The virtues of a business model that charges us for our ambition rather than our behavior

An interesting observation in How Highbrow Wins in a Lowbrow World by Derek Thompson.

The fact that HBO has no ads means the network has no money tied up in its ratings. If each of its 43 million US subscribers watch 1,000 hours, 100 hours, or zero hours of "Game of Thrones" this year, it's all the same to the company's bottom line. Technically, HBO doesn't need viewers. It just needs subscribers.*

Compare HBO's business to most broadcast networks, like Fox, CBS, and NBC, who make most of their revenue from advertising, which depends on ratings. Broadcast TV won't survive on cable subscribers, alone. It needs viewers—and it tests and re-tests its shows to ensure that they will be watched by a sizable and sellable audience.

These are two business models living inside the same bundle. HBO is in the business of selling a brand. Broadcast networks are in the business of selling tickets.

If you don't think you can see microeconomics at work, just turn on your television. The networks relieved of the pressure to maximize audience tend to be the leaders in quality programming. HBO has won the most Primetime Emmy Awards for each of the last 13 years; its highbrow competitors, like Showtime and Netflix, follow a similar business model of subscriptions over ads. (Even AMC makes the majority of its income from subscription fees rather than advertising). Meanwhile, in the broadcast world over the past 13 years, the ad-dependent networks have played a mass-appeal game that has bequeathed to us populist entertainment with little chance of winning a best actor statue, including five Law & Order's, three NCIS's, and infinity reality shows.

[snip]

This idea runs bigger than television and subscriptions. When you see a tower of unread New Yorker magazines spilling out of a bathroom wicker basket—or when you look at the November calendar page and realize you haven't been back to the gym you've paid since January—you are witnessing the virtues of a business model that charges us for our ambition rather than our behavior.