Benner on Tech: HBO Gets Smart About Streaming

Katie Benner is a Bloomberg View columnist who writes about technology, innovation, and the cult and culture of Silicon Valley. She lives in San Francisco.
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People are Talking About…

As technology upends film and television distribution -- and unleashes a wave of deflationary pressure in its wake -- HBO has managed to churn out amazing programming amid all the upheaval. Now it's being (rightfully) lauded for its decision to embrace streaming video for cable TV cord cutters, an option widely perceived as the future of video consumption. It offers the standalone streaming service HBO Now through Apple’s iOS platform and delivers programs like Game of Thrones as part of Sling TV’s $20-a-month on-demand programming bundle.

The changes at HBO are vitally important to its parent company Time Warner, which is struggling to find and maintain growth -- this despite the fact that the changes to HBO's business model come with no guarantee of success. The company doesn't control its own streaming infrastructure. It outsources that function, and there's debate over whether that will help or hurt HBO in the end. And Stratechery's Ben Thompson notes that it's unclear whether HBO will be able to handle customer service issues, a function that has long been handled by the cable companies.

Over the past few days, the New York Times and the Wall Street Journal published in-depth looks at the executives behind HBO’s transformation, Chief Executive Richard Plepler and Time Warner Chief Jeff Bewkes.

But don’t forget that Netflix is probably as strong a driving force behind HBO’s nascent transformation as either of those men. Even before it started working on original TV shows and movies, Netflix was an existential threat to the likes of HBO, a cable channel that airs more movies like “Car Wash” than it does original television series like "Girls." It’s great to applaud Plepler and Bewkes for changing HBO to meet the future, but don’t forget that it probably wouldn’t have happened if they weren’t afraid of Netflix and its CEO Reed Hastings.

** Sort of related: Sling TV users experienced delays and other glitches during the Game of Thrones season 5 premiere. (the Hollywood Reporter) Several Game of Thrones episodes leaked online. (TorrentFreak)

More Unicorn Talk

500 Startups’s founder Dave McClure says that, yes, lots of unicorn companies are highly valued. And some may even be way overvalued. But what’s more important to the sector is the fact that a lot of old tech companies, which he calls dinosaurs, are overvalued too. In fact, a lot of unicorns have huge valuations because they’re expected to kill off and replace an old school business. He writes: “almost every Dinosaur Company is extremely vulnerable to a Startup Unicorn eating their lunch.”

This shift is well underway and, yes, most of the big old companies like the IBMs and Hewlett-Packards of the world are going to continue to lose value if they can’t innovate. But as McClure notes, this change comes slowly. Giant old tech companies generate monster amounts of cash, enough to hang on and keep a lot of these unicorns from taking over the market for a while.

Of Ski Resorts and Changemakers

The New York Times profiles the four entrepreneurs who bought a ski area in Utah and founded the Summit Series.

"Our convening power grew because no one was really reaching out to a generation of entrepreneurs,” explained Jeff Rosenthal, one of Summit’s four founders, along with Brett Leve, Jeremy Schwartz and [Elliott Bisnow]. The conferences melded talks about global poverty and keynote speeches by folks like Bill Clinton and Richard Branson with shark-tagging outings, seminars on lucid dreaming and private performances by acts like the Roots. They were essentially networking events designed to foster stronger ties. (“Summit Series is about character,” attendees were told. “It’s not about resumes. So show love to all the start-ups, and don’t fanboy the big-timers.”)

Ventureland

Spotify is close to a deal to raise $400 million from investors including Goldman Sachs and an Abu Dhabi sovereign wealth fund that would value the streaming music service at $8.4 billion. (the Wall Street Journal)

People and Personnel Moves

Simon Khalaf is now Yahoo’s senior vice president overseeing the Yahoo home page and some of its most well-known portals. Khalaf is the founder of Flurry, a mobile analytics company that Yahoo acquired. David Karp will now report to Khalaf. Karp, whose company Tumblr was also acquired by Yahoo, previously reported directly to Chief Executive Officer Marissa Mayer. (the New York Times) Mike Kerns, who used to oversee Yahoo’s home page, has left the company. (Business Insider)

Lynda Weinman, the founder of Lynda.com, spent decades teaching people about the Internet and Web development before LinkedIn acquired her company. (the Wall Street Journal)

Peeyush Ranjan, who formerly managed Google’s Android One engineering group, will join Flipkart as head of engineering.

Ray Kurzweil talks about his plan to live forever. (Financial Times)

Jack Dorsey thinks the Amazon Echo can help with carpal tunnel syndrome and that live video services like Periscope are “the closest thing we have to teleportation.” (Mashable)

Companies

Amazon’s drone test program has received approval from the Federal Aviation Administration. (Bloomberg)

Apple has approached artists such as Florence and the Machine and Taylor Swift for limited streaming rights to content to help promote the relaunch of Beats Music. (Bloomberg)

Comcast customer service took another hit when a man reportedly couldn’t get his service canceled after his house burned down. (Pioneer Press)

Qualcomm is being pushed to split up by activist hedge fund Jana Partners. (the Wall Street Journal)

Twitter is telling celebrities and publishers to use its live-streaming app Periscope and ditch its rival Meerkat. (TechCrunch) It also decided to stop licensing all of its data to third-party resellers like DataSift and NTT as it thinks about ways to monetize its data. (the New York Times) Venture investor Mark Suster explains why the move won’t hurt DataSift.

Security Watch

Amid the fight over government efforts to abolish encryption, National Security Agency head Michael Rogers has a compromise: Tech companies create a digital key skeleton key that is divided into pieces that no single entity can use. (the Washington Post)

Follow stolen data through the twists and turns of the Dark Web. (ZDNet)

China’s Great Cannon is an attack tool that’s being used to try and silence critics that are outside of the country’s Great Firewall, say researchers from the University of Toronto.

FireEye released a report on APT30, a decade-long spying operation that could have ties to China.

News and Notes

First quarter global PC shipments fell 6.7 percent from the same period last year, according to a recent report from IDC. A preliminary Gartner report says shipments fell 5.2 percent in the first quarter of 2015.

"Black Twitter" helped bring Ferguson news to national and global attention. Meredith Clark, a professor at the Mayborn School of Journalism at the University of North Texas, describes the impact and importance of this group of Twitter users. (the Atlantic)

Silicon Valley grapples with age bias, writes software engineer Grace Wong.

Stop calling paternity leave “vacation,” writes former Pinterest programmer Dave Dash.

Podcasters may broadcast again without fear of patent trolls, thanks to the Electronic Frontier Foundation.

Craigslist, the musical!

The greatest band website maybe of all time.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the editor on this story:
Maria Lamagna at mlamagna@bloomberg.net