Why HBO Passed on ‘Lord of the Rings’ TV Show, Which Was Scored by Amazon

HBO wasn’t interested in bidding for the TV adaptation of J.R.R. Tolkien’s “The Lord of the Rings” epic, according to CEO Richard Plepler, because it already has a big-budget fantasy franchise — “Game of Thrones.”

Plepler, speaking at Business Insider’s Ignition 2017 media conference Wednesday in New York, noted that HBO has five separate “Game of Thrones” prequels in the works and that the company was not coveting another massive cut on the fantasy genre.

“I’d rather own our IP [intellectual property] 100%… and I’d rather have the ability to work with a product that is inextricably linked to our brand,” the HBO boss said.

Amazon earlier this month officially announced a multi-season production deal for the “Lord of the Rings” television series. Plepler, asked about the nearly $250 million price tag reported for the project, quipped, “If I’m Jeff Bezos, that’s Monopoly money.”

Plepler also noted that Warner Bros., HBO’s sister company at Time Warner, will get a piece of the action from the “Lord of the Rings” series, as it will be co-produced by WB’s New Line Cinema division.

So what’s the next big show for HBO after “GOT”? HBO has made several creative bets, Plepler said, some of which may be hits. But nobody can predict if a show “will hit the zeitgeist like ‘Sopranos’ did, like ‘Game of Thrones’ did,” he said. He added that HBO’s sci-fi series “Westworld” averaged around 13 million viewers in its first season, which was double what “Game of Thrones” pulled in its first year.

With Netflix set to spend up to $8 billion on content next year — some four times HBO’s programming budget — HBO will compete by focusing on continuing to build a brand that stands for “curated excellence,” Plepler said.

“The best brand ambassadors for HBO are the talent,” he said, citing Nicole Kidman and Reese Witherspoon of HBO’s Emmy-winning “Big Little Lies” and Robert De Niro, who played Bernie Madoff in “The Wizard of Lies.”

HBO has been able to grow subscribership on both traditional pay-TV and the standalone HBO Now service, which first launched in the U.S. in 2014, without the latter cannibalizing the former, according to Plepler. Over the last 18-24 months, he said, the programmer has cut new deals with pay-TV distributors that gives them incentives to sign up more HBO subscribers in order to get lower effective wholesale rates.

“We’re on track for our biggest year in history in terms of subscriber and revenue growth, and see that revenue growth just increasing over the coming years,” Plepler said, although he declined to provide actual numbers.

In the coming years, Plepler is eyeing international markets as areas of further potential growth. The premium cabler has rolled out versions of the direct-to-consumer service in 39 countries, including Spain, Brazil, Mexico, Argentina, Denmark, Finland, Norway, Sweden and seven countries in Central Europe. (With the exception of five of them — the Nordic countries and Spain — those territories also have traditional HBO pay-TV service.) In 2018, Plepler said, HBO will analyze on a market-by-market basis whether to launch standalone over-the-top services in more countries.

AT&T — which is in the process of acquiring HBO parent Time Warner, pending the Justice Department’s antitrust lawsuit — offers HBO for no additional charge to wireless subs on unlimited plans. Plepler pointed out to BI’s Henry Blodget, who interviewed him at the conference, that while HBO is free to AT&T wireless customers the telco pays HBO for those users. Blodget said he has an HBO account through AT&T and also subscribes to HBO through his pay-TV provider, and asked if that means the programmer gets paid twice. “Yes,” Plepler replied, adding, “Thank you.”

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