Earlier quoted context omitted.
Because this is an act of war against other carries that currently carry HBO. Those carriers can drop HBO and cause revenue to drop much faster than broadband-only HBOGO subscribers will bring in new revenue. It's trading an existing, stable, proven revenue source for one that is none of the above at scale. Edit: This is a summary of one of HBO's arguments. The dcurtis post examines a couple of other arguments. Posit…
I'll wait and see how Netflix does on producing original content; HBO seems really good at it. Over the years they've shot some amazing shows and the product speaks for itself. Even though I am a current Netflix subscriber I would still easily add HBOGO to my monthly bills for premium access to their content. Also.. their largest carriers also serve a lot of cable internet, for most it wouldn't be adding a competitio…
The status quo is that the typical HBO sub has a cable bill over $150/mo, because he already has broadband. Helping that subscriber cut the cord and go Internet-only (while unbundling HBO) will therefore result in a lower cable bill for the subscriber. A portion of the money the subscriber saves comes out of the carrier's pocket. This is the classic trading of analog dollars for digital pennies, and carriers will resist it as long as they are able (in the absence of a new big revenue source).
Regarding positioning: HBO is very good at producing content, but so are a lot of the organizations that provide content to Netflix (e.g. CBS, NBC, TNT, Showtime, Disney, etc.) $8 gets you access to all of those vs. a hypothetical $5 to get the output of a single studio. It's going to be very hard for HBO to hold the line on pricing in that environment.