow access to about 400 hours of movies and original programming each month.  To access HBO on Broadband you must already be an HBO subscriber.  You won’t be able to download the programs, but you can watch them to your heart’s content for a few weeks after they air.

What’s significant here? 

There is irony, of course.  Mathew Ingram points out that HBO is a subsidiary of Time Warner who are actively thinking of throttling bandwidth because of all the video downloading that’s going on.  Here’s HBO offering a service that presumably will lead to more video downloading.  It’s ironic that some elements of the big company understand the value of choice while others want to create Artificial Scarcity, typically a losing strategy.

I see this move deep down as offering much greater choice.  Choice to watch what I want when I want (at least among HBO’s offerings) rather than tethering me to the fixed schedule that broadcast media do.  Choice has always been a huge winner.  More choice is at the heart of the megastore movement that established giant bookstores and other chains.  When I used to work with Louis Borders, he told me the actual ability of a megabookstore to sell books more cheaply was pretty limited.  Instead, it was all about providing more choice than people had seen before. 

People think of the Internet more often in terms of free, but choice has played a big role all along.  Did all that music get downloaded strictly because people were too cheap to pay for it?  Come on!  Certainly some of it did, but an awful lot goes to choice.  MP3 is all about choice.  I don’t have to take all the tracks I don’t like.  I can keep just what I do like, and it is instantly accessible all the time.  It puts control over my music in my hands.  It gives me choice and the power to act on my choices.

The unbeatable combination comes when you can combine free and choice together.  Who could turn that down?

What’s interesting, is may even help sell more of the core HBO offering.  That’s not bad either.  Gizmodo is concerned they’re not moving fast enough, but if the service plays in Wisconsin, it’ll play everywhere and they’ll pick up the pace.  Others will follow.

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