For the Common Good: An Analysis of HBO’s Manipulation of the Commons


When introduced to America in the late 1940s, the television was predicted to be a brief fad that wouldn’t last more than a few years. Now in 2015, the world of television has become a staple of pop culture and modern day media distribution. Through decades of technological development and changes in consumer preferences, the television industry has managed to adjust and remain relevant. While premium channels like HBO (Home Box Office) and Showtime once rattled the nerves of top broadcast networks, the advent of digital streaming services like Netflix have become the latest innovation to pressure change in the industry.

The current changes to the television industry bring to light some of the shortcomings of the current model. Streaming services do not require the use of cable operators to distribute their content allowing consumers fewer barriers to access. In contrast, HBO has the power to choose which distributors it interacts with and therefore which audiences are left with or without access. Airwave usage is often considered a public commons, as evidenced by radio. Although distributed through similar methods as radio, television has historically been treated differently. HBO’s terms of distribution regulate the commons, and in doing so defies the rationality set by Kantian logic. The network’s reputation as a cutting edge innovator and industry leader makes it all the more surprising that HBO would impede on the public’s the right to content. The potential to understand the rationality behind HBO’s practices of distribution lies in thinking of the commons in conjunction with Kantian theories of ethics.

Nobody Brings It Home Like HBO

In an effort to expand into cable, Time Warner Inc. developed its subsidiary known as the Home Box Office (HBO) in 1972. In order to serve as a movie and live sport channel, HBO acquired rights to various films and distributed them through local cable operators over the airwaves. HBO’s first few years were a struggle to gain subscriptions and the network achieved its first profit in 1977 with 600,000 customers allowing the subsidiary to out perform Time Warner Inc.’s “all important magazine division,” according to George Mair (Edgerton and Jones 4). HBO’s use of the subscriber system meant that it was using a different economic model than the precedents set by the three major broadcast networks NBC, ABC, and CBS. While the three powerhouses rely mainly on advertising and the sale of commercial airtime to companies to generate their revenue, they also earn money from cable providers (i.e. Comcast, Verizon, etc.) in exchange for content. Instead, HBO’s revenue stream is connected directly to its subscription service, which “focused all of the channel’s attention on pleasing and retaining its viewing audience” and began “shifting the center of gravity in this sector of the television industry away from advertisers and more toward serving the needs and desires of the monthly consumers” (Edgerton and Jones 1). A subscriber’s ability to withdrawal from service meant that HBO faced greater pressure to meet subscriber tastes and needs. While this model can be seen as risky by allowing consumers to end their service specifically with HBO at any time, the model also provides HBO an advantage in creating stronger relationships with its consumers.

After achieving success through the subscriber dependent model, HBO had the financial capabilities to pursue new territory in the world of cable through the production of its first original series, miniseries, and “made-for-pay-TV movie” in the early 1980s (Edgerton and Jones 6). As HBO’s brand gained greater recognition, the network continued to expand its original content offering, which resulted in the continued increase of subscribers. Inspired by Time Warner Inc.’s success with HBO, Viacom entered the field with its own pay TV network Showtime, becoming HBO’s biggest rival. Despite more and more competitors entering the pay TV branch of television, HBO maintained its role as leader by being “able to pay higher prices per film than its competitors, winning better films and more subscribers” (“Home Box Office Inc. History”). The competitive nature of HBO’s executives pushed the network to remain on the cutting edge of television as it “was the first pay cable channel to scramble its signal to combat piracy, in 1986; to offer its service on direct broadcast satellite, in 1994; and to… “multiplex,” [which meant splitting] its signal into two or more channels” (Edgerton and Jones 10). With larger companies expanding into pay TV and developing new cable channels as well as multiplexing, the landscape of television became cluttered and expansive, making it more important than ever for networks to provide large quantities of quality content in order to differentiate themselves. HBO’s history of serving customer needs provided valuable experiences that prepared them to stay ahead in an increasingly competitive atmosphere.

Most recently, the world of television is facing challenges brought on by the development of digital streaming. New competitors like Netflix, Hulu, and Amazon have upset the traditional dynamic of television similarly to HBO’s entrance in 1972. With audiences finding ways to access content at times and by means adaptable to their daily routines, the strategy behind network series lineups becomes less of an influence over viewers. Even the earlier additions of DVR and TiVo threatened the advertising revenue streams of broadcast networks and have made rating analytics unreliable, since viewers can skip commercials and watch their favorite shows later in the week. While HBO does not suffer the same revenue hit in advertising, the availability of content through streaming means that potential audiences no longer need a television set to access entertainment. In response HBO has attached a streaming capability called HBO GO to its overall subscription service. Despite the fact that subscribers can now stream HBO content from their computers and portable electronics, HBO is limiting this service by making it only available to subscribers.

Let’s All Get Together

The concept of the commons encapsulates the idea that some resources are to the benefit of everyone and therefore should be shared. The sustainability of these resources relies on the ability of individuals to resist greed for the good of themselves and the community. The principles of the commons applies to “gifts of nature such as air, ocean and wildlife as well as shared social creations such as libraries, public spaces, scientific research and creative works” (“About the Commons”).

For example, consider commons that constitute the natural world. Imagine that everyone in the community benefits from a natural well. If each community member takes just the water they need then everyone will have enough water to cook, clean, and drink. But if one or two individuals decide that they want to take more water from the well to fill a pool in their backyard, they will be depriving other members of the community from that resource and upsetting the balance of the commons.

HBO People Don’t Miss Out

HBO and HBO GO content are not available to everyone equally. In some cases, viewers don’t have the option to subscribe. Factors like location and cable companies play roles in who has access to HBO and its televised or streamed content. As a result, television as a medium is not provided equally to everyone. By determining which cable companies are worthy of its business, HBO regulates its content in a way that is contradictory to the idea of the commons.

HBO and television as a whole can be considered part of the commons both because of the informative and expressive material disseminated through its content, as well as by the methods of its distribution. Particularly in terms of its distributive methods, television programming is transmitted over airwaves and satellites, which directly uses an area designated as a commons space. By linking television to the commons, HBO’s actions become directly restrictive of the commons by keeping some communities from accessing content. HBO’s choice to distribute through certain cable companies and provide streaming services only to subscribers is an example of the ways in which “the mass media model, and its core of an owned and controlled communications infrastructure, provides substantial opportunities for individuals to be manipulated by the owners of the media” (Benkler 1266).

Part of HBO’s choice to engage in this regulatory behavior stems from the idea that available content can become manipulated by users and outsiders. Although focusing on the Internet and its role in regards to commons, Yochai Benkler uses the fan-edited version of The Phantom Menace, known as The Phantom Edit, to explain how:

The networked information economy makes it possible for nonmarket and decentralized models of production to increase their presence alongside the more traditional models, causing some displacement, but increasing the diversity of ways of organizing production rather than replacing one with the other. (Benkler 1247)

Contrary to Benkler’s assurances that the potential new access to content will not negate the value of the original content, the nonmarket and decentralized models of production described in Benkler’s analysis encapsulates the fears networks like HBO face when making creative material available to the masses. These changes would mean creating new relationships between networks and consumers in ways that would risk HBO’s current model.

Through the Kantian perspective, HBO’s behavior becomes a rational dilemma. The Kantian principle of ethics relies on three formulations, which state “act only on maxims which you can will to be universal laws of nature,” “always treat the humanity in a person as an end, and never as a means merely,” “act as if you were… both subject and sovereign at the same time” (Bowie 4). In evaluating HBO’s distributive practices, Kant’s first and second formulations are the most applicable, as the third deals with HBO’s internal community and less so its treatment of stakeholders. According to Norman Bowie, “since Kant believed that every action has a maxim, we are to ask what would happen if the principle (maxim) of your action were a universal law (one that everyone acted on)” (Bowie 4). As a universal law, HBO’s practices of discriminating services based on cable companies and location would be flawed because it would mean that anyone could deny service to any customer. If this practice were universalized than no business would have to serve anyone, which is logically incoherent. Taking this a step further, HBO’s distributive methods involve barring certain groups from using the commons. As a universal law, that would mean anyone can regulate the use of the commons, a situation that would defy the definition of commons and therefore be logically incoherent. While Kant’s test is not meant to establish a practice as good or bad, the goal of this exercise is “to see if the principles (maxims) upon which an action is based are morally permissible” by understanding if it can be rationalized as a universal law (Bowie 5).

Bowie calls Kant’s second formulation “the ‘respect for persons’ principle” (Bowie 7). This formulation is meant to address the relationship between business and consumer in a transaction and has two requirements. The first is that “people in a business relationship not be used, i.e. they not be coerced or deceived” (Bowie 8). In the case of HBO, the restrictive methods of distribution remove the consumer’s sense of autonomy by not giving all consumers the same options to service. HBO’s activity can be seen as particularly deceptive when considering television and its use of airwaves and satellites part of the commons, because a consumer is led to believe that they have a right to engage in this service. The second requirement is “that business organizations and business practices should be arranged so that they contribute to the development of human rational and moral capacities” (Bowie 8). HBO’s interference with the function of the commons leaves particular audiences without the option to access a medium with content meant to be informative and expressive. In failing both Kant’s first two formulations, HBO’s manipulations of the commons through service availability can be seen a deontologically unethical.

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It’s Not HBO. It’s TV.

Understanding HBO through the concept of the commons and Kantian theory provides an insight into the dysfunctional relationship between television networks and consumers. However, HBO’s behavior isn’t unique in the television industry as “the broadcast networks… were also built around maintaining control over the use and transmission paths of their products” (Benkler 1251). While HBO has a history of innovation, the network has done little to restructure the way content is made available to certain audience. In fact, HBO’s size and success has made it even more powerful in determining which cable companies to partner with in its business.

Still, in the fast paced world of television it is reasonable to think that changes are possible in order to help lessen the discriminator actions of networks. While Benkler believes that with technology it is possible for communication to “develop towards an open, diverse, liberal equilibrium… [which] will lead to substantial redistribution of power and money from… the telecommunications giants,” he also believes that this change will “only [come] as a result of social and political action” (Benkler 1249). Unlike Benkler, I think that networks like HBO will want to take advantage of the developing technology for their own benefit, which will naturally lead them towards a less regulated version of business.

Even now, the popularity and success of Netflix and other streaming service providers are forcing the television industry as a whole to experiment with new ways to utilize technological capabilities. Despite its history of preventing certain audiences from accessing its content, HBO provides evidence that technology and competitive pressure can be moving the industry toward methods more in line with the principles of the commons. HBO’s latest project is one titled HBO NOW. This effort marks HBO’s second and more risky attempt at taking advantage of streaming and Internet capabilities. HBO NOW is intended to allow consumers to subscribe to a streaming only service, thereby cutting out the cable company and HBO’s excuse for not reaching certain markets. However, while HBO NOW has potential, it is still too early to determine if the service allows greater audience accessibility. Until there is more evidence regarding HBO NOW’s availability to consumers, HBO is still primarily engaging in activities that attempt to regulate the use of the commons by choosing which cable companies and consumers have access to its content, behavior deemed unethical through Kant’s deontological approach.

 Bibliography

“About the Commons.” On the Commons. Commons Magazine, n.d. Web. 29 Mar. 2015. <http://www.onthecommons.org/about-commons&gt;.

Benkler, Yochai. “Freedom in the Commons: Towards a Political Economy of Information.” Duke Law Journal 52.6 (2003): 1245-276. JSTOR. Web. 30 Mar. 2015. <http://www.jstor.org/stable/1373170?seq=3#page_scan_tab_contents&gt;.

Bowie, Norman E. “A Kantian Approach to Business Ethics.” (n.d.): 1-16. Web. 29 Mar. 2015. <http://stakeholder.blogs.bucknell.edu/files/2015/01/Bowie-Kant.pdf&gt;.

Edgerton, Gary R., and Jeffery P. Jones. “Introduction: A Brief History of HBO.” Essential Readers in Contemporary Media and Culture (2013): 1-20. JSTOR. Web. 28 Mar. 2015. <http://www.jstor.org/stable/j.ctt2jcsz2&gt;.

“Home Box Office Inc. History.” History of Home Box Office Inc. – FundingUniverse. Funding Universe, n.d. Web. 28 Mar. 2015. <http://www.fundinguniverse.com/company-histories/home-box-office-inc-history/&gt;.

Feature Image: http://filmmakermagazine.com/75693-women-in-film-vs-tv-why-the-disparity/#.VRsBrlzQRUQ

Image: Spongebob eating popcorn and watching TV in an episode of  “Spongebob Squarepants.” GIF found at: http://ak-hdl.buzzfed.com/static/2013-11/enhanced/webdr01/21/11/anigif_enhanced-buzz-8959-1385052048-6.gif 

 

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One thought on “For the Common Good: An Analysis of HBO’s Manipulation of the Commons”

  1. Interesting. The nature of owning the original “cables” of cable TV allowed HBo and cable channels to be apart from the airwaves. However, once the signal goes over the Internet, a more clearly commonly held commons, then we are back to yoru core questions.

    Moreover, you suggest, but could argue more strongly, that content is “king” and access to content should be treated as a commons, regardless of medium. This would mean that even when HBO is over “privately held” cable wires, your arguments could hold up.

    Like

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