The brand is gold-plated, the most valuable and venerable in all of television.
The corporate culture is renowned for its emphasis on excellence and innovation. The senior managers are the exec equivalent of the 1927 Yankees, a formidable team that has, for the most part, worked together for more than two decades.
But as important as those factors are in HBO’s success over the past four decades, leaders of the global TV powerhouse try to never lose sight of a humbling truth: The soul of the brand lies with the writers, directors, producers, actors and performers who bring their talents to HBO’s air.
“It is very fulfilling to see the results of our creative partnership with so many extremely talented people recognized” by viewers, critics and the showbiz community, says Bill Nelson, HBO’s chairman and CEO. “It is superior original content that has brought us to the leadership position we enjoy. None of it would have happened without the most talented members of the creative community choosing to bring their passion and their projects to HBO.”
Not that it’s a hard sell to get creatives sign up with HBO. But it is crucial that the company remain laser-focused on the quality and distinctiveness of its original programming, execs say, because that is the engine of its growth potential.
HBO is the only domestic premium TV service to have a thriving international channels business, thanks to the exportability of signature hits, such as “Entourage” and “True Blood.” Today, the company boasts a global base of 80 million subscribers, encompassing its U.S. HBO and Cinemax multiplex offerings plus its premium services in Latin America, Central Europe and Asia. HBO programming reaches many millions more through distribution deals in some 60 countries.
The company, which will mark its 40th anniversary in 2012, has long been on the leading edge of harnessing alternative distribution platforms like video-on-demand and, most recently, broadband with its nascent HBO Go service.
You might say HBO was TV’s original alternative distribution platform. What started as a rebel division within publishing giant Time Inc. has come a long way since its first original entertainment offering: Highlights of a 1973 polka festival in Allentown, Penn.
“HBO is really the only TV brand where the viewer is making a decision to purchase it every single month,” says HBO co-president Eric Kessler, noting that HBO is the undisputed driver of subscribers’ premium channel purchases for cable, satellite and telco providers. (To wit, very few viewers subscribe to Showtime or Starz without also taking HBO.)
“We’re the ones that make consumers ask themselves whether our programming is different and high-quality enough that they’re willing to pay for it,” Kessler says. “The challenge is to maintain the strength of that brand, so that the value of HBO becomes greater than ever. I believe that the collection of programming that we’re offering now and what we have on the drawing is stronger than at any point in our history.”
Nelson and his top lieutenants — Kessler, co-president Richard Plepler and president of programming Michael Lombardo — ascended to their posts in June 2007, when HBO was in a time of transition and some turmoil, internally and externally.
“The Sopranos” had just wrapped its storied run, and some of HBO’s new programs at the time were striking out with viewers and critics. And then came the jolt of Chris Albrecht’s abrupt departure as chairman and CEO following an altercation with his then-girlfriend in Las Vegas.
Time Warner CEO Jeff Bewkes bet on the underlying strength of the HBO culture — an ethos he helped shape during his own tenure as HBO boss — in tapping Nelson, Kessler and Plepler to fill the sudden void. The three men had worked shoulder-to-shoulder for years, with Nelson rising through the business and operations ranks starting in 1984; Kessler coming up through marketing and sales since 1986; and Plepler shaping the brand image via corporate communications since 1991.
The bar for the new regime was incredibly high, a testament to the heights that HBO had crested. The trio and their lieutenants, many of who also have 20-plus years at the company, worked hard to maintain a spirit of collaboration and risk-taking in developing the next generation of great series and telepics.
During the past two years, they’ve delivered with such notable series newcomers as “Boardwalk Empire,” “Treme,” “True Blood,” “Hung,” “Bored to Death,” “Flight of the Conchords” and “The Ricky Gervais Show,” as well as longform fare ranging from “Temple Grandin,” “You Don’t Know Jack” and “The Pacific” to “Grey Gardens,” “John Adams” and “Recount.”
“I think all of us together have built a great culture,” says Plepler. “We have a shared vision about where we are going and what we need to do to succeed. Believe me, there is no danger of complacency setting in with this team.”
Nelson sounds like the military veteran that he is (infantry in the 101st Airborne Division in Vietnam) in emphasizing the benefits of the remarkable stability among HBO’s core exec team.
“We all instinctively know the strategy. We know how to execute,” he says. “The mission is the same. We are operating in a culture of success.”
Looking ahead, Kessler notes that HBO’s businesses are well-positioned to capitalize on its increasingly global profile, especially in markets such as Brazil, where the pay TV biz is still in its infancy. Closer to home, the growth of video-on-demand and broadband distribution is making it easier for subscribers to watch HBO when and where they want — so long as they continue to subscribe through a traditional provider.
This shift to an anywhere/anytime approach to program distribution is definitely good for business, Kessler says.
“The greater access you give to the content, the more people use it and the more satisfied they are with the service,” he says. “For us it’s all about extending the subscriber life cycle. These new platforms present the opportunity for us to reach our subscribers in different ways.”
As HBO looks to its future, its leaders remain mindful of its early milestones, and how it took a good deal of derring-do to make the service into the money-minting, aesthetic force that it is today.
Plepler, who was recruited to HBO out of the world of politics and consulting by Michael Fuchs — Bewkes’ predecessor as CEO — fondly recalls the moment in the early 1990s when “The Larry Sanders Show” started to permeate pop culture.
“We saw that if we made something with a genuinely original voice, you could have enormous impact, even though at the time we were in only about 19 million homes,” Plepler says. “That the show could have such resonance culturally was a very interesting indicator to us. It told us that we could punch above our weight.”