"Game of Thrones" Will Never Beat "Mad Men" -- Here's Why

So far, Game of Thrones is beating Mad Men in the ratings war. The second episode of the fantasy epic based on author George R.R. Martin's "A Song of Fire and Ice" books drew in 4.3 million viewers, versus 3.4 million for the Mad Men premiere.

As far as I'm concerned, both shows are well written and worth watching. Yet if HBO were spun off from Time Warner (NYSE: TWX  ) as an independent company, I'd still rather own shares of Mad Men distributor AMC Networks (NASDAQ: AMCX  ) .

Sources: HBO, YouTube.

Why? Accessibility. By bundling its content with cable providers, HBO makes it unnecessarily difficult to cater to the increasing number of viewers who are just as comfortable watching via tablet as they are on TV.

Consider how Comcast's obtuse Xfinity service handles streamed HBO content. Watching on my Mac requires a log-in to comcast.net and then navigating to a "watch TV" tab, where I can look up episodes and movies. Once I've done that, starting or picking up an episode works great -- just so long as I haven't changed devices. The Comcast Web experience is self-contained.

So is the iPad experience, where HBO GO is available. Logging in there with my Comcast credentials gets access to episodes but no viewing history, making it a poor substitute for Netflix (NASDAQ: NFLX  ) and Apple's (NASDAQ: AAPL  ) iTunes, both of which bookmark video content across devices.

But where Xfinity really fails is in the living room. Prior seasons of Game of Thrones simply aren't available through Xfinity On Demand. Interested catch-up viewers are instead pushed to the Web to experience Comcast's streaming weaknesses live and in living color.

Meanwhile, synchronized viewing is only going to get more important. According to IDC, tablets are on track to outsell desktop PCs this year and will outsell laptops come 2014. Hundreds of millions of mini-TVs are out in the wild, waiting to be fed. Hundreds of millions more are coming.

Separately, a recent survey conducted by Belkin and Harris Interactive found that roughly 30% of viewers surveyed said they were at least somewhat interested in replacing traditional cable with digital services such as Netflix. It's a good bet a number of these rule-breaking TV fans already are, or are about to be, tablet owners.

Liberty Media's (NASDAQ: LMCA  ) John Malone, a cable industry insider, may have said it best when he questioned the long-term veracity of cable network efforts to bundle content in order to preserve profits.

Cable network operators "have to face reality that maybe you need to segregate your market like everybody else," Malone said in an interview with CNBC's David Faber.

Malone is right: Bundling doesn't make sense anymore. Time Warner is only limiting HBO's options -- and devaluing its content -- by sticking with the dinosaurs that insist upon it.

For further analysis of how Netflix is changing entertainment, tune into our newest premium research report, in which we take you inside Netflix's entertainment empire and tell you what the streaming sensation is really worth, and whether the stock deserves a place in your portfolio. Access your report now by clicking here.


Read/Post Comments (17) | Recommend This Article (5)

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  • Report this Comment On April 14, 2013, at 9:18 PM, laytonc32 wrote:

    This is a dumb article, Game of Thrones is more successful than Mad Men. First ratings don't matter because HBO is a premium channel. Second there is DVD/Blu-Ray sales and merchandise to consider. Game of Thrones sell more Blu-Rays than any other TV show, that is millions of dollars right there. The show also generate merchandise which I doubt Mad men gets any.

  • Report this Comment On April 14, 2013, at 9:21 PM, laytonc32 wrote:

    And this article doesn't even mention HBO Go which comes with 99% of cable packages (I know Comcast has it) if you pay for HBO. You can get HBO Go on tablets as well.

  • Report this Comment On April 14, 2013, at 10:13 PM, kpmandglr85 wrote:

    Mad Men/AMC had the whole merchandise line with Banana Republic. At least as far as fashion is concerned, Mad Men offers products outside the screen that are a bit more marketable.

  • Report this Comment On April 14, 2013, at 10:43 PM, meh5656 wrote:

    It would help if the guy who wrote this wasn't just plain wrong. You can get HBO on demand as part of Xfinity's on demand set up. It's how I watched seasons 1 & 2 of Game of Thrones. Way to check your facts.

  • Report this Comment On April 14, 2013, at 10:50 PM, Spillsthewax wrote:

    Who cares? Is this a rooting interest in technology? This article is so...whatever.

  • Report this Comment On April 14, 2013, at 11:24 PM, Jasssli wrote:

    So many holes. First, the HBO Go is not mentioned. Also, you can't get GoT on Netflix; Netflix is not yet an alternative to cable by far. Thirdly, how can you compare two shows that cater to two completely different audiences, both in terms of genre and medium (basic lineup vs primium channel)? It's like comparing the Family Guy to, say, Fast and the Furious francise. Besides, if HBO can get more viewership even with the restriction of the primium, heck, I put my money on HBO.

    This guy clearly is advertising for AMC; I may be wrong, but I've never heard anyone other than AMC use the term "synchronized viewing".

    Yes, I would like to be able to get HBO for less money. If Netflix offers GoT and HGTV stuff I would get it in a heart beat. But I do believe AMC should try better than this article.

  • Report this Comment On April 14, 2013, at 11:30 PM, Jasssli wrote:

    Oh yeah, and if this writer is truly an independent writer he would have mentioned AMC's other, more popular shows, like, has anyone heard of The Walking Dead???? Oh, that's right, that show just had its season finale and Mad Med is just starting. How convenient.

  • Report this Comment On April 14, 2013, at 11:55 PM, octopussoup wrote:

    I have suspicioun though that Mad Men will hold up better with time and will be remembered much longer after Game (non necessarily the books) is forgotten

  • Report this Comment On April 15, 2013, at 3:09 AM, greybuscat wrote:

    In terms of actual popularity, not legitimate viewership, business models don't matter. People will watch it, whether it's paid or not.

    Of course, that doesn't bring revenue, but in terms of the value of intellectual property, which is dictated by cultural impact, something unique like Game of Thrones will be remembered for far, far longer.

    Toys, spin off books, comics, these build entertainment empires, not Nielson ratings.

    Just ask George Lucas.

  • Report this Comment On April 15, 2013, at 5:31 AM, Cbrenner20 wrote:

    Who pays for content anymore? Its all free as soon as it is broadcast.... Aereo is proving it.... iDownloadlite with iseri.es, iTheatr.es, SnagFilms, Crackle, the list goes on and on .... There is no sense in paying for "content" through a middleman at all in the digital world. Only a real "MadMan" would pay for content thats just as accesible with an internet connection that could hook up to NetFlix and just as easy to any freesource. NFLX has to have brains smart enough to know this as does Motley... What a sham they attempt to funnel you to pay-for services in their stock recommendations at high betas with little inherent value. What another corporate scam posing as if they look out for the little guy individual investor... Any real analyst worth their weight would say NFLX is overvalued and we have no clue why its inflated nor can we predict its true value at this time due to extraordinary market forces that do not reflect any metric. Shame on you Motley.

  • Report this Comment On April 15, 2013, at 5:44 AM, Cbrenner20 wrote:

    Please show me the last time you recommended a stock with a P/E of 500+ with little cash on hand, no brick and mortar products to offer, and financing future debt with a all over the map BOD and CEO made you or any other fool sustainable double digit returns on earnings... This company is a joke and cash cow for momentum traders plain and simple.

  • Report this Comment On April 15, 2013, at 9:38 AM, TMFMileHigh wrote:

    Fools,

    Thanks for all of your comments. I appreciate you taking the time to weigh in.

    I'll address separate questions in subsequent posts. First, a few follow-up thoughts:

    1. Upon review, I don't think I made it clear why I believe HBO isn't doing as much as it can with content. The title is a reference not to the shows themselves but to how HBO and AMC develop and market their IP. "Mad Men" is more valuable as a consequence of that strategy, not because it's a better show. (I really enjoy both programs.)

    Allow me to provide a simple example. GOT is an exclusive Time Warner property and -- barring a major strategy shift -- will only ever broadcast via HBO or iTunes. MM, on the other hand, is licensed to Amazon, Google, Netflix, and iTunes, and there are plenty more opportunities to license widely here and overseas.

    Warner won't do this so long as cable companies pay HBO's bills. Why? Imagine if you could buy the current season of GOT from iTunes. Would you still pay $12.99 or so monthly to your cable co. for the right to have HBO?

    2. What makes HBO GO problematic, in my view, is that you need a cable or satellite subscription to activate it. This two-step authentication, while nice for the cable companies, prevents HBO from seeing me as a customer and creating a synchronized account that reveals where I am in the latest GOT episode regardless of which device I use to access my HBO service.

    3. Finally, I think I presumed too much when talking about bundling in the conclusion. There are two types of bundling: content bundling and service bundling. Malone was specifically referring to content bundling, in which a major supplier such as Time Warner offers up all its channel programming (i.e., CW, TBS, HBO, etc.) as a single package to be bought and broadcast. Take it all or take nothing.

    Distributors such as DISH hate this all-or-nothing arrangement because it forces them to swallow low-ratings minnow channels in order to get the bigger fish in their lineups.

    But there's also a limiting factor for content suppliers. By controlling the bundle, distributors also control what's available to viewers at a time when viewers don't want to be controlled.

    Again, this is why HBO GO is so ineffective -- it doesn't synchronize with my main HBO account because Comcast, not HBO, controls that relationship.

    I'd still do business with HBO were it independent. The network produces far too many good shows not to. I only wish I had the choice.

    FWIW and Foolish best,

    Tim

    --

    TMFMileHigh in CAPS and on the boards

    @milehighfool on Twitter

    http://about.me/timbeyers

    http://timbeyers.me

  • Report this Comment On April 15, 2013, at 9:54 AM, TMFMileHigh wrote:

    @Cbrenner20,

    >>Please show me the last time you recommended a stock with a P/E of 500+ with little cash on hand, no brick and mortar products to offer, and financing future debt with a all over the map BOD and CEO made you or any other fool sustainable double digit returns on earnings... This company is a joke and cash cow for momentum traders plain and simple.

    Sure, let's talk about Amazon.

    Netflix isn't without challenges but you're deluding yourself if you think there's no value here.

    Content consumption habits are shifting from TV alone to multi-device and Netflix is on more devices than any other service. Apple is a partner. DVD rentals are funding original content. Viewership has doubled over the past year.

    Longer term, there are more than 900 million pay TV subscribers in the world. Would it really be a stretch to see a globally deployed Netflix service capture 20% of that total?

    I stand by this trade, which has thus far been a multibagger for our family portfolio: http://www.fool.com/investing/general/2012/05/29/the-no-1-re...

    Thanks for writing and Foolish best,

    Tim

    --

    TMFMileHigh in CAPS and on the boards

    @milehighfool on Twitter

    http://about.me/timbeyers

    http://timbeyers.me

  • Report this Comment On April 15, 2013, at 10:01 AM, TMFMileHigh wrote:

    @meh565,

    Thanks for writing.

    >>It would help if the guy who wrote this wasn't just plain wrong. You can get HBO on demand as part of Xfinity's on demand set up. It's how I watched seasons 1 & 2 of Game of Thrones. Way to check your facts.

    Except that you're wrong. You cannot stream season 1 of GoT from Xfinity On Demand. Seasons 2 and 3 are online as of this writing, plus some specials, but it would be incorrect to say Comcast has a comprehensive list. For that, you need HBO GO.

    Foolish best,

    Tim

    --

    TMFMileHigh in CAPS and on the boards

    @milehighfool on Twitter

    http://about.me/timbeyers

    http://timbeyers.me

  • Report this Comment On April 15, 2013, at 10:13 AM, TMFMileHigh wrote:

    @Jasssli,

    Thanks for writing. Let me try and address your concerns one by one.

    >>First, the HBO Go is not mentioned.

    Actually it is. First sentence of the fifth paragraph.

    >>Also, you can't get GoT on Netflix; Netflix is not yet an alternative to cable by far.

    See above. Limited distribution is an HBO problem rather than a Netflix flaw.

    >>This guy clearly is advertising for AMC; I may be wrong, but I've never heard anyone other than AMC use the term "synchronized viewing".

    Yup, you are wrong. HBO parent Time Warner is one of the earliest backers of the "TV Everywhere" concept -- from living room to tablets, etc. The difference is that Time Warner, unlike Netflix, Apple, and YouTube, hasn't yet figured out how to bookmark content across devices, which is important when you're picking up a show or movie you haven't yet finished.

    More: http://www.timewarner.com/our-innovations/content-everywhere...

    >>Oh yeah, and if this writer is truly an independent writer he would have mentioned AMC's other, more popular shows, like, has anyone heard of The Walking Dead????

    Sure. I've written extensively about "The Walking Dead." (Links below.) As you correctly point out, the headline refers to the timing of shows that are airing right now -- GOT and Mad Men.

    TWD writings:

    http://www.fool.com/investing/general/2012/11/29/this-walkin...

    http://www.fool.com/investing/general/2013/01/16/are-zombies...

    http://www.fool.com/investing/general/2013/01/18/these-unsun...

    http://www.fool.com/investing/general/2013/02/27/its-officia...

    Foolish best,

    Tim

    --

    TMFMileHigh in CAPS and on the boards

    @milehighfool on Twitter

    http://about.me/timbeyers

    http://timbeyers.me

  • Report this Comment On April 15, 2013, at 1:29 PM, MovieMann16 wrote:

    " GOT is an exclusive Time Warner property and -- barring a major strategy shift -- will only ever broadcast via HBO or iTunes. "

    You mean like the other HBO shows that have been braodcast on basic cable like Six Feet Under or The Sopranos?

    "2. What makes HBO GO problematic, in my view, is that you need a cable or satellite subscription to activate it. This two-step authentication, while nice for the cable companies, prevents HBO from seeing me as a customer and creating a synchronized account that reveals where I am in the latest GOT episode regardless of which device I use to access my HBO service."

    That's a problem? I mean it's more nitpicking of tech.

    3. Finally, I think I presumed too much when talking about bundling in the conclusion. There are two types of bundling: content bundling and service bundling. Malone was specifically referring to content bundling, in which a major supplier such as Time Warner offers up all its channel programming (i.e., CW, TBS, HBO, etc.) as a single package to be bought and broadcast. Take it all or take nothing."

    I believe it's a deal in the works right now. Pick and choose cable is something that's been talked about for a long time and eventually will happen.

  • Report this Comment On April 15, 2013, at 1:55 PM, TMFMileHigh wrote:

    @MovieMann16,

    Thanks for the comments!

    >>You mean like the other HBO shows that have been braodcast on basic cable like Six Feet Under or The Sopranos?

    I'm not aware of these shows ever airing elsewhere in unedited form. Point me to examples? I'd love to be corrected here since it would be a good sign.

    >>That's a problem? I mean it's more nitpicking of tech.

    I think so, yes. And not because of the tech but because of the way new form factors have changed viewing habits.

    >>I believe it's a deal in the works right now. Pick and choose cable is something that's been talked about for a long time and eventually will happen.

    Agreed. It can't come soon enough, in my view.

    Thanks again and Foolish best,

    Tim

    --

    TMFMileHigh in CAPS and on the boards

    @milehighfool on Twitter

    http://about.me/timbeyers

    http://timbeyers.me

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