When the pay-TV service Home Box Office debuted on a stormy night in the fall of 1972, its future hardly looked promising…or even assured. On the service’s opening night, HBO had less than 400 subscribers on a single cable system in Pennsylvania. They were treated to a hockey game and a two-year-old movie that had been a box office stiff. Due to technical difficulties caused by the storm, the opening night almost didn’t open at all, and nobody in the fledgling company even liked the name: Home Box Office.
Nor were there any particularly auspicatory signs of future success. By 1972, there was already a rather tall scrap heap of failed attempts at pay-TV dating back decades, and much of HBO’s own research confirmed the then oft-repeated adage that trying to get people to buy TV (after almost a quarter of a century of free broadcast programming) would be like trying to get people to buy air.
Flash forward forty-odd years and HBO is the largest pay-TV service in the world – that’s right, not just America, but the world, with a truly global subscribership of over 114 million here in the U.S., in Europe, Latin America, and the Pacific Rim; over $3 billion in annual sales; and a name – that same name even the company’s founders didn’t much care for – that’s one of the most recognized brands on the planet, right up there with Coca-Cola.
Between that rainy night in 1972 and today there have been a half-dozen predictions that the company had had its day, and, indeed, HBO has had its bad times, its missteps, its flat-out failures. And, certainly, it’s no longer as unique and novel as it was in its early years… as HBO pivots into HBO Max and joins the streaming revolution.
HBO is still here, showing a remarkable resilience and ability to re-think itself and adapt to changing environments. And, it still produces some of the most acclaimed and provocative programming on the ever-expanding cable spectrum: shows like True Blood, Girls, and Game of Thrones.
But the most notable thing HBO did – and the thing that probably gets most overlooked – is that it changed…everything.
HBO has, in its four decades, become such an institution, it’s hard to remember what the entertainment landscape looked like pre-HBO. An entire generation has grown up with cable TV as the norm, and, if those kids were brought up in the areas where HBO first started, there’s a reasonable chance their parents grew up with HBO, too. Nineteen-seventy-two was a different world, and offered a media universe anybody under 30 might view as so monumentally different from today as to be alien. Nearly all of the changes that followed owe something – either directly or indirectly – to the success of HBO.
The service changed television, was largely responsible for the birth of the modern cable era, reconfigured the motion picture industry, and stoked an appetite for home entertainment and alternatives to Old Media pipelines sparking everything from home video to Internet TV.
Yet, despite numerous articles, references in other works, and even a collection of scholarly essays, there’s not a single public, published, full history of the company. The biggest thing to happen to television entertainment since the launching of the commercial broadcast era in the late 1940s has been remarkably undocumented.
It’s time to tell that story. Long past the time, actually.
HBO is worth the look for succeeding where so many others failed, for its ability to survive and remain relevant through its talent for reinvention, and for being such an integral factor in shaping what we watch and hear for entertainment, and how we watch and listen to it.
In the interest of full disclosure, I admit I’m biased. I worked there for 27 years. While HBO’s track record is hardly immaculate, I was impressed from my first day as an employee – and remain impressed even as an ex-employee – at the sheer tonnage of smarts contained in that cube of green glass on the corner of 42nd Street and Sixth Avenue in Manhattan. Even after being shown the door, I still think it’s a story not only worth telling, but one that deserves to be told.
In the coming weeks we’re going to take a journey and retrace how the world’s first and most successful subscription television service came to be, how it does what it does and why. Actually, we’re going to go back even further, before the beginning, because to appreciate the revolutionary quality HBO had in 1972, you have to understand what the service was rebelling against. HBO didn’t spontaneously combust in a vacuum; it was then the latest chapter in the history of a medium that had yet to discover its full potential. And to understand that, you have to understand how the status quo got to be the status quo.
“Television is going to be the test of the modern world…we shall discover either a new and unbearable disturbance of the general peace or a saving radiance in the sky. We shall stand or fall by television — of that I am quite sure.”
E. B. White
Perhaps it began with a puff of smoke.
Some early brand of homo sapiens had something he wanted to say, and felt compelled to have a lot of his prehistoric colleagues hear it. So, he grabbed himself his mastodon pelt blanket in one hand, his sparking flints in the other, trudged up the nearest high hill, made himself a fire and started flapping the blanket making smoke signals visible for miles around.
And here, a few milennia later, are his somewhat better postured and less hairy kin still working from the same agenda. Instead of a blanket and flint, though, they have TV studios and uplink facilities. Instead of a high hill, they have transmission towers or — the highest “hill” there is — satellite transponders. Instead of smoke, they have electronic signals. Instead of a range of a few miles, they can reach entire continents simultaneously.
Then again, perhaps it didn’t start that way at all. Who knows? Cable television only arose less than 70 years ago and no one’s quite sure how, where, and by whom that started!
The point is that since members of humankind first began communicating with each other, they had been looking for ways to speak to larger and larger numbers of their kind at the same time either because of some compelling need to widely share their thoughts, or because it’s a more cost efficient way of selling soap. In either case, you can only shout so loud and then you have to start looking for a more far-reaching vehicle. Say smoke signals, or satellite transmission. Or Facebook.
There was a philosopher who said that when you look back over the course of your life, it looks like a smooth progression of events with one thing leading naturally to the next in a neat line that ends at the present, although when you were going through those same events they seemed chaotic, random, unplanned. The progression from our hairy little ancestor beating out a message in puffs of smoke to satellite transmissions that can blanket entire continents may similarly look connected by a series of gradual and logical steps. However, that smooth technological evolution only exists in retrospect. Backtracking from the advent of HBO, the pay service seems like an inevitability. It was anything but. Television technology — like any other technology — progressed in fits and starts, often through technological three-cushion bank shots, with developments that were often directed towards one goal but wound up somewhere else. The launch and eventual success of HBO was no different.
Back in the early 1800s, when the Baron Jons Berzelius isolated selenium, he didn’t do it because he had envisioned television as an end product. There was no great concerted plan to “discovering” television any more than there was a plan for what to do with it when it finally did find its way into being. With deceptive simplicity, radio and TV personality Gene Klavan succinctly put it this way in his book, Turn That Damned Thing Off: “…there never was a game plan for TV; it grew as it grew.”
However television started, and however it grew, it’s here. In fact, it’s everywhere.
Its images transcend the limitations of literacy and its signals respect no national or cultural barriers. Satellite carriage and portable receiving dishes make television reception possible anywhere on the surface of the earth; on any continent, any island, from pole to pole, and mobile uplinks mean that signals can be transmitted to a global audience from anywhere with equal ease. During the Gulf War of 1990, Saddam Hussein regularly tuned in to satellite transmissions of CNN to find out what was going on outside of Iraq. Michael Fuchs, one-time Chairman and Chief Executive Officer of Home Box Office, believed views of a comparatively opulent West that East Europeans saw in bootleg videotapes and pirated satellite signals during Cold War days helped fuel their discontent with their lot under Communist regimes. TV knows no walls.
Up until the rise of the Internet, television was the dominant carriage of information from one place to another throughout the world for a good 40-50 years. More than film, radio, or the printed word, television had become, during the post-WW II era, the global population’s principal source of information and entertainment (and, for older demographics, it’s still a first choice over the Internet). It’s still the best way to reach a mass audience in one, fell swoop.
In the United States, a hardcover book can reach the best-seller list of the New York Times with sales measuring in the tens of thousands. A top rock album goes gold with sales of a hundred thousand. A motion picture hits the all-time box office hit list with ticket sales of over $200 million which translates into maybe 20-30 million ticket buyers — many of them repeat viewers — over a period of 1-4 months.
But, with at least one television set in 98% of all American homes (believe it or not, there are still people who either can’t afford a set, or — having decided TV is a brain-draining, soul-sapping, addictive, corrupting distraction and a fundamental evil — voluntarily elect not to have one), a Number One prime time television show will be viewed by 20-30 million or more families in the space of one evening!
Prior to an era of Wikileaks and YouTube-worthy faux pas, TV was usually the instrument that made — and just as often broke — political reputations, entertainment careers, fashion trends, sometimes through one season of a hit show, sometimes through televising a single event. In some judgments, Richard Nixon lost the presidential election to John Kennedy because young, vibrant JFK looked so damned good on TV during their 1960 televised debates…and sweaty, jowly Nixon and his persistent five o’clock shadow looked so damned bad. To others, Oliver North’s earnest appearance during the 1987 televised Iran/Contra hearings transformed him from lawbreaker into a patriotic hero.
For all its impact on society, television itself has never been immutable. If television has changed the kind of people we are, television itself has also been changed…and continues to change. The medium has evolved through the HBO-sparked ascendance of cable-carried television and along with it has evolved both the public and the industry’s concept of what television can and should do.
Somewhere around 95% of American homes are within reach of a cable hook-up, with, according to website Advanced Television, a little over 60% of homes actually subscribing (the Television Bureau of Advertising estimates another 30%, give or take, get pay TV through satellite subscription). Where the typical urban TV viewer might have previously received a half-dozen broadcast channels 30 years ago, the average — mind you, this is only the average — cable system offers over 100 channels carrying programming ranging from the latest Kardashian spin-off to live coverage of the U.S. House of Representatives.
In many ways, Home Box Office — which launched the modern cable era — has been a refutation of what had been the driving philosophy behind television since the late 1940s. It didn’t attempt to reach the largest audience, it didn’t try to please the largest numbers of people as much of the time as possible, and most critically, it asked people to pay for something they’d been getting for free. It was everything that television — so the mindset of its early years went — was not supposed to be. And in that, it created a niche audience programming template still followed today all across the cable spectrum.
Towards Felix the Cat
“Invention breeds invention.”
Ralph Waldo Emerson
When we climb into the family car we don’t think too much about it. We slip behind the wheel, turn the key, are happy it starts, and off we go. If we think about cars in a more expansive sense, it’s probably not all that expansive. When we start musing about how the old clunkers our parents used to drive evolved into the nifty little numbers with their sleek “airflow design” that we’re driving now, our musings probably don’t go very far. Our idea of automotive history may only extend back as far as Heavy Chevies from the ’50s, or maybe Model Ts from early in the century.
What we don’t think about are all those years and lines of unrelated research that eventually crossed and produced what we know of as a car. We don’t think of all the time, experiments, and theorizing that went into the development of the internal combustion engine (which eventually became the car’s power plant), or the development of vulcanized rubber (for the tires), petrochemicals (the plastic interior door handles), electronics (that mess of wire spaghetti inside the dashboard), wireless transmission technology (for the radio), refrigeration (for air conditioning), aerodynamic design (which is why so many cars these days all look alike), refractive lenses (for the headlight glass), or the experiments in electricity that produced the arc welder that’s used to do the spot welds that hold a car together. And let’s not even get into Global Positioning Systems and satellite radio and — … Well, you get the idea. What’s worth remembering here is that it’s a cinch that the fellow who dabbled with refractive lenses however many centuries ago (and it is centuries; Webster cites the year 1603 as the birth date of the word “refraction”) didn’t do his dabbling with automotive headlights in mind.
For every invention that we think of as having been sprung on mankind overnight, there lies behind it a long, little-known, meandering history of organized research, workshop puttering, and seemingly unrelated dabbling. Television’s no different.
Oh, there was a point at which the idea of television became clear in the minds of a number of tinkerers and inventors as something to aim at, but the components they would use to bring that idea to fruition had already been laying around for quite some time and many of them hadn’t been developed with the specific goal of TV in mind.
This is all by way of saying that if you’re looking for a birth date for TV, it gets a little hard. It depends on what you consider the beginning. It depends on what you consider TV.
It could just as well have begun with our Paleolithic friend from the Introduction, or it could have begun with another acquaintance from those pages, a Swedish chemist by the name of Baron Jons Berzelius.
The good baron isolated, for the first time in 1817, the element selenium. Because of its luminescent properties, selenium would later be used to create visual images in the early days of TV development, but at the time, all the baron was interested in was chemistry and physics.
Or, you could say things started rolling twelve years later when Michael Farady demonstrated what was, essentially, a primitive vacuum tube. Farady didn’t know it at the time, his main interest being simply to figure out how electricity worked, but the vacuum tube would be what made TVs and radios run before the transistor came along well into the next century.
Then there was Englishman Sir William Crookes who came along in 1878 with his development of something called the Crookes Tube. Crookes was another fellow interested in figuring out how electricity worked. He didn’t know that his work produced the first cathode-ray tube which is what served as a TV picture tube in the pre-flat screen era.
For those of you old enough to remember (or who might still have) a cathode TV screen, if you get your face right up to it, you can see the picture is made up of little pieces called “pixels”. The above gentlemen are just a handful of the pixels that compose the entire picture of the history of TV. The other pixels range from American inventor Philip Carey — who first used the “photoelectric effect” to transform pictures into various intensities of lights — to giants like Edison and Marconi, all of who laid down the early (and usually inadvertent) steps that led to television.
There was a point when the progression to television became inevitable because whether out of ambition, or sometimes simple curiosity (i.e. Berzelius, Faraday, et al), people are always looking for The Next Thing. When Samuel Morse invented the telegraph in 1835, it was the natural Next Thing to find a way of getting the human voice from one place to another by wire instead of just dit-dit-dit dah-dah-dah dit-dit-dit (Morse’s code for SOS). Alexander Graham Bell took care of that with the telephone. Once people started talking to each other over a distance, The Next Thing was, naturally enough, to get visual images from one end of the wire to the next.
Prior to 1884, fellows like Carey had managed some sort of visual transmission though one wouldn’t call it a picture, really. Carey and his fellow tinkerers could get a set of selenium photoelectric cells to transform a picture into various shades of light and then have that pattern repeated by another set of cells at the other end of the line, but it was hardly a representative picture.
If the successful transmission of an honest-to-God picture is what you’d consider TV’s birthday, then 1884 it is. Paul Nipkow was a German engineer who devised a way of transmitting a picture electrically for the first time with what he called his “mechanical scanning” system. This was not a moving picture, mind you, nor was it even a particularly good still Image in terms of quality, but it was a start.
Up until the 1920s, Nipkow’s scanning process was the basis for most television research. Then, along came a young Idahoan with the kind of name that usually gets you beaten up in school: Philo T. Farnsworth. Farnsworth was, besides being impressively bright, also incredibly precocious; he first laid out his idea for true electronic TV (no more mechanical scanning; it was TV like we know TV, more or less) on his high school chemistry class backboard in 1922. Within six years, young Farnsworth had created the first two-dimensional picture on his receiver.
Farnsworth gave TV researchers the key; now everyone interested in The Next Thing knew basically how TV worked. The next Next Thing was to make it work better.
By 1930, General Electric had shown off a prototype for the first home television receiver; Bell Telephone Laboratories had demonstrated a prototype for the first color television; the first variety show, first remote news report, and first TV drama had been aired by experimental TV stations; and a General Electric experimental station in Schenectady, New York had begun making regular broadcasts to the handful of equally experimental receivers being made available.
Of the significant developmental events which occurred during those eight years following young Farnsworth’s high school chalkboard doodling, a particularly significant significant event was the opening of an experimental television station in New York City. The year was 1928 and the first broadcasts of RCA’s W2XBS consisted of a small Felix the Cat (look him up, kids) statuette spinning round and round on a little turntable.
Granted, it wasn’t much of a show, but, then again, it wasn’t intended to be. Felix’s hours under the bright lights were to provide a subject for reception tests made by RCA (which was owned by GE) engineers in their very own homes scattered around the New York metropolitan area. Putting it more simply, the idea here was to answer the question: Is this gonna work?
The answer to that question was an obvious yes, but the technological demonstration of the practicality of broadcast TV was not what made Felix’s twirling notable. The importance here is tied to the fact that two years earlier RCA had formed the National Broadcasting Company for the purpose of distributing radio programming. The Felix broadcasts had now put NBC in the television business as well. The TV network was born; The Next Thing had arrived.
“We…repeatedly enlarge our instrumentalities without
improving our purpose.”
There’s no telling how much earlier commercial television would’ve been on the air if the early developmental days of the medium hadn’t had to suffer through two of the century’s more cataclysmic events, the first being The Great Depression.
TV technology development was the preserve of large corporations with large bank accounts. By this time, all the new gizmos required to make TV work simply cost too much for people like Philo Farnsworth to do the work in their backyard workshops. But, the Wall Street Crash of 1929 dried up enough of those corporate assets to slow the development of television (and nearly everything else in the world) considerably.
Slowed, but not stilled. Experimental stations still sprung up here and there, and broadcast technology inched its way along the road to improvement. Despite The Depression, by 1938 the DuMont home receiver was rolling off of assembly lines to become the first all-electronic TV set on the American market. Granted, there wasn’t a whole lot to watch with it, but TV had finally come to the American public. But, whatever momentum TV was building was stalled again, this time by something even bigger than The Crash: the Second World War.
TV didn’t exactly go into hiding for the duration. In fact, it was during the war years that commercial television was born. Although America had yet to get directly involved in the war, most of Europe had fallen to the Germans and the Japanese were fighting it out with the Chinese and British in the Pacific when, on July 1, 1941, the New York transmitters of NBC and CBS were licensed for commercial broadcasting. Half a year after Pearl Harbor, a third network, this one produced by DuMont, was also broadcasting out of New York.
Up until now, TV’s development bills had been entirely picked up by its developers. That started to change in 1942 when TV began to earn its keep. That was the year Bulova Watch bought itself a 15-second voiceover promotional spot on one of the nets; the first TV commercial.
The three networks produced approximately 30-40 hours of programming per week in those days although little of it resembled what we usually think of as typical television programming. The networks covered everything from opera to military maneuvers and political conventions, but few people cared. By then, the attention of the public — and the electronics and media industries — was on the war, and TV remained a gawky fledgeling with only 7,000 sets in use in the New York area, and even fewer in the small number of other cities with transmitters.
After the hardship years of the war, the post-war 1940’s were a prime time for a new form of entertainment and it did not take long for the new business to regain its momentum. Nineteen Forty-Eight saw the debut of yet another network: the American Broadcasting Company. By then, there were somewhere around 500,000 TV sets glowing in the night across the country. In the fall of 1951, NBC became the first network to establish coast-to-coast operations, feeding 61 stations around the country. By 1954, more than 26 million American homes were tuning in.
With NBC, CBS and ABC on the air (DuMont would fold its tents in 1955) and broadcasting across the country, the general outlines for commercial broadcasting as we know it today were in place. The three nets would sit at the top of the television heap virtually unchallenged for nearly a quarter of a century.
In the Beginning Was the Word — Radio:
“I like doing radio because it’s so intimate. The moment people hear your voice, you’re inside their heads, not only that, you’re in there laying eggs”.
We can watch TV — or movies, YouTube videos, play videogames, exchange video phone calls — from anywhere and everywhere: on line at McD’s, from our seat on our commuter bus or train (usually annoying the hell out of the napping business professional next to us), even from a toilet stall (crass, I grant, but I’ve seen — , well, ahem, I mean, I’ve heard it done). It’s nearly impossible for a generation growing up immersed, submerged, and buried in portable visual media to imagine the magnetic hold radio had on its audiences back in its early days. Think about it, all you smartphone and ipad users, wi-fiers and Hopper subscribers: there was a day when the peak of electronic home entertainment consisted of the family sitting together in the living room in the evening staring at a wooden cabinet whose sole visual attraction was a glowing dial (check out Woody Allen’s Radio Days  to get some idea of the pop culture role radio had at its peak).
Emmy-winning writer/producer/director Bill Persky recalls for us what it was like growing up during the Golden Age of Radio:
The magic of radio, the miracle of radio, mostly because it was so amazing that such a thing could exist: this was at a time when everyone stopped to look up every time an airplane flew over. If you were lucky, there was one telephone in the house — or else you had to run down to the candy store when they sent someone up to tell you you had a call on their pay phone. Hard to believe it has all come so far and I have lived it.
The radio was like an electronic fireplace where the family gathered together to share the comfort of the after-dinner shows: “Fibber Magee and Molly” with its hall closet that used every sound effect known to man when it was opened, a moment you knew was coming but still delighted in anew; dramas like “Lux Radio Theater,” “Mr. First Nighter,” “Grand Central Station,” all featuring big Hollywood stars, right in your living room. It was a time when we expected less, and appreciated more.
Then there were the afternoon serials, fifteen minutes of adventure with “Terry and the Pirates”, “Captain Midnight,” “Buck Rogers,” “The Green Hornet,” and all the magical stuff you could send away for: decoder rings, belt buckles with secret compartments, silver bullets from the Lone Ranger, all for ten cents and a Silver Cup bread wrapper.
But mostly there was the part imagination got to play: it wasn’t all there in front of you, so you created your own pictures and that made it all more personal. We played those characters in our games, and since no one knew what they looked like, any one of them could be me.
Radio was personal.
Let’s see the Hopper top that.
* * * * *
Whether you talk about what the networks put on the air, how they did it, or even how the business end of their business worked, network television was, essentially — at least in its early years — just an extension of network radio.
RCA had created the first broadcast network — for radio — in 1926. This was a smart move for RCA since one of the things they built was radios. Creating a broadcast network gave people who bought their radios something to listen to, and having something to listen to gave people a reason to buy RCA’s radios. So, the National Broadcasting Company was formed ultimately producing two networks — the Red and the Blue — to distribute radio programming (NBC would later sell the Blue Network to Edward J. Noble in 1943 who used it as the foundation for ABC).
RCA had a competitor in the radio business; a phonograph and record manufacturer by the name of Columbia which was not about to allow RCA free sway over the new medium. Similarly to RCA, Columbia wanted a radio network to interest people in their products. A Columbia radio network would allow people to hear the music on Columbia records which gave them a reason to run out and buy those records along with Columbia phonographs on which to play them. Consequently, Columbia formed the Columbia Phonograph Broadcasting System which debuted in 1927 (the “Phonograph” part was soon dropped).
The radio business was supposed to cultivate a growing customer demand for radios and records and record players which meant revenue for RCA and Columbia. As for the nets themselves, their income came from advertising.
It worked like this. The nets would solicit a “sponsor” for each program they aired. Each sponsor would put up a certain amount of money in order to advertise its product during the show. In many ways, the show became the property of the sponsor.
Radio back then didn’t even remotely resemble what we get today, whether we’re subscribing to Sirius channels, using our IHeartRadio app, or trying to find a decent tune on our car set. Radio of the 1930s and ’40s was not only as popular as TV is today, but was programmed a lot like it as well. There was, naturally enough, recorded music, but there were also variety shows, game shows, news, talk shows, children’s programs, soap operas, cop shows, Westerns, dramas, and situation comedies (sitcoms).
Now if all of this looks a little familiar, it’s because television networks were launched by radio networks who lifted the TV network system directly from radio. As a matter of fact, the networks not only produced the same kinds of shows for TV that they’d produced for radio, they often took those very same shows from radio and put them on TV.
Sometimes the radio show went to TV in one piece, such as with The Jack Benny Show and Dragnet which made it to The Tube with their entire casts intact. Other times, as with Gunsmoke, certain “considerations” had to be made in the change in mediums such as having the muscular James Arness play Marshall Dillon instead of the radio program’s roly-poly William Conrad. All told, approximately 200 radio shows wound up making the trip to television (even Candid Camera — the great-great grandfather to shows like Punk’d — started out on radio as Candid Microphone!). In fact, a number of these programs survived as both radio and TV series for a period of time until the popularity of radio fell too low to justify keeping the radio version on the air.
One of the major reasons the DuMont network died was because it didn’t have a radio network. The TV nets’ radio counterparts helped pay the bills until their TV siblings could stand on their own legs (1949 was the last year of red ink for the TV nets; the following year they grossed over $90 million in ad revenue — close to $300 million in today’s dollars without accounting for changes in ad rates — and income would grow steadily into the 1980s), provided them with already in-place sponsors, talent and affiliate relationships, as well as a technological base. Not having a radio net also deprived DuMont of launching TV shows which had already developed solid audiences as radio programs. Lacking all these assets, having to start from scratch when the other nets had a head start going back to radio in the 1920s, DuMont could never catch up.
New York City became the hub of TV network broadcasting. Since the radio networks had been based out of New York, the new TV networks could easily piggy-back their transmission requirements onto the radio technology already in place. The New York locale also gave the networks access to the city’s stage community. Stage-trained performers — with their by-necessity strong vocal talents — suited the needs of live television better than the West Coast’s screen talents.
The sponsorship system made the trip to TV, too. With the present format of TV advertising, another hard-to-imagine task for us is picturing how close the tie between sponsor and program was in those days.
The cast of a show were, in practice, spokespersons for the product, and the show itself was as much a vehicle for product promotion as it was for entertainment (for those of you who bridle at the practice of “product placement”; gang, you don’t know what product placement was until you look at sponsored TV). In fact, some shows were actually created not by the networks, but by the advertising agencies representing a particular sponsor. Individual programs were identified with specific products i.e. Death Valley Days with “twenty mule team” Borax detergent, and The U.S. Steel Hour with — can you guess? — U.S. Steel.
This buddy-buddy arrangement proved a headache in the re-run market. By way of example, an enormous banner for De Soto cars (one of those cars you — and even your parents — are too young to remember, like the Nash and Studebaker) used to hang over the stage — and well within camera range — of Groucho Marx’s game show, You Bet Your Life. Years later, when the program was syndicated, the banner had to be optically cropped out of every program in deference to the new advertisers (as well as the fact that De Sotos had gone the way of the dodo).
The close arrangement between sponsor and program could also create headaches for the creative team behind a show. The sponsors held veto power over casting, the hiring of writers, directors, etc., and even over content. One of the apocryphal stories about the early days of TV concerns a drama about the Holocaust which featured Jews going to the Nazi gas chambers. According to the tale, the sponsor of the drama happened to be a gas company and objected to the use of gas chambers in the program and the writer was forced to change it to firing squads (you can see this story dramatized in Martin Ritt’s 1976 film about ’50s TV, The Front).
The power of the sponsor was such that it could even keep a show on the air that had a limited audience. In those days of McCarthyite paranoia, I Led Three Lives was the only TV series dedicated to the super-patriotic endeavor of exposing alleged Communist conspiracy and infiltration. Unable to find a network slot, the series lived only in syndication but was kept in re-runs well into the 1960s because the companies sponsoring the show — the kind of outfits that had the most to be paranoid about re: anti-capitalist thinking i.e. utility companies, banks, oil and steel companies — thought keeping it on the air was a “public service.”
This system of TV advertising eventually evolved into what we have today thanks to Sylvester “Pat” Weaver. Pat Weaver was the head of NBC in the late 1950s and he noticed that magazines made their money not by selling sponsorships, but by selling advertising space. From their example, Weaver got the idea of a network selling its own kind of advertising space and that’s pretty much what we have today.
The way it now works is that the advertiser rarely buys the time directly from the network at all. Ad agencies buy network time in bulk, then they sell the time as part of the advertising strategy they’re forming for their clients. Rather than sponsor an entire show, individual 60-second spots (this used to be the standard, but 30-second and 15-second spots are par now) are bought at strategic locations throughout the day and week.
Now this topic of TV advertising brings up the very interesting subject of ratings. You can’t discuss TV and not talk about ratings. Ratings deserve their own little discussion because they are to commercial television what air is to people. The same thing happens to a TV show that doesn’t get enough of a rating that happens to a person that doesn’t get enough air; it dies.
The Numbers Racket:
Do not put your faith in what statistics say
until you have carefully considered what they do not say.
William W. Watt
The nets don’t just pull a price out of their respective hats for their advertising time. Advertisers are paying for viewers’ attention. They want to know if they’re getting their money’s worth and the only way to do that is to know how many people are watching. This need has always been so imperative that as early as 1949, just one year after the third network — ABC — went on the air, and even before any of the nets had begun coast-to-coast operations, a regular ratings system was in effect.
Rating broadcast programs did not start with TV. Broadcast programmers had been doing that kind of thing back in the radio days for the same reasons: so that sponsors would know who was watching what, and whether or not those numbers justified the money the sponsor was laying out. A number of TV rating systems have come and gone over the years, but today (and for quite some time, actually), the be-all/end-all of national TV ratings are those supplied by the A.C. Nielsen Company. In the nine decades since “the Nielsens” were first used in radio (the company began measuring TV performance in 1950), they have come to be programmers’ bible of success and failure. While the equipment and methodology of the Nielsens has changed over the years and is often controversial — and continues to change and be controversial — the basic principal remains the same.
The Nielsen company uses a sample of several thousand homes to represent a particular “universe” (the universe is determined by what the client requires: all TVs in the U.S., just cable TVs, just cable subscribers with premium subscription services, etc. To represent the general national audience Nielsen uses a sample of 4,500 homes). The viewing patterns of this universe are measured to determine a “rating” (how many TVs of all the TVs in the specific universe are turned to a particular show) and “share” (how many TVs of just those sets that are actually turned on are tuned to a particular show). Nielsen uses a formula involving the rating, the number of houses using television, or HUT, and the share to establish a particular show’s Nielsen standing and what an appropriate cost for a commercial spot put on the air at a particular time should be. When Nielsen looks at the cost of commercial spots, they talk about the cost per thousand, or cpms for a spot. In English, that means the advertiser’s cost for every thousand viewers watching that show.
Much of the controversy over the ratings has to do with their accuracy, and, more pointedly, exactly what the ratings measure. A Nielsen meter attached to a television set will record that the set was tuned to a particular station at a particular time, but it won’t measure whether or not anybody was actually in the room watching it (there are people who just like the sound of the TV on to keep them company), or whether or not they enjoyed what they were watching (as in, “I would’ve watched something else but everything else sucked even worse!”), and so on.
Over the years, Nielsen, along with the research departments of advertising agencies, networks, and production companies — to name just a few — have tinkered with replacement or additional technologies, but to date nobody’s come up with anything they’re completely happy with.
Back in the late 1980s, one of HBO’s senior scheduling execs once shared with me the problems with viewing measurement systems:
We started out just using meters but we wanted to know if people were actually enjoying what they were watching and how much. The meters couldn’t tell us that so we added diaries. Each metered home also got a little diary, and they were supposed to mark off what stations they were watching and when, and then there was a place to mark how much they liked what they were seeing: very much, moderately, not very much, not at all, and so on.
The problem is the families lied when they filled out the diaries. After the first few days of the month, they would get lazy and stop filling out the diary as they went along. Then, at the end of the month, when they were supposed to turn them in, one member of the household — usually the lady of the house — would fill out the diary from memory.
Well, it wasn’t so much memory, as her filling out the diary with what she wished her family’d been watching instead of what they actually watched. For instance, we’d get back a lot of diaries and there was all this PBS programming written in, but when the meter results came back, PBS ran at a near-zero. According to the diaries, no one in the house ever watched any of our Cinemax late-night adult programming, but then the meter readings came back and it turns out that was the most-watched stuff in the house.
We finally quit using the diaries.
“Ratings,” says respected TV producer Gerald Abrams, “are like dipping a dip stick in the ocean. It’s a small sampling, but so far it’s the best they can do.”
Some of the problems programmers have with ratings may have less to do with how accurate the ratings are then with how good they make a programmer look. In the 1980s, when the networks began to steadily lose audience to cable, the nets began complaining that the Nielsen samplings were slanted towards cable homes. Their point was that Nielsen’s 4,500 homes representing the national market contained a higher percentage of cable homes than the percentage nationally. That, they said, gave the nets an artificially lower rating then they should’ve gotten with a sample they considered more fairly representative.
On the other hand, the nets have their own way of artificially inflating ratings during their “sweeps.” During one week in November and another in February, the nets use the ratings from those weeks to set the standard for advertising rates for the season. But what normally happens during a sweeps week is that instead of measuring a typical week of programming, the nets load the week’s schedule with programming “stunts.” Typical stunting includes running one-time specials, pre-empting a normal night’s schedule to run back-to-back episodes of a top-rated series, airing a top-of-the-line sporting event, and so on.
One curious aspect of ratings is that they rarely have absolute value. When everybody in America tunes into one show, that’s going to be a great rating no matter how you interpret it. But, most programs don’t have that kind of unquestionable standing.
On nights when fewer people watch TV, a show can have a low rating but a high share (in English: a big hunk of a small pie) and be the Number One program of its night. On another night, one where more people are watching TV, the rating of a particular program might be higher but the share lower (a small hunk of a bigger pie). In other words, the same show that pistol-whipped Last Resort on one night can get steamrollered by Big Bang Theory on another night, even if holds the same rating because its share keeps changing. That’s why it’s just as important to schedule a show with as much consideration as it’s produced. More than one good series has been killed by putting it on a bad night at a bad time.
Obviously, ratings are very useful. They tell a network where its strengths and weaknesses are, and it does the same for people buying ad time; vital information when you’re talking about the big bucks that go into TV advertising. The cost of commercial spots can vary enormously depending on the time of day and a given show’s standing in the ratings, but even at the low end, we’re talking significant money. Prime time advertising rates average in the $120-140,000 range for a 30-second spot, but they can range — depending on the show — from low five figures to high six figures. Special events can run the cost of a spot into the rarified atmosphere of millions, with a single 30-second spot during last year’s Super Bowl costing a wallet-killing $2.4 million. All told, the broadcast nets are looking at a whopping $9 billion worth of buys for the upcoming season.
Since the nets’ business is mainly to deliver eyeballs to advertisers, if a show can’t deliver them — at least enough of them to justify the cost of the show — then that show is history. Even if it’s the best thing to show up on the tube since Felix the Cat.
At the end of each season, the networks take a fair bit of flak for cancelling good shows, but, to be fair, the nets have bills to pay. A typical one-hour network drama costs $2-5 million per episode to produce, with a season needing 22-24 episodes. That means, even at the low end, you’re looking at a tab for the season of $44 million — and that’s for a single show. A network needs something in the neighborhood of 21 hours of programming just to fill out its weekly prime time schedule. That makes for big bills!
And while the cost of making things like cars and personal computers usually goes down over time, the cost of making a series paradoxically goes up the longer it runs, at least the above the line costs do (above the line costs would be the talent costs; salaries of the stars. Below the line costs would be the actual cost of production; construction of sets, cost of studio time, etc.). If a show becomes popular, the above the line cost of stars on the show usually rises when it comes time to re-negotiate their contracts. If a performer assumes that they are important to the success of the show, they feel they have enough negotiating leverage to get their salary bumped higher. Some series have been cancelled after several years not because the ratings have fallen so much as it was no longer financially practical to keep the show on the air.
That fiscal burden falls mainly on the producer of the program; not the network. The nets negotiate per-episode fees with producers, but production costs have risen over the years (star salaries aside), and the nets, having lost a large hunk of their audience to cable, have become tighter with their money.
Most network TV programming is now “deficit financed,” which means that the shows cost so much to produce the network fee only partially covers a producer’s costs. Most producers don’t profit on a series until it goes into syndication when re-runs of a series are sold to cable and/or individual TV stations around the country. However, to successfully syndicate a program requires the producer to have enough episodes on hand so that local station and cable network program directors can “strip” the show, meaning they can run at least one episode on at least every weeknight. The rule of thumb is that a producer needs at least three seasons of a one-hour show, or five seasons of a half-hour show on hand to successfully syndicate it (although cable’s bottomless appetite for programming and niche audiences for cult favorites have provided surprisingly successful syndication opportunities for network flops like Firefly, even though the series only ran 14 episodes).
You can see why so many people are so concerned about ratings.
Even the nets would agree, though, that a sad side-effect of the ratings business is that a number of good series’ over the years have been cancelled because the millions of people who watched a particular show represented a number that was millions too low. Real life French Connection cop turned TV producer Sonny Grosso, with over 900 hours of programming under his belt, considers the numbers game and the acclaimed shows that have fallen victim to it, and says, “I’d rather be lucky than good.”
The other rather unappetizing side-effect, in the eyes of many TV critics, has been a network tendency to explore programming whose major value is the number of viewers it can attract rather than its quality as entertainment. The phrase often used to describe this practice is, “appealing to the lowest common denominator,” which is TV programming’s version of throwing chum in the water to draw sharks.
This is hardly a recent trend in network television. It goes back to Day One, something Newton H. Minow recognized when he assumed chairmanship of the Federal Communications Commission back in 1961. Minow, reflecting on where television had gotten itself in just little more than a decade, made a now famous speech to the National Association of Broadcasters in which he said:
When television is good, nothing…is better. But when television is bad, nothing is worse….sit down in front of your television set when your station goes on the air and…keep your eyes glued to that set until the station signs off. I can assure you that you will observe a vast wasteland. You will see a procession of game shows, violence, audience participation shows, formula comedies about totally unbelievable families, blood and thunder, mayhem, violence, sadism, murder, western badmen, western good men, private eyes, gangsters, more violence, and cartoons. And endlessly, commercials — many screaming, cajoling, and offending…
There hasn’t been a TV season since where every TV critic in the country, at least once, hasn’t felt obligated to quote Mr. Minow’s speech.
Television is a gold goose that lays scrambled eggs;
and it is futile and probably fatal to beat it for not laying caviar.
When people argue over the quality of television programming, both sides — it’s addictive crap v. underappreciated populist art — seem to forget one of the essentials about commercial TV. By definition, it is not a public service. It is not commercial TV’s job to enlighten, inform, educate, elevate, inspire, or offer insight. Frankly, it’s not even commercial TV’s job to entertain. Bottom line: its purpose is simply to deliver as many sets of eyes to advertisers as possible. As it happens, it tends to do this by offering various forms of entertainment, and occasionally by offering content that does enlighten, inform, etc., but a cynic would make the point that if TV could do the same job televising fish aimlessly swimming around an aquarium, it would (actually, there was something close — the old DuMont network poked a camera out a window overlooking New York City’s Madison Avenue while an off-screen voice recited poetry over the pictures, and called it Window On the World).
This isn’t because the people who run TV networks are cheap or crass (whether they are or not, well, that’s another argument). In fact, over the history of the medium, there have been network chiefs — like William Paley who headed CBS from its inception into the 1980s, and NBC chieftain in the 1980s Grant Tinker — who felt obligated to make their networks earn their money by offering as much high quality programming as they felt their networks could afford and their audiences could digest. For many years — decades, actually — quality programming was so much a part of the CBS reputation that the network was often referred to as, “the Tiffany network.” But, whether a network boss was — or is — a pure mercenary or a starry-eyed idealist about programming, all network honchos were — and still are — in the same boat.
Because TV networks broadcast over the public airwaves, the FCC keeps telling them that they have a certain amount of responsibility to the public, but be that as it may, these are still companies just like General Motors and IBM: they’re in business to make money. When they don’t make money, the stockholders and investors and board members get mad and dump the old management and then hire new managers who say they’ll make sure the company makes money, and if they don’t, they get dumped.
Commercial television has always operated on a very simple cause-and-effect principal: what makes money is putting on shows that people watch. To make a lot of money, you put on shows a lot of people will watch. Good, bad, or indifferent, and despite the legitimate squawking of TV critics and FCC guardians like Newton Minow, a lot of what has filled the network airwaves is there not solely because some tasteless network programmer put it on, but because that’s what people watched. In bulk. And often with a certain amount of enthusiasm (Whaddaya think of that, Newt?).
In the early days of commercial television, TV was something of an elitist medium — although producer Gerald Abrams might argue with the word “elitist”: “You have to remember that in the 50s, most people in American didn’t even have TV! I’m not saying it was elitist to own one, but having a TV was not a given then the way it is now.”
And understandably so, considering how much money it cost to buy one. In the late 1940s, a set could go for $150.00 or so which, figuring for inflation, would be the modern-day equivalent of somewhere around $1000 today. That In mind, it’s no surprise that in 1948, the year people usually consider the start of the modern broadcast era, there were only 500,000 sets in use in the entire United States, and by 1950, the total was still less than four million — only about 9% of American homes — with most of those sets located in major urban areas. Early programmers found themselves looking at an audience that was primarily upscale, urban, well-educated. That explains a lot of the top-end programming from those years. Josh Sapan, CEO and President of AMC Networks, characterizes the era as a “…sort of early adolescence (with) a lot of experimentation.” The hallmarks of TV’s first decade were, “Great drama, quiz shows, and shows (adapted) from the radio.”
The “great drama” included the best remembered programming cornerstone of the early 1950s; the drama anthologies like The U.S. Steel Hour, Philco Playhouse, Playhouse 90, and a host of others, many of which were telecast live. These intelligent, literate stories became dramatic benchmarks that TV critics still use to measure the rise and fall of program quality.
Even when programming began to diversify into more generally popular forms, like Westerns and game shows, programmers still had an eye on that upscale urban audience. A series like Gunsmoke packed in enough character-driven drama to be commended for its adult stories, while including enough galloping horses, punch-outs and shoot-’em-ups to keep almost everybody not interested in high drama happy.
Perhaps the measure of the kind of program quality on the nets in those days is the high caliber talents who came out of TV to go on to bigger things. There were directors like John Frankenheimer (who went on to make, among other feature films, The Manchurian Candidate , The Birdman of Alcatraz ), Franklin J. Schaffner (Patton , Planet of the Apes ), Sam Peckinpah (Ride the High Country , The Wild Bunch ), Blake Edwards (the Pink Panther movies), George Roy Hill (Butch Cassidy and the Sundance Kid , The Sting ), Ralph Nelson (Lilies of the Field ), Arthur Penn (Bonnie and Clyde , Little Big Man ), and Sidney Lumet (Serpico , Dog Day Afternoon ).
Performers who paid some of their early dues on TV included Paul Newman, Rod Steiger, Dustin Hoffman, Shirley Knight, Cliff Robertson, Jack Lemmon, George Peppard, Charles Bronson, John Cassavetes, Tuesday Weld, Jack Palance, Sally Kellerman, Robert Redford, Martin Sheen, Warren Beatty, Robert Duvall, Nancy Marchand, Lee Marvin, James Coburn, Dennis Hopper, Steve McQueen, and Clint Eastwood.
And there were the writers: Rod Serling (Seven Days in May , Planet of the Apes), Sterling Silliphant (In the Heat of the Night ), Paddy Chayefsky (Altered States , Network ).
It is perhaps another measure of the strength of some of these writers that their most notable TV work was considered worth amplifying and turning into material for the big screen. Making the trip from small to big screen were, among others, Serling’s Requiem For a Heavyweight (1962), Reginald Rose’s 12 Angry Men (1957), J. P. Miller’s The Days of Wine and Roses (1962), Tom Gries’ Will Penny (1968, based on his TV script, “Line Camp” for the series The Westerner), and Chayefsky’s Marty, the big screen version of which won the 1955 Oscar for Best Picture.
In 1950, there were almost a dozen thirty- and sixty-minute anthologies on the air, each presenting a play a week. Two were among the Top Ten series of the year. But, despite critical applause and their reputation as the cream of television, anthologies’ rankings went down as the number of TVs sold went up. By 1955, two out of three households had a TV set and anthologies had forever dropped out of the Top Ten. By 1960, when almost everybody had a TV, only three were still on the air.
Sponsors wanted programming that provided them with the widest possible audience for their advertising messages. Network programmers worked to deliver it to them. The increasing complaint among observers was that, as a result, TV programming became increasingly homogenized and escapist. In other words (or rather, in a word): blah. The 1950s were a time when the seasonal Top Twenty shows regularly included the sitcom, a format that would be the backbone of TV programming seemingly forever. In the ’50s such top-rated programs included I Love Lucy, December Bride, Father Knows Best, The Danny Thomas Show, The Life of Riley, Our Miss Brooks, and The Gale Storm Show. Whatever their relative merits, and some were better than others, these were hardly shows that plugged into the complexities and problems of what we like to refer to as, “The Real World.”
In the hunt for programming that worked, TV producers became notoriously imitative. Ernie Kovacks, a noted TV comedian of the day, put it this way: “There’s a standard formula for success in the entertainment medium, and that is: Beat it to death if it succeeds.”
Take what happened with Warner Brothers for example. Like all of the big movie studios, Warners had been seriously hurt by television. At the end of World War II, 80 million people were going to the movies every week. By 1960, only 43.5 million were still going to the movies weekly, and the number was still heading south. So, to compensate, Warners decided to get into TV production. They sold off their pre-1948 film library to finance the venture and by the time they hit their ’50s TV production peak, they were supplying one-third of prime time programming. The relevant point here is how much alike some of these Warners shows wound up looking.
There was 77 Sunset Strip (hip young private eyes working in L.A.), Surfside 6 (hip young private eyes working out of Miami Beach), Hawiian Eye (hip young private eyes working out of Honolulu), Bourbon Street Beat (hip young private eyes in New Orleans), and The Roaring Twenties (hip young investigative reporters working out of New York City in the ’20s). If they all sound a little similar, trust me as someone who grew up watching them: they were! And not just a little.
Not that there weren’t exceptions. The Many Loves of Dobie Gillis was pretty hip for its time in its look at high school teens. The series was noted for its touch of glib sophistication in the humor, a certain surreal quality to the hapless Dobie punctuating each episode by speaking directly to the audience in the shadow of Rodin’s “The Thinker” statue, and a “relevant” edge in that Dobie was the product of very working class parents instead of the picture-perfect suburbanites of Father Knows Best or Ozzie and Harriet (where, despite living in a very nice house in a very nice part of a very nice town, the family had no visible means of support — Ozzie seemed to hang around the house in his sweater all day every day). There was also the classic The Honeymooners which presented a tenement couple living in a barren walk-up with few prospects for improvement. They squabbled, fought, yelled, dreamed and failed; very much against the grain of where most 1950s series TV was going.
Producer Gerry Abrams remembers the bad and the good: “TV was all black and white in the ’50s, so besides just watching test patterns (I kid you not), people watched roller derbies (the women were the best!), and wrestling with stars such as Argentina Rocca and Gorgeous George (but also) a brand new show from NBC called The Today Show. You also had Your Show of Shows starring Sid Caesar with writers like Neil Simon, Woody Allen, Larry Gelbart, Mel Brooks, and Carl Reiner. Not bad, huh?”
Josh Sapan remembers another bit of late ’50s/early ’60s gold, one that still holds up rather spectacularly over a half-century later: “The one that stands out for me, head and shoulders above the others, is The Twilight Zone. The Rod Serling intro, which should have comforted kids by acknowledging that (the show) was made up, made (its) possibility seem more real. The characters and story were dominant v. the sci fi (elements), and the pace, casting, and directing were so different (from other shows of the time). He (Serling) was an early TV auteur, and, I think, the full package.”
Still, for the most part, America on television was suburban, comfortably middle class, and socially untroubled. Oh, and it was also generally, invariably, ideally white.
African Americans rarely appeared on early TV. Amos and Andy, adapted from the radio series, featured a nearly all-black cast but was soon cancelled in controversy over the depictions of its black characters. Blacks and whites enjoyed listening to Nat King Cole’s records, but his 1956-57 variety show was cancelled after a year of being unable to attract viewers or sponsors. Beulah was a reasonably popular series but hardly heralded equality among the races with its African American lead a maid for a white family.
Black Americans on TV were so singular, that the most singular thing about the blacks that appeared on two of producer Nat Hiken’s series’ — The Phil Silvers Show and Car 54 — was how unsingular they were presented. The parts were on par with those of most of the white supporting players and no big deal was made of their presence; they were simply “one of the guys.” Wow. Imagine that.
Emmy-winning writer/producer/director Bill Persky gives some idea of how sensitive networks could be over the most innocuous inclusion of race. In the early ’60s, Persky joined the writing stable of the hit sitcom, The Dick Van Dyke Show. According to Persky, a 1963 episode — “That’s My Boy” — sent CBS execs into conniptions. In the episode, Rob Petrie (Van Dyke) is convinced that after his wife, Laura (Mary Tyler Moore), has had a baby, the hospital gave them the wrong baby to bring home. Rob calls up the other father, has him come over to his house to confront him with his suspicions. Door bell rings, Rob opens the door and standing there is black actor Greg Morris.
“In 1963, the racial situation in the country was starting to boil over,” Persky remembers, “and making it a source of comedy was unheard of.” According to Persky, It was only series creator/producer Carl Reiner’s threat to take the story of CBS’ objecting to the episode to the press that pushed the net to cave.
“The reaction to (the episode) was amazing, and the show became a classic because it, in a small way, broke the fever that was burning up the country.”
Generally, what TV fed throughout its adolescence was a sense of peace, prosperity, and comforting uniformity which was as distorted a view of The Real World as you could have while sober. This was, after all, the decade of the Korean War, Joe McCarthy’s anti-Communist “witch hunts,” court-ordered desegregation, the revolution in Cuba, and the Kefauver hearings on organized crime.
The peaceful surface of TV-America was broken only on rare occasions. TV and radio journalist Ed Murrow tackled the McCarthy issue twice on his See It Now documentary series, and both the McCarthy/Army hearings and the Kefauver hearings were covered by television. Still, their overall impact on TV content was nil. Father continued to know best, the sheriff always got his man, and love won out in the end. The Real World received only cursory coverage on the evening news which was then only a 15-minute broadcast.
It remained for other mediums to grapple with the big issues of the day. Tennessee Williams took on America’s passions and mental foibles, and Arthur Miller exposed the failings of the American Dream on stage. On the movie screen, Pork Chop Hill (1959) was one of a number of grim films about Korea, while Edge of the City (1957) tackled racism, On the Waterfront (1954) exposed corruption in the labor unions, The Man With the Golden Arm (1955) frankly depicted narcotics addiction, and the explosion of film noir thrillers like Kiss Me Deadly (1955) reveled in post-World War II disillusionment and paranoia.
What people wanted in their living rooms was reassurance and TV gave it to them. If sponsors and programmers were pumping out the pap, well, nobody was making the millions watch. In fact, if the ratings are any judge, all those shows Newton Minow was dissing were being watched quite avidly.
Consider these Top Five lists from the 1950s:
1. Texaco Star Theater (variety)
2. Fireside Theatre (drama anthology)
3. Philco TV Playhouse (drama anthology)
4. Your Show of Shows (variety)
5. The Colgate Comedy Hour (variety)
1. Arthur Godfrey’s Talent Scouts (variety)
2. Texaco Star Theater
3. I Love Lucy (sitcom)
4. The Red Skelton Show (variety)
5. The Colgate Comedy Hour
1. I Love Lucy
2. Arthur Godfrey’s Talent Scouts
3. Arthur Godfrey and His Friends (variety — old Arthur was the only guy to have two top shows on the nets at the same time!)
4. Dragnet (police drama)
5. Texaco Star Theater
1. I Love Lucy
3. Arthur Godfrey’s Talent Scouts
4. You Bet Your Life (game show)
5. The Milton Berle Show (this used to be Texaco Star Theater)
1. I Love Lucy
2. The Jackie Gleason Show (variety)
4. You Bet Your Life
5. The Toast of the Town (variety)
1. The $64,000 Question (game show)
2. I Love Lucy
3. The Ed Sullivan Show (this used to be
The Toast of the Town)
4. Disneyland (family anthology)
5. The Jack Benny Show (sitcom)
1. I Love Lucy
2. The Ed Sullivan Show
3. General Electric Theater (drama anthology)
4. The $64,000 Question
5. December Bride (sitcom)
1. Gunsmoke (Western)
2. The Danny Thomas Show (sitcom)
3. Tales of Wells Fargo (Western)
4. Have Gun Will Travel (Western)
5. I’ve Got a Secret (game show)
2. Wagon Train (Western)
3. Have Gun Will Travel
4. The Rifleman (Western)
5. The Danny Thomas Show
2. Wagon Train
3. Have Gun Will Travel
4. The Danny Thomas Show
5. The Red Skelton Show
Maybe it was precisely all those complexities of the real world that made people relish simplistic solutions, sparking an explosion of cops, private eyes, and cowboys on TV in the late 1950s and into the 1960s. Dragnet, M Squad, Racket Squad, Highway Patrol, Have Gun Will Travel, Cheyenne, Gunsmoke, Yancy Derringer, Bonanza, and more, all depicted simply-defined problems quickly resolved, more often than not, with a well-placed gunshot or right hook. The simple life of the saddle tramp seemed especially endearing at one point; in 1958, there were 30 Westerns stampeding across the tube, and twelve were in the Top Twenty.
The critics moaned about the monotony of it all. Comedians made jokes about how you couldn’t change channels without finding horses and saloons. Were audiences watching simply because there was nothing else on?
In a 1963 study on audience attitudes conducted by Gary Steiner, an associate professor of psychology at the University of Chicago, when asked, “What are some of your favorite programs — those you watch regularly or whenever you get a chance?,” the top choice from twelve categories was, “Action — Westerns, crime, adventure.” “Comedy/Variety” was just a few percentage points behind. “Regular news” was a distant sixth, “Heavy drama” a more distant eighth. When asked to respond with more general categories — “Light entertainment,” “Heavy entertainment,” “News,” “Information & public affairs,” and “All others,” 82% ticked off “Light entertainment” as their first choice for viewing.
Ed Murrow’s acclaimed documentary series, See It Now lasted three years in prime time, but his celebrity interview series Person to Person (a predecessor and weekly version of Barbara Walter’s celeb chats) ran for eight years. See It Now got bumped from prime time in 1955 in favor of far more popular The $64,000 Question. That says something about audience tastes right there.
Quiz and game shows fed the same sort of desire for good feelings and an American ideal. In the late 1950s, they fueled the dream of easy prosperity, offering a short cut of prize money to take a lucky few to the comfortable suburbs where Ozzie lived with Harriet. A game show held a place in the Top Ten every year of the 1950s. In 1955, there were three game shows in the Top Ten, with The $64,000 Question being the most popular show on all of TV for the season. Quiz shows were so big with audiences at the time, that the producers of some of them rigged the competitions so they’d be sure that the contestants most popular with the public won.
The social and international problems of the 1950s paled next to the comparatively cataclysmic upheavals of the 1960s. The decade began with the Bay of Pigs fiasco, the Cuban missile crisis, a heated nuclear arms race, and went on to the tragedies of the Kennedy assassinations, Vietnam, the murder of Martin Luther King. There were college takeovers by students, urban riots, violent pro- and anti-war demonstrations, Women’s Lib, Black Power, the Stonewall riots, and the “police riot” in Chicago during the 1968 Democratic convention.
Discontent, despair, and cynicism kicked off a streak of disturbing big screen movies throughout the decade including the likes of Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb (1964), The Manchurian Candidate, Fail Safe (1964), Bonnie and Clyde, In the Heat of the Night, The Sand Pebbles (1966), Point Blank (1967), Dirty Harry (1971), The Wild Bunch, and Midnight Cowboy (1969). Along with their darkening attitude, the movies had also acquired more graphic violence, sex, and “adult” language.
And on television?
In the era of disillusionment with Vietnam, war was still defined on TV in traditional, heroic World War II terms through series’ like Twelve O’Clock High, Gallant Men, and the long-running Combat. If family and societal values were being fought over — literally — in the streets, the families on The Beverly Hillbillies, Mr. Ed, and The Donna Reed Show all seemed to be getting along fine. And there were still all those gosh-darned cowboys: Wagon Train, Gunsmoke, Rawhide, The Virginian, The Big Valley, The High Chaparral, and the unending Bonanza.
Those shows that did try to bring an honest, gritty edge to the airwaves were usually met with critical kudos and a short life. East Side, West Side, featuring George C. Scott as a New York City social worker, lasted one season; Slattery’s People was a political drama featuring Richard Crenna as the minority leader in an unnamed state legislature which lasted one and a half seasons; David Susskind produced N.Y.P.D., a frank look at the city’s police with scripts often based on real cases that folded after two seasons.
Preferred were programs the networks concocted that took the troubling issues of the day and delivered them in an untroubling manner. The Mod Squad featured a trio of hippy types but showed them fighting for the status quo; Mission: Impossible had the government’s dirty tricks department furthering the cause of good and right in a series that ran for seven years; Rowan & Martin’s Laugh-In tempered the edge of its topical, political, and sexual humor with vaudeville shtick and bikini-clad go-go girls for seven seasons.
On the issue of race, the status quo finally started to give ground although at a snail’s pace. The impulse to change usually came from below, from determined producers, rather than through a mandate from the nets.
In 1963, producers of the sci fi anthology The Outer Limits cast black actor Hari Rhodes in a supporting part. ABC objected on the grounds that the script had not specified the part called for a black. Producer Joseph Stefano’s reply was to pen in the word “black” on the script.
A few years later, the networks were still queasy treading on such new ground. Take what happened on a third season episode of Star Trek entitled, “Plato’s Stepchildren.” Par for the show, Captain Kirk (William Shatner) and several of his officers, including Lieutenant Uhura (African American Nichelle Nichols) got themselves captured by a nasty superior race of aliens. Well, these “stepchildren” had super mental powers, and one of the ways they decided to amuse themselves was to mess with Kirk’s mind and make him kiss Uhura. What the aliens didn’t care about was that this would be the first kiss across the color line on TV.
If the aliens didn’t mind, NBC did. The way Ms. Nichols told it to David Gerrold in his book, The World of Star Trek, while the net was gutsy enough to allow the kiss, the on-camera compensation had to be that Kirk couldn’t look too thrilled at it. “We played too hard against it,” Nichols told Gerrold. “(Shatner) fought it as if he didn’t want to kiss me.” Afterwards, Nichols said, the mail came in to the show in buckets essentially saying that the good captain had to be out of his planet-hopping mind to fight kissing such an attractive woman.
Still, there were more positive signs. One of the ballsiest moves came from producer Sheldon Leonard. Leonard had begun in Hollywood as an actor. “Sheldon played every Damon Runyon character ever put on screen,” says Bill Persky who worked for Leonard’s production company on The Dick Van Dyke Show. “He was a Bronx guy who spoke out the side of his mouth, but it was always straight talk, and from years in the business and his innate intelligence, the information was always solid.” In 1965, Leonard went full-force at TV’s color line with the globe-trotting espionage series I Spy, casting Bill Cosby as the first black lead on a dramatic series, a role which earned the actor/comedian three Emmys.
Though popular with critics and audiences, I Spy converted neither network wariness nor audience prejudices overnight. Throughout its run, I Spy was banned from a number of southern TV stations, and it wouldn’t be until 1968 before another black performer top-lined a network show, this one the bland but nevertheless groundbreaking sitcom Julia, starring Diahann Carroll.
Bill Persky managed to break some ground of his own on another front with That Girl, a series he created with his partner Sam Denoff, which debuted in 1966. Starring Marlo Thomas as a young wannabe actress trying to make it in New York, That Girl was something of a precursor — even, arguably, an ancestor — to HBO’s hit, Sex and the City, which wouldn’t come along for another three decades. “(That Girl) was the first time a young woman was the star of the show and didn’t have to be living with or working for a dominant male character. (The character of Ann Marie) wanted to be her own person, and had a dream which no one could discourage or take away. She would take any job, face any adversity, and never be stopped.
“(The show) had such great impact on young girls in their teens who, until then, hadn’t thought there were options beyond getting married and being a mother. Marlo was a feminist before there was even a word for them.”
The landmark series most critics generally credit with bringing TV into a realistic present day was producer Norman Lear’s All in the Family, which debuted in 1971. Carroll O’Connor played a lower middle-class blue collar guy, an ill-informed, narrow-minded bigot who wasn’t shy about sharing his rather nasty opinions. The series put the topic of prejudice and just about every other social and political ill out in the open and became a long-running success in the process. It launched an era Josh Sapan describes as TV’s “early adulthood and…the beginning of some socially impactful TV.”
In the years that followed, the taboo against relevant subjects seemed to fade, and so did color lines. All in the Family and Dawn were all highly popular shows with minority casts or leads. Ensemble casts now always found room to diversify the age, race, and gender of their troupes. Cop sitcom Barney Miller, for example, began its long run with a cast that included the proverbial young hot-headed cop, the proverbial wise elder cop, a Latino cop, a black cop, and an Asian cop, all under the command of their Jewish captain. Sexism, rape, racial equality, mental illness, homosexuality: bit by bit, it all came out into the open as well. This age of television glasnost would prompt something of a second golden age for the medium, with such pinnacles as the miniseries’ Roots and Holocaust.
Still, television hadn’t necessarily gotten better on the whole. The Top Ten lists remained dominated by “safer” programs. Take a look at the Top Ten from each year starting with All in the Family’s first season to the year it finally got knocked out of first place by flyweight Happy Days:
1. All in the Family
2. The Flip Wilson Show (variety)
3. Marcus Welby, M.D. (medical drama)
5. ABC Movie of the Week (weekly made-for-TV
6. Sanford and Son (sitcom)
7. Mannix (private eye drama)
8. Funny Face (sitcom)
9. Adam-12 (police drama)
10. The Mary Tyler Moore Show (sitcom)
1. All in the Family
2. Sanford and Son
3. Hawaii Five-O (police drama)
4. Maude (sitcom)
5. Bridget Loves Bernie (sitcom)
6. The NBC Mystery Movie (three series alternating
in the same time slot: McCloud, Columbo, and
MacMillan and Wife)
7. The Mary Tyler Moore Show
9. The Wonderful World of Disney (family anthology)
10. Ironside (police drama)
1. All in the Family
2. The Waltons (family drama)
3. Sanford and Son
4. M*A*S*H (sitcom)
5. Hawaii Five-O
7. Kojak (police drama)
8. The Sonny and Cher Comedy Hour (variety)
9. The Mary Tyler Moore Show
10. Cannon (private eye drama)
1. All in the Family
2. Sanford and Son
3. Chico and the Man (sitcom)
4. The Jeffersons (sitcom)
6. Rhoda (sitcom)
7. Good Times (sitcom)
8. The Waltons
10. Hawaii Five-O
1. All in the Family
2. Rich Man, Poor Man (dramatic mini-series)
3. Laverne & Shirley (sitcom)
5. The Bionic Woman (action/adventure)
6. Phyllis (sitcom)
7. Sanford and Son
9. The Six Million Dollar Man (action/adventure)
10. ABC Monday Night Movie (theatrical movie)
1. Happy Days (sitcom)
2. Laverne & Shirley
3. ABC Monday Night Movie
5. Charlie’s Angels (private eye/adventure)
6. The Big Event (various specials)
7. The Six Million Dollar Man
8. ABC Monday Night Movie
9. Barretta (police drama)
10. One Day At a Time (sitcom)
What had changed was the audience. The first generation of television children was growing up and they were becoming the major target of advertisers. Increasingly out of touch with the values of their parents, this new generation of viewer looked for something different on TV from what their parents watched. You could deal with previously taboo topics, but at the same time, the status quo continued to be reinforced. The Top Ten lists show that younger viewers didn’t want too much too different. Cop shows made the cut; Westerns didn’t (by 1974, not a single Western was on the air and they have appeared only sporadically since).
And the medium certainly hadn’t gotten any more altruistic. The move into more honest and relevant programming showed itself just as dedicated to the goals of commercial TV — trading big viewership for big advertising dollars — as any other programming wave.
Once All in the Family clicked, TV went into its stock imitative mode copying what worked and dishing it back out in slightly altered form. All in the Family had a lower middle-class white family debating the relevant issues of the day. Good Times, a spin-off based on a character introduced on …Family, featured a poor, urban black family debating the relevant issues of the day. Another …Family character was spun off into the series Maude, about an upper middle-class suburban family debating the relevant issues of the day, while The Jeffersons, also born of …Family, were an upwardly mobile black family debating the relevant issues of the day.
As audience research grew more sophisticated, the nets realized that it wasn’t always enough to have high ratings; they had to be the right kind of ratings. The nasty word “demographics” became increasingly heard, meaning the make-up of TV’s audience broken down by age, gender, income, etc. Demographic studies could tell what programs appealed to what segment of the American public, and sometimes the demographic nature of an audience offset the size of the rating.
At about the same time that CBS launched All in the Family, the network cleaned house on its schedule, dumping a number of series with solid ratings. Rural comedies including The Beverly Hillbillies, Petticoat Junction, and Green Acres, as well as the country/western version of Laugh-In — Hee-Haw — were swept out because advertisers didn’t think they appealed to the urban audiences where the Big Money was. Also out were network milestones like The Jackie Gleason Show, Red Skelton’s 20-year veteran variety show, and another 20-year trooper, the long-running Gunsmoke. The ratings were still good, but CBS felt that as the shows had grown older, so had their audiences, and advertisers were not putting their prime dollars behind reaching a gray-haired market.
NBC, on the other hand, scrapped the low-rated Star Trek despite its cultish appeal and an enormous letter-writing campaign from its fans. NBC thought the Star Trek audience was too young to be of interest to big advertisers.
One of the few times a network acted without regard to business goals was the cancellation of the Top Twenty The Smothers Brothers Comedy Hour. The reason? CBS was uncomfortable with the topical humor on the show and was uncomfortable with the brothers’ cracks about the government, Vietnam, social unrest, sex, religion, etc. Exit: The Smothers Brothers.
Deeper into the 1970s, the average TV viewer seemed to tire of dealing with the issues of the day. John and Joan Average didn’t want to worry about the state of the world, or even that of the U.S. of A. Topicality had had its day. Now came what many industry observers referred to as The Silly Season.
This was the era of Happy Days, Laverne and Shirley, Mork and Mindy, The Six Million Dollar Man and The Bionic Woman, The Love Boat, Fantasy Island, Three’s Company, Charlie’s Angels.
These programs came by way of ABC chief programmer Fred Silverman. At CBS, in a similar position, Silverman had steered the network into the All in the Family days of relevant, edgy programming. Now at ABC, he laid out a new strategy of fluff, fantasy, and broad comedy. TV critics might have moaned about the endless parade of empty-headed entertainment dancing across their screens, but nevertheless, Silverman’s strategy made ABC Number One among the networks for the first time in its history.
After the ’70s came the ’80s and a whole different brand of fantasy and fluff. This was the decade of the prime time soap operas, when the top shows included Dallas, Dynasty, Falconcrest and Knott’s Landing.
As negative as all this is sounding, the point here is not to say that during all those years television had been pumping out ton after ton of lousy and/or flyweight and/or exploitative programming. It did, but there were also a number of very good programs done, even during the height of the silly season. The very same network that was up to its ears in fluff also launched the highly respected Barney Miller the year after Happy Days hit the air. Some lasted (Barney Miller ran for seven season), and some didn’t.
And television did experiment. Gerry Abrams remembers ABC “…trying to learn how to produce this new thing called ABC Movie of the Week (sort of an updated version of the old anthology dramas of the 1950s)…if you had a good idea and had some talent to deliver, you generally could get things made, even if it wasn’t based on a book or any published material.” Installments included The Night Stalker (1972) which, for years, was one of the highest-rated non-sports TV offerings ever, and a little ditty about a killer truck called Duel (1971, the first feature by a young wannabe auteur named Steven Spielberg. Some MOTW’s were admirably daring, like That Certain Summer (1972), the first TV movie to portray homosexuality in a sympathetic fashion, and of which Los Angeles Times critic Charles Champlin wrote, “…a film whichh would do honor to any size screen.”
Every now and then, TV dared to push the boundaries on content and presentation a little bit, particularly after it began losing larger and larger audience numbers to cable (we’ll come back to that point later). Hill Street Blues, for example, took the idea of continuing story lines from soap operas and adapted it to an upscale, adult police drama. Law & Order fragmented the usual one-hour dramatic format into two parts; the first half-hour of the show depicting police investigating a crime, the second half dedicated to the district attorneys who prosecuted it. Miami Vice adapted the high-tone visual flavor of MTV to another police series. The Simpsons became TV’s first prime time hit cartoon series since The Flintstones in the 1960s, only this time the humor was based on ruthless lampoons of other sitcoms as well as society at large and even itself. The Addams Family exploded sitcom conventions with outrageous black humor. Another sitcom that tried to expand the boundaries of the sitcom genre was NBC’s My World and Welcome to It. The show tried to take the sitcom form to a new plane by having its lead character, loosely based on humorist James Thurber, interact with his own fantasies many of which were presented in a mix of live-action and animation.
There were also a lot of experiments that didn’t fly. NBC gave producer George Schlatter a shot at another comic coup after he delivered the hit Laugh-In. The result was a half-hour show of skit comedy hosted by a computer, and which pushed — and many felt stepped over — the borders of good taste. The show lasted exactly one telecast.
ABC bravely aired the made-for-TV movie The Day After which dramatized the nuking of the U.S. at a time when people feared nuclear war was not only a real possibility, but maybe even inevitable. Although it was the highest-rated made-for-TV movie ever made up to that time, ABC took a financial bath. Few advertisers wanted to promote their products during a film that spent three hours depicting the human race dying slowly and miserably. The film was never re-run on the network.
The late 1980s saw the debuts of several “dramadies,” a new form of half-hour show that tried to blend drama with the components of the situation comedy. Despite often garnering critical acclaim, none of them — Slap Maxwell, Hooperman, or The Days and Nights of Molly Dodd went more than a couple of seasons (although …Molly Dodd moved to the Lifetime basic cable channel with new episodes and continued its run for several more seasons).
The point that is being made is that most of the program formats we know today — like the sitcom, the hour drama, the cop show — were in place and well dug in by the 1970s. Most attempts to try something new and different cost the networks audience and money. By and large, the ratings indicated that what the bulk audience wanted to see was more of what they’d already seen, maybe with some tweaks and a new spin. Viewers were comfortable with the familiar, and the familiar was programming that was largely lightweight, socially irrelevant, and morally simplistic. For the crabby critic, the only break in the monotony was in movies on TV.
There had always been theatrical movies on TV. The film studios had unloaded a lot of their old and low-grade product on local broadcasters back in the 1950s. But the studios were loath to release anything recent. They were in no mood to provide what would be a considerable asset to the new, competing medium.
TV had hurt the studios in a big way with weekly attendance dropping by the millions each year. The problem wasn’t that those moviegoers were going somewhere else. The problem was that, thanks to TV, they weren’t going anywhere. Why drag yourself out to the movies when you could find a whole night of free entertainment in your very own living room? The movie industry was so angry with television that it did schoolyard-spiteful things like putting it in movie star contracts that the stars couldn’t appear on TV shows, or forbidding TV sets to show up in their movies.
By the end of commercial TV’s first decade, the studios realized television was here to stay and there was no sense ignoring it. As a matter of fact, they might as well try to make a few bucks off it and in more ways than just making shows for it. In the fall of 1961, NBC launched Saturday Night at the Movies, and selling recent movies to TV — and TV’s running of recent movies — became a big business. Where before getting top-grade titles out of the movie industry had been like getting blood out of a rock, now network buys of “A” movies meant regular big paydays for the studios.
Throughout the decade, theatrical movies became an increasingly important part of network schedules. Each summer the nets would beat their drums about all the great theatrical movies they’d be presenting the following season. By 1970, six nights out of seven had a network movie presentation. In the 1970s, movie nights were regularly featured among Top Twenty ratings lists.
While movies on TV broke up the humdrum quality of a lot of TV programming, they had their downsides, too. As the content of movies got stronger and stronger (offering moviegoers what they couldn’t get on TV was the movie industry’s strategy for competing with the small screen; this meant things like wide-screen projection and stereo sound as well as sex, violence and dirty words), the nets were forced to trim films for their presentation on TV. Nets would either cut the offending footage entirely, or the studio would have actors re-record (or loop) their dialogue, so that viewers watching the movie would see an actor’s lips say, “I’ll chase that dirty bastard to the ends of the earth and shoot him down like the filthy sonofabitch he is!,” but they’d hear, “I’ll chase that dirty bum to the ends of the earth and shoot him down like the filthy nasty man he is!” As the studios became increasingly concerned about the needs of TV, they would sometimes shoot alternate footage to replace material that TV wouldn’t air.
Depending on the movie, sometimes the cuts were so extensive that you were left wondering why the network had even bothered buying the film in the first place. The network version of Sam Peckinpah’s ultra-violent landmark Western The Wild Bunch was so chopped up that parts of the movie didn’t even make sense. One TV critic, looking at the network-butchered version of Midnight Cowboy, re-christened the film, 11:30 Cowboy.
Broadcasters were also not averse to cutting a movie simply to make it fit into a certain time slot. Along the same lines, they might time compress a film either to make it fit in a given slot, or to make more room for commercials (movies normally run at 24 frames per second; when time compressing a film, the movie might be run at 25 frames per second, or 26, 27, as fast as the programmer thought it could go without noticeably distorting movement or sound). On a two-hour movie, time compression could shave a few minutes off the running time of a film.
Also, movie screens being larger than TV screens meant small details in movies would often get lost on TV. And, as wide-screen film processes became more popular, the rectangular shape of a wide-screen film made a poor fit for the square shape of a TV screen. Depending on which wide-screen process was used, TV viewers of that film could be missing from a third to a half of the full movie picture frame.
Broadcasters used several techniques to jam wide-screen movies on TV. The most commonly used was pan and scan. What happens here is that when the movie was being transferred to videotape, the TV lens used to record the film was moved around the movie frame to find that part of the frame where the most important action is taking place.
All in all, TV by the 1970s — for all the progress and maturing it had experienced since its first years — still left the picky TV critic with a lot to crab about. The critic could look at the upcoming fall season and moan about how he/she’d felt she/he’d already seen all this stuff before. He/she could turn to a movie, only to crab about how the broadcasters were always cutting off the sides of the picture, and/or how they were cutting out all the good parts, and especially how they kept breaking up the dramatic flow every 13-1/2 minutes for their lousy, noisy commercials.
What would really make TV crabs crabby was it didn’t look like they had a lot of alternatives.
Maybe not a lot, but there were some.
The two leading recipes for success are
building a better mousetrap and finding a bigger loophole.
Edgar A. Shoaff
For the first few decades of broadcast television, the then three major networks held a near-monopoly on the national audience. More often than not, on any given night it was likely nine out of every ten people watching TV were watching one or another of ABC, CBS, NBC.
But even then, in that small sliver of the audience not watching the nets, there was evidence of a viewer appetite for an alternative to the often formula-dominated programming of the big broadcasters. Statistically, they didn’t amount to more than what would, years later, come to be referred to as a “niche” audience, and you’d be making a hell of an assumption saying they were looking elsewhere for their TV entertainment because they wanted something better. But it was clear they were looking for something different…or, at the very least, something else. And they found it on independent (INTV) stations.
Not every television station in the U.S. was a network affiliate. True, most were, and, in the early days of TV, it was the rare bird suicidal enough to take on the challenge of being an indie station, fighting for air in a network suffocating environment with nothing even approximating the programming or promotional muscle of the nets. In 1949, only two of the 150 stations then operating in the U.S. were independent.
First of all, an indie needed to find a market that could support a fourth station. Through well into the 1970s, the networks held over 90% of all viewing. Obviously, the big advertising money was going to go where the big viewership was, and that gave the nets a lock on major advertisers. Even on a local level, regional advertisers wanted their products hyped as widely as possible, so they naturally gravitated to the strongest stations which, unsurprisingly, were network affiliates. That in mind, an indie broadcaster had to find an urban market big enough where there was enough ad revenue to support their station left over from advertisers the local net affiliates couldn’t take on (because their advertising time was all booked), or wouldn’t take on (because smaller advertisers couldn’t afford their prices for air time).
Some urban markets were big enough to support more than one indie. Take the New York City market — my home ground — for example, encompassing New York City and its suburbs, a good part of northeastern New Jersey, and part of southern Connecticut. With over eight million people in New York City alone, that makes for a total designated market area (DMA — that’s what marketing people like to call geographically defined markets) of somewhere around 15 million people, the largest TV market in the U.S.; big enough, in pre-cable days, to support three indies: WNEW, WOR, and WPIX.
Smaller markets, say those representing just a few hundred thousand people or less, might have only been able to support three network affiliates and no more. Some markets couldn’t even manage that. There were markets with just two net affiliates, or maybe only one full-time affiliate with another station splitting its time between two networks. There were markets so small they could barely support even one station.
Even in a fat, fertile DMA like New York, competition for indies was always tough. It was almost impossible for an indie station to go head-to-head against the affiliate’s network programming. The affiliate was, after all, running brand new programming paid for by and promoted with jillions of network dollars, while the indie could only run programming paid for out of the ad revenue taken in from its single, local market. What that often meant was the bulk of indie programming consisted of a mix of local sports (everything from pro baseball to pro wrestling), syndicated TV shows (oldies never died — they just recycled eternally on local indies), syndicated movies, and some locally-originated original programming, like news and local special events coverage.
This doesn’t mean that the indie couldn’t compete. It just meant it had to be a little shrewder about it with clever counter-programming. New York’s WOR, had, for years, a Thanksgiving tradition of running King Kong, Son of Kong, and Mighty Joe Young back to back, giving the kids something to watch on the family’s second TV while Dad parked himself in front of the living room set for a day of head-banging football.
This makes the point that without having to adhere to a network schedule, local indies could play.
WOR in New York, for example, back in the 1960s, whenever it wasn’t airing Mets games in prime time, under its Million Dollar Movie banner would run a movie several times during the week and then several times on Saturday and Sunday (sounds an awful lot like cable, doesn’t it?). This made for convenient movie-watching, especially if you wanted to see The Crawling Eye or Guadalcanal Diary a half-dozen times, or wanted to catch it without missing McHale’s Navy on ABC, and also helped WOR stretch its programming dollars further. Decades later, AMC Entertainment CEO Josh Sapan says, “I can (still) hear the music (the theme from Gone with the Wind) and see the graphics for Million Dollar Movie, and I conjure up images of being at great personal liberty late at night watching movies.”
Another good example comes from another of the New York indies. Back in the 1980s WNEW used to run something called “The Channel 5 Movie Club” Saturday nights at eleven p.m. which was usually a hole in network programming. WNEW programmers knew that their metropolitan viewing area contained a lot of hardcore movie viewers, so they created a program format which played right into those tastes. Viewers would send in postcards listing what movies they wanted to see. The WNEW people would draw randomly from the postcards. If a particular postcard named a movie WNEW had in its library, it would run the movie and have the postcard writer come in to host the airing. People got a kick out of seeing one of their neighbors stumble his/her way through the hosting gig, imparting a few trivia gems about the evening’s presentation as he/she went. As for the movie, sometimes it was an oldie, sometimes something not so old, but WNEW took a cue from pay-TV channels and ran the movies with minimal commercial interruptions (maybe only breaking two or three times) and with minimal cuts. When the Movie Club ran Sam Peckinpah’s controversial Straw Dogs, for instance, they clipped no more than a few seconds of sexual content out of the film, leaving most of the strong language and graphic violence intact.
How well did this work? At one time, the Movie Club held the Number One spot in the New York market at 11:00 p.m., beating out all other indies and the nets. In a particularly neat piece of scheduling, by starting the movie at 11:00, WNEW hooked at least some viewers that might’ve been tempted to turn to late-night net shows like Saturday Night Live which didn’t come on until 11:30. WNEW knew few people would change channels in the middle of a good flick.
Network affiliates are like fast-food franchises: whether you go to a McDonald’s in San Francisco or in New York, they look the same, the menu’s the same, the food tastes the same.
But the indies each had their own distinctive menus, their own unique flavors.
Film critic Stephen Whitty understandably remembers the New York indies by their film libraries: “…you quickly learned that Channel 2 (network affiliate WCBS) had all the MGM movies, Channel 5 (indie WPIX) the Warner Bros. films, and Channel 9 (indie WOR) most of RKO.”
They each had on-air personalities audiences came to bond with. New York kids growing up in the 1960s remember Officer Joe Bolton hosting an afternoon half-hour of Three Stooges shorts, and “Captain Jack” McCarthy who switched from his captain’s cap to a Good Humor cap to shill ice cream during his half-hour of Popeye cartoons, Chuck McCann backed by a cast of puppets on Sunday mornings.
Josh Sapan remembers Joe Franklin, host of the longest-running talk show ever, WOR’s The Joe Franklin Show. Franklin, who had the charisma of a low-wattage light bulb, managed to parade a host of past, present, and future stars through his show’s 50 years on the air while babbling through his bottomless mental trove of entertainment trivia.
Producer Gerald Abrams’ favorite memory is of The Soupy Sales Show on WNEW, an after school mix of slapstick and vaudeville shtick that was, in a sly, wink-wink nudge-nudge way, as much for older viewers as it was for kids.
Stephen Whitty remembers WPIX Channel 9’s Yule Log — an uninterrupted televised burning Yule log airing from Christmas Eve through Christmas morning backed by Christmas carols. He also recalls “…hearing as a kid that one of my fellow students had a father who was a big shot at a local station. As a result, he made sure (that on) every Catholic school holiday, his channel ran kids’ programming.”
What most nostalgics remember from their local indies are — in Stephen Whitty’s words — “The hambone horror movie hosts.” In New York, WNEW had Lou “The Creep” Steele, the station’s on-air voice showing up in a tux and impenetrable shades to host Saturday night’s Creature Feature. Monk executive producer David Breckman remembers Philadelphia’s Dr. Shock with his catch phrase, “Let there be fright!” who shared the city’s airwaves with another on-air ghoul, Zacherly. Los Angeles had Vampira in the 1950s, then revived the concept in the 1980s with the curvy, cleavage-spilling Elvira. Detroit had Count Scary, Dayton had Dr. Creep, New Orleans had Morgus the Magnificent…
Everybody had one…but there was only one of each. That was the beauty of the indie station.
If you struck out trying to find something you wanted to watch on the nets or the indies, there was always public television. Well, not always.
Since 1952, the FCC had been setting aside a number of TV channels for nonprofit use. Newton Minow, the “vast wasteland” guy, had pushed for noncommercial stations that would be immune to the pressures of commercial television. The idea was that such stations, supported by Federal and local funding, corporate contributions, grants and private donations — instead of advertising — would be free to concentrate on programming of greater artistic quality and integrity without having to worry about keeping advertisers happy. Minow got his wish (although years after he had left the FCC) in 1967, when the U.S. Congress passed the Public Broadcasting Act which created the Corporation for Public Broadcasting whose primary purpose was to raise and distribute money to noncommercial stations, and which turned several hundred educational stations (they now number 360) into something of a fourth, nonprofit network. The Public Broadcasting Service was also set up to create and distribute programming to those same stations.
Public TV has brought some wonderful programming to viewers. Upstairs, Downstairs and I, Claudius are just a couple of the intelligent, adult limited series originally produced for British television that were introduced to American viewers through public TV’s Masterpiece Theatre showcase. Monty Python’s Flying Circus, and Fawlty Towers showed a flare for ruthless comedy generally absent from U.S. commercial TV and were also introduced to the American public courtesy of public TV. Sesame Street, Mr. Rogers’ Neighborhood, and The Electric Company are just a few of the wonderful educational programs aimed at kids produced by PBS which, unlike network kiddie programming, didn’t serve as platforms to hype new and expensive toys and games that kids just had to have. There were operas, plays, documentaries, in-depth news coverage, financial analysis, political discussions and more — all stuff that the nets wrote off as too boring or too limited in appeal.
And of late, PBS has been giving the commercial guys a run for the money, too. At this writing, British drama series Downton Abbey has been turning in commercial network-worthy numbers, and while Sherlock Holmes isn’t the same kind of blockbuster, it’s another hit for public broadcasting.
But while PBS has always been able to manage the occasional home run — like Downton Abbey, I, Claudius, Sesame Street, Monty Python’s Flying Circus, Ken Burns’ landmark documentary series The Civil War — the overall standing of the PBS not-quite-a-network hasn’t improved that much decade to decade.
The commercial network share of viewing has gone from over 90% to somewhere around 50% give or take. If Nielsen is anywhere near right, all of those missing viewers have migrated, over the years, to cable and alternative pipelines like Hulu, Netflix, etc. Little, if any, has gone to public television, at least on a regular basis. PBS was, and remains, the broccoli of TV: good for you, but people would rather eat Twinkies.
This is how it was for almost a quarter of a century. “Watching TV” meant watching the broadcast networks. On a weak night, you might drift over to one of the indies (if you were lucky enough to live in a DMA that had one), or PBS if you felt like a bit of intellectual self-improvement.
But the chances were when you hit the on-knob (in those pre-remote days), you were going to wind up on either ABC, CBS, or NBC. A generation growing up over those first 25 years couldn’t help but think TV had always been this way…and it always would.
The point is, ladies and gentleman, that greed, for lack of a better word, is good.
Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge
has marked the upward surge of mankind.
From the movie, Wall Street (1987)
Up until alternate delivery systems — like home satellite dishes, home video, and, later, HBO’s online service, HBO GO — Home Box Office was synonymous with cable television. In fact, go back far enough and there was a time where, when you said “cable,” you meant “HBO,” and when you said “HBO” — … Well, you get the picture.
And that’s one of the several ironies in the birth of HBO, because cable TV was not originally developed as an alternative to broadcast television, but as an adjunct; you subscribed to cable to watch what everybody else was already watching…but you couldn’t get.
We’ve been throwing the word network around an awful lot, but what does it mean? Essentially, all a broadcast network is is a means of distribution; it’s the collection of transmission and reception facilities that get a programmer’s signal around the country.
From the beginning of commercial TV, the major networks — ABC, CBS, NBC — were headquartered in New York City, and that’s where their signals started, just like in the days of radio. And, just like their radio forbears, the nets got their signals from New York to other cities over the telephone company’s trunk lines. By 1948, the nets had linked 112 of the 127 TV stations then in operation with coaxial cable.
But even by that time, the nets were already looking at a less clunky, less expensive technology than carrying their signals from New York across the country by co-ax, and began to transfer their transmissions increasingly to microwave through equipment also leased from the phone company. By the 1970s, 95% of TV traffic was being carried by microwave.
It would work like this. ABC in New York would send an over-the-air microwave signal to Philadelphia. From Philadelphia, it would be microwaved to Baltimore, then from there it would be transmitted to markets west and further south.
One of the limitations of microwave transmissions is that they travel in a straight line. The problem here is, if you remember the big deal about Columbus, the Earth is round. After a distance of about 35 miles or so, the microwave signal is heading off into The Great Beyond. What the nets had to do to get the signal across the country is erect a series of microwave relay towers every 20 miles or so, aligned in line-of-sight, to receive the signal, amplify it, and send it on to the next relay.
The microwave relays worked in series, meaning — using our ABC example again — that Baltimore couldn’t get the signal before Philadelphia. Any break in that chain — say some nasty competing network blew up one of ABC’s relay points — and all those stations downstream from the break would go black.
When networks would do live special event coverage on location, a microwave signal had to be sent from the event through a series of relays to the nearest major market. Let’s say ABC wanted to cover Abraham Lincoln’s Gettysburg address. They would send a location truck to cover Lincoln’s speech, send a microwave transmission over the microwave towers already in place if they covered the area, or set up some temporary relays if they didn’t, then relay the signal to the ABC affiliate in Philadelphia where it would be passed on along the network system.
Once the signal reached a market, the local affiliate broadcast it over the air on either VHF (Very High Frequency) or UHF (Ultra High Frequency) transmission frequencies. Most commercials stations were VHF which has a wider reach than UHF. How far the local transmitter could reach was dependent on how much power they could put behind their signal.
Another limitation on a station’s range was geography. Obstacles such as mountains and high-rise buildings could block signals from reaching outlying areas. To relay signals around such obstacles, the nets used translaters. Translaters are, in effect, miniature TV stations. They’re placed where they can receive a clear signal, then re-broadcast it to blocked or remote areas. Let’s say that Cedar Grove, New Jersey is having trouble receiving CBS because one of the Watchung Mountains is in the way. CBS plants a translater on top of one of the mountains where it can receive the CBS signal from New York, and then broadcast it down to Cedar Grove on the far side of the mountain. By the 1980s, the nets were using over 4,700 translaters around the country to extend their reach.
The U.S. started dabbling with communications satellites in the early 1960s, but this didn’t make a big change in how the nets conducted their business. Early satellites like Telstar and Relay flew in low orbits giving earthly broadcasts a short window of 20 minutes or so before the satellite passed out of range. With satellites, the nets could receive signals from and send signals to anywhere in the world, but because of this limited window, satellite transmission was restricted to relaying footage of international news and sports events to be incorporated into regular network newscasts. Live coverage was done via satellite, but rarely. But then, who needed satellites? Broadcasters had a perfectly reliable and long-standing terrestrial system which worked just fine, thank you (the nets would not move to full-time satellite broadcasting until the 1980s).
That signals originated in New York in TV’s early years made for a problem on the West Coast in regards to live programming (and a lot of early TV shows were broadcast live) because of the three-hour time difference. The best that West Coast affiliates could offer their viewers were kinescopes of a live broadcast. A kinescope was simply a film camera set up in front of a TV screen to film the live broadcast. The quality of kinescopes was never very good, but until videotape came along later in the 1950s, it was the only way for western stations to time-delay East Coast live broadcasts. In the meantime, West Coast stations kinescoped East Coast live transmissions and then aired them at their scheduled times.
By the early 1950s, the three major networks had established affiliates in approximately 200 market areas throughout the country, with each market centered on a well-populated urban area (some of these stations were O & Os, meaning Owned and Operated directly by a network; FCC rules on how many stations a net can own have changed over the years, and now currently use a formula which factors in radio stations and newspapers owned by the same entity in a given market). Although program production would eventually migrate to Los Angeles, New York would — and still does — remain the home of the flagship stations of the Big Three nets, meaning their biggest stations: WABC, WCBS, WNBC (the practice used to be that stations east of the Mississippi had call letters beginning with “W,” and in the west with “K,” but that system has long since been abandoned).
But even with those 200 affiliates and despite translaters stitching over the gaps, there were still dead zones in the broadcast universe: areas cut off by obstruction and distance from what was fast becoming the entertainment and information source of the age.
There has always been some form of cable carriage in TV. Cable was there before over-the-air broadcasting had been perfected. All the early TV development work, going back to Paul Nipkow, involved getting a visual signal from one place to another over wire. Without getting into a whole, long scientific discussion, let’s just say it’s a lot easier to get information signals from here to there by wire rather than over-the-air, and that’s why wire always came first in the history of electronic transmissions. The telegraph came before the Marconi wireless; the telephone came before radio; video on wire came before over-the-air broadcast.
But cable was never a serious, long-term consideration as to where the TV business needed to end up. In those pre-Internet days, wire was a one-to-one communication technology. There was one person — or machine — at one end, and one person — or machine — at the other; one sender, one receiver. Think telephone, think telegraph.
The industrial developers of TV (RCA for example), and radio before that, were not interested in intimate conversations with the people Out There. On wire, you talked with someone. TV developers were interested in talking at them, and as many of them as possible at once. That was going to be the most cost-efficient way of getting across their message (remembering why RCA got into the broadcast business to begin with, that message would be, “Buy more RCA stuff”), and be most attractive to advertisers (“Buy more stuff from this guy buying time on our channel”).
Why do you think they call it broadcasting? Because you cast your message out to the broadest possible audience. Cable might have its uses getting signals from one broadcast transmitter to another, but outside of that, well, TV on cable? What was the point? You could hook up your transmitter to a bunch of houses individually, but what kind of insanity would drive you to do such a dumbass thing? Why spend all that money and time when you could hit everybody you wanted with a nice big broadcast transmitter?
The bottom line is the decision was based on the bottom line. You wanted to make money with TV as a programmer? As an advertiser? As a programmer trying to get advertisers to advertise on your programs? Then you broadcast. End of story.
Broadcasting may be the most cost-efficient way of hitting a large audience simultaneously, but that doesn’t mean it’s the most comprehensive. It hits the most, yes, but not every. It has its limits.
There’s geographical and technological limitations. Signals fade over distance. Mountains and tall buildings interfere with the signal. Living next to power lines interferes with the signal. If your brother’s in the bathroom using his electric shaver, or your sister’s using her electric hair dryer, or dad’s using the vacuum cleaner, or mom’s using her new power sander, that can interfere with the signal.
And there’s the biggest limitation of all: money.
Let’s say we have a town called Niceville. We’re in the TV biz, so we put up a transmitter in the middle of Niceville. Let’s also say that it costs us $5,000 an hour (these are just numbers out of the air; real costs vary depending on what you’re trying to do, where you’re trying to do it, and with what) to send out a TV signal five miles in every direction. So, within that five mile radius, Niceville TV blankets all of the Niceville metropolitan area which contains about 50,000 people. We’ve got six minutes out of every hour we can sell to local advertisers, we decide on a price of $1,000 per minute, the advertisers think that’s not a bad price to get their message to 50,000 people, so every hour NTV is making $1,000 profit on ad revenue.
Now we start considering widening NTV’s reach. Bigger’s always better, right? The more people we can reach, the more money we can make, right?
We decide we want to widen our market area by another five miles in all directions. But that puts us out into the boonies, and increasing our geographical reach by another ten miles only brings another 1,000 people into our market area. Pushing the signal that much further is also costing us another $2,000 an hour for more powerful transmitters, higher electric bills, and other sundry costs. If we don’t raise our ad rates, we’ll be running a thousand bucks in the red every hour. To keep the same profit margin we had before, we have to raise our rates by another $500 a pop. But the advertisers don’t want to pay.
“Another $500?” they say. “For what? For another lousy thousand pairs of eyes? It was costing us a nickel an eye before! What’s so special about these other thousand people that we should pay a buck an eye for them?”
“Well,” you say because you can’t say much else. There isn’t anything special about those extra eyes. So, you either decide to cut your profit margin to keep the price of advertising at a cost-effective point for advertisers, or you save everybody a lot of trouble and aggravation and just don’t bother pushing your signal, settling for the Niceville metro audience instead.
The bottom line, then, on who was going to get TV and who wasn’t for a lot of TV’s early history was — here it is again — the bottom line. Even as more and more stations opened up around the country in the 1950s, and even with the use of translaters to get around obstacles and extend transmitter reaches, it was plain to see that there were always going to be people who just couldn’t get TV because it wasn’t worth the time, effort, materials, and — especially — money to reach them.
That was the gap that cable filled.
Depending on who you ask, you could get the impression nobody really knows who the first person to set up a cable system was. A few of them all seemed to spring up within a short time of each other. When I was with HBO, the story everyone liked to tell had to do with a Pennsylvanian named John Walson. Walson’s story is a perfect illustration of the problems that produced cable and why (in 1978, both the U.S. Congress and the National Cable Television Association — NCTA — recognized Walson as the inventor of cable TV).
In 1947, John Walson owned a General Electric appliance store in Mahanoy City, a pleasant little burg of 10,000 nestled in a basin among the hills and mountains of southeastern Pennsylvania near Allentown (remember those hills!). One of the appliances Walson was stocking was televisions.
It was a good time to be selling televisions. The country had been through sixteen years of Depression and war, but now people had a little money in their pockets, some spare time, no big, pressing worries other than the international Communist conspiracy but Joe McCarthy was taking care of that. The war had been over for three years, and what people were now looking for, after all the hard times, was a little fun. John Walson thought he had the answer for them sitting in the front window of his store.
But what would happen would be this. You’d go into Walson’s store and say you’d heard about this television doo-dad and about how funny Milton Berle was in drag and your kids were all cranked up to see Howdy Doodie, so you were interested in maybe buying one of these tele-majiggers. And Walson would show you this thing that looked like a cross between a hi-fi cabinet and an aquarium. Then he’d tell you how much it cost — anywhere between $450-575 for a picture the size of a good-sized kerchief — and you’d gulp and start wondering if it was worth it. You’d say before you spend that kind of money, you want to see what it was you’d be paying for. In answer, Mr. Walson turned to the nearest demo set, hit the “on” knob, and got…
Not a damned thing.
Walson hooks up a set of rabbit ears, fiddles with them a bit and you still get…
Not a damned thing.
Walson seems like a nice guy, so you buy a toaster so you won’t feel bad about buying nothing, but you leave proud of yourself for not being one of these suckers dropping a half a grand on this over-hyped gizmo.
The reason poor John Walson couldn’t get a damned thing on his demo TV set was because poor John Walson’s store — along with the rest of Mahanoy City — sat on the wrong side of one of those nestling hills we’d mentioned earlier. A mountain sat between him and the nearest over-the-air transmitter which was in Philadelphia. The only way Walson could demonstrate his TVs was to truck people up to the top of that mountain where the signals could be received clearly. The novelty of making that trip wore off mighty quickly with Walson, so he started working on a way not to have to make it.
A lot of history is made by the right person being in the right place at the right time, and John Walson was one of them. You see, Walson didn’t just run an appliance store. He also worked for Pennsylvania Power & Light which meant he knew his way around wire and electricity and other sundry related hardware, and could handle them without electrocuting himself. Walson put all that PP&L know-how to work, and on a lovely spring day in 1948, set up an antenna on a utility pole atop New Boston Mountain, then ran wire from the antenna to his store. The antenna on the mountain pulled in TV transmissions from three Philly stations, and the wire fed them downhill to Walson’s TVs.
And that, my friends, is cable television.
Walson took it a step further. People in homes along Walson’s cable agreed to buy his TVs if he agreed to provide programming by patching them into his cable. This seemed like such a damned workable idea that by 1950, Walson was also stringing cable into Mahanoy City (John christened his cable company Service Electric and it’s still around today). In the same way RCA had created a network so people would have a reason to buy their radios, John Walson brought television to Mahanoy City so people would buy his TVs.
Around the same time, a fellow named Leroy Edward Parsons was getting the same inspiration on the other side of the country in Astoria, Oregon, although he wasn’t particularly interested in selling TVs. Leroy’s problem was more immediate: he wanted to watch TV. Well, actually, according to a 1986 interview on The Cable Center, it was Parsons’ wife who was nagging to see TV after seeing a set demonstrated in Chicago.
Mrs. Parsons’ problem was there were three mountain ranges between Seattle’s first television station — KRSK — and Astoria 125 miles away. Instead of planting an antenna on a mountain top a la John Walson, Leroy Parsons put his antenna on the roof of the Astoria Hotel across the street from his penthouse. His neighbors saw an opportunity to get nice, clear TV signals, Parsons saw a business opportunity, and, in a meeting of minds, he began wiring up other apartments to his antenna.
Meanwhile, back in Pennsylvania, some other enterprising souls were plugging into the same concept. Martin Malarkey — another appliance store owner — set up a master antenna to feed a cable system in Pottstown in 1949, and in 1950, Robert Tarleton, whose radio repair business had expanded into selling TVs, created Panther Valley TV Co., credited as the first commercially viable Community Antenna Television (CATV) system.
Throughout the ’50s and early ’60s, CATV systems popped up around the country in order to bring commercial TV to places broadcast stations couldn’t reach. While the hardware improved over time, the systems themselves didn’t function much differently from John Walson’s first do-it-yourself number: put an antenna up some place where it could receive signals, then feed them by wire to subscribing homes.
That doesn’t mean early cable TV was some great thing. The picture quality was often marginal, and early cable systems weren’t terribly reliable. They also had an extremely limited cable capacity. Very early systems couldn’t carry more than three channels, although they would eventually manage to expand to 12.
Expanding channel capacity boosted cable’s sales pitch. If you lived in the New York City metropolitan area, you could receive six commercial stations and one public television channel over the air, but most markets had considerably less to offer. However, a well placed CATV antenna could provide its customers with as much TV as the cable could carry, much more than anybody anywhere else was getting by over-the-air transmission. That provided a compelling reason — beyond just clearing up reception — for people to invest a few bucks in cable service.
At the very least, cable was better than nothing, and nothing was the only other choice in a lot of places served by cable. By 1960, there were 640 CATV systems in operation in the U.S., mainly in rural parts of the country, getting TV programming to people who’d fallen between the cracks of the network web.
Charles “Chuck” Dolan was a sharp-eyed, shrewd-thinking guy who saw that not all of those cracks existed out in the boonies. There were dead zones right in the back yard of the home base for the three networks.
To lift a quote from The Producers (1967), worlds turn on such thoughts.
The Green Channel
Let’s say it’s the 1960s, and you live in New York City, some place in downtown Manhattan. You’re cool, you’re with it, so maybe it’s a nifty loft in the Chelsea district. That puts you maybe twenty blocks from the Empire State Building, the transmission source for all over-the-air TV signals in the city. Well, if your neat, beatnik pad happens to be in just the wrong place, with one of those famous New York City skyscrapers standing between you and the Empire State, somebody living 15 miles away in the New Jersey ‘burbs is getting better TV reception than you. While you may appreciate the poetic irony of living amidst the greatest collection of television signals in the country and not being able to get any of it, you don’t think it’s nearly as funny as your friends over in Jersey do. You want somebody to do something about it.
Somebody does. Enter Charles Dolan.
Dolan’s media career had started humbly back in his native Cleveland with him editing together sports and industrial films at home with his wife, then marketing and distributing them for TV syndication. Dolan sold the business and moved with the new parent company to New York where he saw an area ripe — so he thought — for exploitation.
Dolan was the first guy who didn’t see why the same CATV system working so well out in the boonies wouldn’t work just as well in big cities to solve problems like yours. He already had a closed circuit system in New York called Teleguide set up to pipe tourist information into 35,000 hotels rooms in the city. Dolan got the idea of turning this system into something bigger — a regular urban-set cable company — so he set up Sterling Information Services in 1965 to provide cable-carried TV to lower Manhattan. The system worked fine. The business, well, that’s another story, and not because Chuck was any kind of slouch at the business end of things (Dolan would eventually become the billionaire founder of Cablevision Systems, ultimately one of the country’s largest cable operators, and also owning substantial percentages of a number of programming entities, Madison Square Garden, and several major sports teams).
Laying cable anywhere is an expensive proposition. The way it usually works is the cable company makes a deal with the phone or local utility company giving it the right to run its cable along the company’s poles. Dolan’s problem was that there were no telephone or utility poles in Manhattan.
It so happens that in the early part of the century, there was an enormous blizzard that hit New York City and knocked down telephone and telegraph lines. This was viewed by city officials and residents with great annoyance and concern (consider it the snowy version of the Hurricane Sandy of its day), and they vowed this disruption of vital services would never happen again. They consequently made it a city regulation that all city street wiring from that point on had to go underground.
Along came Chuck Dolan a few generations later, and this going underground business turned out to be a big headache for him. In those days, it could cost something like $10,000 a mile to cable a typical suburban neighborhood. In Dolan’s case, what with running cable underground and then having to worm it through hundreds of apartments piled up on top of each other in modern high rises and ancient walk-ups built before homes were wired for electricity, it was costing ten times that, sometimes with the cost running even higher, to $300,000 per mile (adjust that for today’s inflation and it sends shivers down any investor’s spine). Two years after Dolan had launched Sterling, he’d wired less than three dozen blocks, had only 400 subscribers, was out two million bucks, and bleeding money from the eyeballs at the rate of another half-million every month. This situation is what financial professionals describe as, “Ouch.” Barring a quantum leap in cabling technology of “Star Trek” proportions, cabling New York was not going to get any easier for Dolan — or cheaper — in the foreseeable future.
Part of the solution to Dolan’s problems was more money. He couldn’t keep losing cash the way he was and stay in business. Time Inc., which, at the time, was primarily noted for its magazines, had been dabbling with non-print media including cable. Time had studies in hand reporting cable was a good thing to get into; this was a cutting edge technology offering bright future possibilities. So, Time bought into Sterling, keeping the company afloat and providing deep pockets to support and continue the company’s expansion. Six years later, the studies were still telling Time cable was a good long-term investment despite Sterling adamantly and stubbornly continuing to operate at a loss, which undoubtedly begged the question in some Time Inc. exec meetings, “Just how long is ‘long-term’?”
Money wasn’t Dolan’s only problem. It wasn’t money keeping people already in wired areas from signing on to his service. Time Inc. may have provided Dolan with the money to stay afloat, but his business still lacked a more important — the most important — strategic asset any product needs: a compelling reason to buy it.
Dolan was getting hammered on two flanks. It was a struggle to keep prices appetizing what with the enormous costs of running cable in Manhattan. But even at reasonable prices, as bad as over the-air reception may have been in parts of the city, quite a few people didn’t want to shell out monthly subscription fees of any kind just to get a clear picture of “Gidget” or “My Three Sons.” So, like RCA (which had created a network so people would have a reason to buy their radios), and Columbia (which had created a network so people would buy their records and record players), and John Walson (who had provided cable service so people had a reason to buy his TVs), Dolan needed a compelling reason for people to want cable; something that made potential customers say, “I have to have it!” Average, everyday network offerings weren’t doing it.
It was the summer of 1971, and Dolan was on a cruise to France on the Queen Elizabeth II with his family. On the trip across the Atlantic, Dolan — who evidently couldn’t turn his entrepreneurial mind off even on a vacation cruise — focused his deck chair musings on making Sterling more profitable. When Dolan & Family disembarked at Le Havre, instead of mailing postcards home to his friends, he mailed what would be the first of several memos putting forth arguments for his Next Thing: something he called, “The Green Channel.”
Dolan envisioned a special channel, something exclusive to his cable system, something filled with out-of-the-ordinary entertainment; something worth spending money for. Never mind the improved reception; people would take his cable service just to get The Green Channel…and, in a nice bit of symmetry, because there was a Green Channel, people would chase after his cable service.
All these years later, Dolan’s idea seems like a sure thing. After all; look where that idea wound up! But, at the time, nobody was running around pointing at Dolan’s idea and screaming, “Eureka! This is it!” What a lot of them did, in fact, was knit their brows, scratch their chins, and go, “Hmmm. You sure about this, Chuck?”
You see, the idea of subscription or pay television wasn’t new. That was the problem with it. After 40 years of trying, nobody’d gotten it to work yet.
There’s an old saying that if something is too good to be true, it probably is. That brings us to the idea of “free TV.”
Free TV is something of a misnomer. None of us get billed directly for over-the-air commercial television, but we pay for it just the same. That’s because the people buying all that TV ad time aren’t just pulling that ad money out of the air. Every time you buy a car, a refrigerator, a bar of soap — any of the bizillion products you buy advertised on TV — some small sliver of the money you spend goes towards paying a manufacturer’s TV advertising bills. In 1990, it was estimated advertising on broadcast TV was costing the average consumer family something in the neighborhood of $300 per year.
But — and this is a big “but” — there’s no real bill for that service; you don’t see the money going out. The cost of TV is incorporated into a lot of other daily activities — like buying soap — so there’s no sense on the part of TV viewers they’re paying for television.
That’s an important point because the object of subscription television is to get people to go out of their way to pay for something that, previously, they thought they were getting for nothing. Trying to rationalize paying for TV to a lot of people by bringing up this whole advertising dollar business is less likely to bring understanding, and more likely to bring back an invitation for the speaker to take a long walk off a short pier. “Free TV” still looked free, and nobody wanted to start writing checks to pay for television.
At least that was the thinking around the time Chuck Dolan came up with the idea of his Green Channel. The prevailing wisdom in those days was trying to get people to pay for television was like trying to get them to buy air.
But, optimists like Dolan believed that if you’ve ever lived next to a fertilizer factory, well, the idea of selling somebody better air is not as ridiculous as it might seem. Still, the idea of pay-TV had history against it.
Zenith had done a bit of laboratory finagling with something called “Phonevision” as long ago as 1931. Zenith had been hoping for a system where people would make a phone call and receive a special transmission of a one-time event. The idea survived — that’s sort of the basis of today’s pay-per-view events — but Phonevision didn’t. The Depression and World War II delayed development and the system didn’t get an experimental launch until 1947. How well it went over is indicated by the fact Phonevision didn’t show up anywhere again until the 1960s.
After the Second World War, a lot of people were looking to plug into the public’s desire to put hard times behind them with some rousing entertainment, and pay-TV — Phonevision not withstanding — seemed like a good bet. A number of over-the-air pay-TV systems were announced in the following years but none ever made it to market.
Every time a pay-TV dabbler used over-the-air, it had to deal with the FCC and that meant regulatory headaches. Cable, when its use didn’t cross state lines, wasn’t regulated by the FCC so a number of pay-TV experiments were attempted in the simpler arena of regional and local markets.
International Telemeter Corp. (which was majority-owned by Paramount Pictures) got a few test runs out its pay-TV concept, one running for five months in Palm Springs in 1953, while the second, launched in 1960, stayed up and running for five years in a Canadian suburb — not a bad run for an eventual flop. Jerrold Electronics went in with Video Independent Theatres, Inc. to get a service running for nine months in Bartlesville, Oklahoma in 1957. Teleprompter bought cable systems hoping to launch its Key TV subscription service on them, but Key TV never got beyond the technical testing stage.
More successful was Subscription Television, Inc., set up in Los Angeles in 1964 by Pat Weaver, the former head of NBC (the same guy who came up with the idea of selling advertising time on a network instead of program sponsorships). Subscription was a throwback to the Phonevision system where subscribers selected programs by phone and received them by cable. The service lasted six months before it went bankrupt.
Interestingly, what crippled Subscription Television the most wasn’t that the service didn’t work, or that people didn’t want it, but that there were still other people who had a vested interested in seeing the service go under.
Movie studios looked kindly on the idea of an outfit like Subscription Television because it would provide another market for their product (keep in mind, this was at a time when the studios were on the prowl for new sources of income as they were losing tons of money because people were staying home and watching TV instead of going to the movies; average weekly movie attendance had dropped from 82 million at the close of WW II to 20 million by the time Weaver rolled out Subscription Television). But movie theater owners, on the other hand, considered a stay-at-home movie service some kind of crime. Maybe the movie studios could still make their money selling their flicks to an outfit like Subscription Television, but where would that leave theater owners and their big, expensive, potentially empty theaters?
The National Association of Theatre Owners (NATO) started a “Crusade For Free TV” warning the public that if pay-TV were to succeed, eventually everything worth watching would migrate to services like Subscription Television, leaving “free” TV a garbage can of shows nobody wanted to watch. As a result of NATO’s campaign, a referendum was passed in California outlawing pay-TV services. The law was later overturned as unconstitutional by the state supreme court, but that was too late to save Subscription which collapsed anyway, a lot of its finances drained from fighting the NATO campaign.
The Television Entertainment Co. also resurrected Phonevision in Hartford, Connecticut where it managed to impressively keep an over-the-air pay-TV service going from June, 1962 until January of 1969. Despite the long run, system never achieved break-even and eventually folded.
Sending pay-TV signals over the air as a cheaper alternative to cable carriage brought along with it a lot of technological and business headaches. The big business headache was over-the-air signals were highly vulnerable to piracy. Most of the working over-the-air pay-TV services used some sort of encrypted (also referred to as encoded, or scrambled) broadcast signals which was where the technological headaches come in. You see, the scrambling technology of the time couldn’t always put the Humpty Dumptied picture back together again in an acceptable way. Television Entertainment’s system in Hartford, for example, only worked with black and white transmissions at a time when everybody was running out to buy color TV sets.
So, even though hooking people up by cable could run into a few dollars, it had its upside when Dolan proposed his Green Channel concept. Besides side-stepping FCC obstacles, a local cable system solved the question of signal security. A cable-carried pay-TV service would only go to the people you hooked up; you didn’t have to worry about some electronics wiz figuring out a way to get his own antenna up to pull in your over-the-air pay-TV signal (cable would develop its own piracy problems but we’ll get to that in a later installment).
Secure or not, it was still an open question whether or not anybody would want such a service. After all, nobody was going to have to worry about anybody stealing something they couldn’t convince people was worth buying. The track record of cable-carried pay-TV services wasn’t any better than that of over-the-air attempts, and there weren’t a lot of promising signs on hand. To wit:
Time Inc. sent out a direct-mail research brochure to residents of six cities in three states to see what people thought of the idea of pay-TV. Almost 99% of them didn’t think it was as good an idea as Chuck Dolan did. Another survey, this one conducted by an independent consultant, only did marginally better: a microscopic 4% said they were “almost certain” to subscribe to such a service (meaning a spine-snapping 96% were of the opinion that Time Inc. could take their pay-TV idea and a heavy rock and go jump in a lake).
However, Time got better results taking the issue into the field. The company carried out a test in Allentown, Pennsylvania where salesmen went door-to-door offering a first-month-free-and-refundable-installation-charge deal which attracted one out of every two residents. But, to prove every silver lining has a cloud, this more positive result had its doubters to — just because people said they’d sign up didn’t mean they wouldn’t back out later.
By this time, The Green Channel had gone through a name change. In one of the meetings where Dolan and some of the Time people now working on the project were writing that first, disastrous research brochure, names started getting tossed around for the new service. The name they settled on was not a favorite by any means, but something was needed quickly to meet the printer’s deadline. Believing they could — and would — change it later, they decided on, “Home Box Office.”
Ironically, the service didn’t debut on Dolan’s Sterling Communications. For reasons not outlined even in Time Inc.’s own corporate history (but probably involve finding a market with an extensive cable system already in place), HBO was set to debut on a system in Allentown owned by John Walson (yes! the very same!).
The debut of HBO was anything but auspigatory. For a moment, it looked like it might not happen at all. Part of the service’s line-up was supposed to be NBA basketball games. However, to protect ticket sales to NBA events, the NBA — like other sports organizations — enforces a “blackout” rule which says a game can’t be televised within a certain radius of where the game is unless the game is sold out. Allentown was within the NBA’s blackout area for Philadelphia.
To move HBO outside the NBA’s blackout range, and to make reception of the HBO transmission easier (HBO was going to send its signal to Walson by microwave after which it would be transmitted to customers by cable), Walson offered another system he owned in Wilkes-Barre.
Wilkes-Barre had its problems, too, the main one being it was underwater.
Hurricane Agnes had recently come through leaving the streets submerged and half of the city’s 10,000 cable subs disconnected. Working out of a storefront whichh still had water marks half-way up the walls, HBO representatives managed to sell just 365 Wilkes-Barrians on getting HBO for $6.00 per month.
On November 8, 1972, the HBO premier line-up consisted of a movie and a hockey game between the Rangers and the Canucks (another irony; no NBA games the first night anyway). The name of the film was, appropriately enough, Sometimes a Great Notion (1970).
Well, and then, not all that much.
Into The Skies, Junior Birdmen!
Keep on going and the chances are you will stumble on something,
perhaps when you are least expecting it.
I have never heard of anyone stumbling on something sitting down.
Charles F. Kettering
Home Box Office debuted to a handful of subscribers on a single cable system in Wilkes-Barre, Pennsylvania one November night in 1972, and then — …
And then not too much.
There’d been no media coverage at all of the HBO launch, not even from the local press. The one “celebrity” that was supposed to show — the Wilkes-Barre city manager — decided to pass on attending. Time Inc.’s president and chief executive officer, J. Richard Munro, was supposed to attend the opening ceremonies, but he got stuck in a traffic jam on the New York side of the George Washington Bridge and wound up phoning in his regrets from a White Tower burger palace.
The public response to the new service was about what you’d expect launched under such ill omens. By the end of 1973, the service’s first full year of operation, HBO had a whoppingly depressing total of just 8,000 subscribers spread thinly around 14 affiliated cable systems, all of them located in Pennsylvania. Worse, the pay-TV biz was getting more competitive — if still unpromising — by the day.
That same year, Warner Cable had decided to jump into the pay-TV fray with StarChannel; TheatreVisioN had launched with ex-MGM honcho Dore Schary at the helm; and Optical Systems’ Channel 100 was on the air (as for where these services are today, if you have to ask you’ve already answered your own question).
By the end of 1974, the HBO subscriber count had crawled up to 57,000 subs on 42 systems in Pennsylvania and New York including — finally — Sterling Communications (now, with Time Inc. as the sole owner, re-dubbed Manhattan Cable). By April of the following year, the service was inching up to its 100,000th subscriber and profitability, but only barely.
After almost three years, there was no way to say (despite black ink being faintly in sight) that the service had “caught on.” HBO was, essentially, a regional service, relaying its signals to its slowly expanding circle of affiliates by microwave, much as the broadcast networks carried their signals around the country. One of the reasons nobody else since DuMont had been able to start a fourth broadcast network was that nobody else was willing to shell out the $25 million a year the nets paid the phone company to relay their programming to their affiliates. Neither the time nor expense involved in creating such an infrastructure was acceptable to HBO parent Time Inc. If HBO was going to become the major business Time had hoped for, it was going to have to look for a more cost-efficient way of offering service to bigger numbers of potential customers.
The people at HBO looked around for options. They looked around and around and when they didn’t find what they needed, they looked…up!
Satellite transmission would solve a lot of their problems. HBO wasn’t looking at satellites the way they’d been looked at back in the 1960s, with low orbital paths and limited transmission windows. They were looking at a satellite (or bird in the parlance of the satellite biz) placed in geostationary orbit 22,300 miles above the earth (for comparison, consider that the space shuttle usually hangs out in an orbit just 150 miles out). In geostationary orbit, a satellite moves in the direction of the earth’s rotation at the same speed as the earth so that it holds a fixed position in the sky, day or night, every day. At an altitude of 22,300 miles, the satellite’s footprint — that is, the area capable of receiving signals sent earthwards by the bird — would cover all of North America. Such a satellite would give HBO the ability of transmitting its signal nationally without any bulky earth-bound system like the nets’ microwave relay towers, and at a fraction of the cost. It would be this simple: the day before satellite carriage, HBO would be jammed into a few markets in the Northeast. Flick the satellite switch (or whatever gets flicked), and HBO would instantly be available coast-to-coast.
But if going to the satellite seems like a logical Next Thing now, it looked a bit more iffy in those days. In 1975, when HBO made its decision to go for satellite carriage, not a single television programmer had trusted their programming to full-time satellite transmission. “What if the satellite conks out?” was the worry. “What if it falls down?” “What if it goes spinning off into space?” You know; Chicken Little stuff. And, the nets already had an established terrestrial system which had been working quite fine for decades, thank you. If it ain’t broke etc.
Besides such paranoias, satellite transmission had some very real earthly problems as well. In those days, the FCC dictated that satellite receiving dishes had to be nine meters in diameter. A dish that big requires a solid base; we’re talking pouring concrete. We’re talking an expensive installation procedure. And the dishes themselves weren’t cheap, either: $75,000. The question was, would cable systems be willing to lay out that kind of money? If they didn’t, that would leave HBO knocking on the door with no one home.
Gerald M. Levin had come into HBO in its earliest days as vice president in charge of programming. By 1975, he was HBO’s top exec. A workaholic always with an eye on the long-term, it was Levin’s call to delay much desired and long-awaited profitability by gambling $6.5 million for five years on a satellite hoping cable systems would choose to partake.
On September 30th, at 9:00 PM Eastern Time, HBO subscribers tuned in to watch live coverage of the classic “Thrilla in Manilla” heavyweight bout between Muhammad Ali and Joe Frazier. HBO subscribers in Pennsylvania were joined by 15,000 cable subscribers in Ft. Pierce, Vero Beach, and Jackson, Florida. HBO had gone national.
The service ended the year with under 300,000 subs in 16 states. Within two years, HBO hit the million sub mark and was showing its first profit. Growth doubled the year after, and again the year after that. By 1980, HBO had affiliates in every state.
Despite the paranoia of broadcast nets about satellite transmission, HBO’s faith in “going on the bird” was well-founded; since the service’s 1975 satellite debut, no operating television satellite has ever failed on the job.
But to some degree, HBO’s inspired choice turned out to be a double-edged sword. The company’s move to satellite demonstrated how unbelievably easy it was to become a national television programmer. All you had to do was come up with a couple of million bucks for satellite time and you were in the national TV business.
It was a lesson it didn’t take many people long to learn. HBO had left a road map for its competitors.
Ted Turner was the first student of the HBO model, and an A+ student he turned out to be. Turner didn’t even wait to see if HBO’s satellite move worked. As soon as he heard about HBO’s sky-high plans, he started getting some ideas of his own. Turner considered the HBO model of programmer + satellite + cable = Big Bucks, and didn’t see any reason he couldn’t do the same thing.
Turner had made himself a pile of money in the billboard business and had sunk some of it into an INTV station in Atlanta: WTCG. WTCG was no different than any other indie. It carried some local ball games, some syndicated off-net series, and a batch of old movies. Turner took some more of his money, licensed himself some satellite space, and turned WTCG into superstation WTBS (standing, naturally enough, for Turner Broadcasting System — Turner would later drop the “W” as the channel became more nationally targeted), launching the December after HBO went on the bird (all “superstation” meant was that here was a regular local broadcast signal available to cable systems around the country).
HBO, WTBS and cable made a tremendously profitable combination punch. Cable systems started springing up where you didn’t really need cable for reception purposes because now cable had something special to offer. It was as Chuck Dolan had predicted: people wanted cable to get the special programming. They wanted special programming, so they got cable.
And, it had gotten easier for new cable ops to get into the business. In 1976, the FCC relented on satellite dish size. Instead of nine meters, the FCC could live with a cable system using a 4.5 meter dish, which saved the operator about $60,000.
Turner’s superstation soon had company. Televangelist Pat Robertson also owned a broadcast station, and, when he put that up on the satellite in 1977, it became the basis for CBN (Christian Broadcast Network which later evolved into The Family Channel). WGN-TV out of Chicago became another cable superstation the following year, and WOR out of New York (now WWOR in Secaucus, New Jersey) the year after that.
HBO also started getting competitive heat on the pay-TV side. In 1978, two other pay-TV services — Spotlight and Viacom’s Showtime service — went national via satellite relay. The following year, Warner Communications put StarChannel (later re-tuned as The Movie Channel) on the satellite.
That same year, 1979, another kind of cable programming joined the crowd: CORG. CORG may sound like the mutant offspring in a monster movie (“Be afraid! Be very afraid of The CORG!”), and a mutant of sorts it may be. CORG is Cable-Originated programming, and it refers to program services created specifically for cable (there’s a difference between this and a service like HBO or Showtime, but we’ll explain that in more detail later).
The Cable Satellite Public Affairs Network (C-SPAN) was the first cable-only channel offered to systems. C-SPAN is actually a non-commercial co-operative effort by cable operators to bring coverage of the goings-on in the U.S. House of Representatives into cable homes.
C-SPAN was supported by the cable industry, but all CORG channels to follow were commercial enterprises (as opposed to subscription-only services like HBO). With the exception of C-SPAN, CORG channels are no different than superstations except that there is no broadcast base to them. Superstation WTBS, for example, was a regular INTV station broadcast nationally as was WGN, WOR, and other superstations. CORG channels only exist on cable.
Backed by Getty Oil, ESPN was the first of these commercial CORG services to hit the satellite in September of 1979. Warner’s Nickelodeon service went up the same year as did Ted Turner’s second cable channel — also a CORG channel — the Cable News Network (CNN). Black Entertainment Television (BET) and The USA Network weren’t far behind, launching in 1980.
There was more to come after 1980 and not just in the way of new channels. The cable explosion of the late 1970s and early 1980s had an enormous effect on nearly every aspect of the entertainment business. Cable channels went on the air in a rush to be a part of the boom times, although more than a few didn’t quite know what they were doing.
But before we get into all that great dramatic stuff, let’s take some time to look at the set-up that made all this happen.
The area in which a cable company operates is called a franchise. Franchises are awarded to cable companies by offices of the municipal government.
Each cable company puts together the package of programming it thinks will perform most profitably within the franchise area, so line-ups and pricing can vary enormously from system to system. Cable programming generally falls into two categories:
Basic — These are the channels that come automatically with a cable subscription. Most basic channels carry advertising. Superstations like WOR and WGN, as well as CORG channels like The USA Network and TNT, are typical basic cable services. Cable companies may offer their channels in tiers, beginning with a minimum number of channels at a low price, then adding groups of channels for additional charges.
Premium or Pay-TV — These are services not included in the basic package which need to be specifically requested by the subscriber and require the subscriber to pay an extra fee. HBO and Showtime are examples of premium services. Typically, cable subs must have some sort of basic package before they can add on premium services.
As for how all that programming gets from the programmer to the subscriber, it goes like this:
From the studio where the programmer’s signal originates, the signal is sent to a satellite transmission dish, or “uplink.” Some programmers own their own uplinks while others send their signal by cable or microwave to leased uplink facilities. Originally, HBO leased access to an uplink, but eventually built their own state-of-the-art uplink facility — formally called the HBO Communications Center — out in an industrial park area in Hauppauge, Long Island.
(Because other companies’ uplinks were also built in the area, techs working at the uplink center referred to the area as “Satellite City.”
Though broadcast operations at the center are largely automated, a just-in-case staff is on hand 24 hours a day, although they have little to do. Satellite City, being in an industrial park, isn’t close to anything. Staff bring their own lunch — or dinner, depending on the shift — and there’s a kitchen and a recreation area. Out of necessity, the place is largely self-contained.
As comfortable as the company tries to make it, more than once I had Hauppaugers interview with me for an awful job taking subscriber complaints because they were stuck working third shift at the center and were willing to take any kind of job to get out. Night shift staff at the center sat all night in windowless rooms watching TV, monitoring every HBO signal, went home in the morning to sleep, then woke up late in the day to return to work. The not-really-a-joke was that unless a slot opened during the daytime shifts, a third shift staffer at the center could spend his/her whole career on the job without ever seeing the sun.)
From the uplink, the signal is transmitted to a particular satellite where the programmer has leased specific “transponders.” Transponders are gizmos that take in the uplinked transmission, amplify it, then re-transmit it toward earth where it is taken in by satellite receiving dishes called “downlinks.” Any downlink within the satellite’s footprint can receive that satellite signal. The dish part of the receiver is called the reflector, which gathers in the signal and funnels it towards the focal point sub reflector which is that little thing you see sticking out of the middle of a satellite dish. This is where the signal is concentrated before it’s sent on to the cable system.
A cable system may be pulling in programming from a variety of sources. Besides satellite signals, it may also be receiving microwave and over-the-air transmissions. There may even be some original productions coming out of the system’s own studios. The place where all these signals are gathered together is the cable system’s headend. The system operator takes all these services and feeds them into a combiner which puts particular signals on particular channels and amplifies the signal for transmission over the cable system from this local origination point.
The main cable leading out of the cable company’s headend is the trunk. A series of amplifiers are in place along the trunk to keep the signal strong. This collection of amplifiers is referred to as a cascade. Branching off the trunk are feeder cables which take cable service into neighborhoods. Amplifier cascades are in place along the feeders as well to keep the signal strong.
In most places feeders are carried along the telephone or utility poles that run along streets, passing by every potential cable subscriber in the area that the system serves. This is where the cable industry gets the term “homes passed,” meaning the number of homes, whether they subscribe or not, that have cable available to them. Currently, somewhere around 95% of U.S. homes are passed by cable (there will never be 100%; some areas are too thinly populated to make cabling them worthwhile). Penetration refers to the percentage of homes that actually subscribe to cable (according to the National Cable Television Association — NCTA — as of 2010, almost 62% of American homes subscribed to cable service).
Taps are located along the feeder. When a household wants to subscribe, the company orders a truck roll, a technician visits the house and runs a drop from the tap to the house. Unless the household has a compatible cable-ready TV set, the drop usually runs into a converter, which is that piece of hardware the cable company leaves sitting on top of your TV.
The cable operator usually refers to this whole mass of cable and headend and everything else as the “plant.”
Originally, most plants used copper wire cable. Eventually, copper wire was replaced with fiber optic cable which not only provides a cleaner signal over greater distances, but also offers greater channel capacity than copper wire.
Prices vary widely from operator to operator and with different configurations of channels. At the core, however, is what the operator pays for channels. Each channel charges cable ops a per-subscriber fee. Depending on the drawing power of a particular channel, fees can run from under a quarter per sub to several dollars.
When my family first subscribed to cable, it looked like this: a big, clunky converter box sat on our TV and was hooked by wire to an even clunkier control box with a dozen buttons — one for each channel — and a knob which gave the channel buttons access to another row of channels. Back then, a typical cable system offered a dozen channels or so, and we were paying — if I remember correctly — somewhere around $15 a month for service.
Now, you have a sleek little converter, a remote with more functions than you can remember at any one time, and the average cable system — remember, this is just the average — offering over 100 channels of programming. My current cable bill, for one of my company’s high-end packages but which doesn’t include any premium services, is well over $100 per month.
That’s a hell of a technological and economic evolution over the space of 40 years.
But technology only provided HBO with a vehicle. As our marketing people used to say when I was working there, “You have to get them (prospective customers) in the tent; but once you get them in the tent, you have to have something to show them.”
Title Fights: The King of Pay-TV
In 1977, Jeff Bewkes was an affable 25-year-old MBA graduate out of Stanford, one of a number of similarly young grads in the trainee program of Citibank of New York, doing whatever bank trainees do in a nest of cubicles at Citibank’s training center in a drab Long Island City warehouse across the East River from the gleaming towers of Manhattan. One morning, Tony Wojick, a trainee in Bewkes’ Citibank accounting class, was talking about some movie he’d seen on TV the previous night.
That didn’t make sense to Bewkes; the movie Wojick was talking about hadn’t been in theaters that long ago. It was too soon for it to be on TV. “You saw it on the Monday Night Movie?” he asked Wojick, surprised one of the networks had gotten it for one of their movie slots so early.
“No,” Wojick told him. “You don’t have HBO?” Wojick described the service to him.
The light went on for Bewkes: “You mean pay-TV?”
Bewkes went home to his small Manhattan apartment in a four-story walk-up in the eighties and put in for a subscription. It cost him $10 for his basic cable, and another $10 for HBO (out in the ‘burbs, the typical price was $8 and $8).
Two years later, Bewkes was in the executive office of Citibank putting in his resignation.
“I’m going to HBO.”
To quote from Bewkes exactly: “I can’t remember the guy’s name, but at that point he uttered those immortal words, ‘HBwhat?'”
At first, Bewkes’ boss thought Bewkes was talking about the Hong Kong bank HSBC. After Bewkes clarified the point for him, his boss looked at him as if he were crazy. “You’re going from banking to TV?”
A little more than a decade later, Jeff Bewkes was President of HBO, elevated to CEO in 1995, and by 2008 was sitting in the CEO’s chair for HBO parent Time Warner, a post he still holds.
Bewkes was not the only one to have some idea of HBO’s potential in those early years. Not long after Bewkes had started his trainee program at Citibank, Gerald Abrams had left the Jozak Company to start his own production company, Cypress Point Productions. In the early 1980s, Abrams began hearing about the then explosively expanding service. He knew some of the people involved and knew then HBO was something “special.”
Movie-loving Josh Sapan, who would one day end up President and CEO of AMC Networks and become considered one of the most innovative execs in the TV industry, had begun his media career in the 1970s as a recent University of Wisconsin grad schlepping a couple of projectors around the country in the back of his station wagon to stage film screenings on college campuses. Sapan began hearing about HBO in the late 1970s. He can still recall one of HBO’s signature interstitial promo pieces in which a camera zoomed across a detailed model city then soared up into the sky to a gleaming HBO logo, accompanied by appropriately swelling music. “I was impressed by the grandness of the ambition (the piece) conveyed.”
At the time, both the grandiosity and the epic ambition were both amply justified.
HBO veterans look back on those days of the late 1970s and early 1980s and call them, “The Go-Go Years.” Twenty-seven years after John Walson had set up his little hilltop antenna, there were less than a thousand CATV systems in the U.S. Twenty years after HBO went on the satellite and kicked off the modern cable TV era, there are over 9,000 cable systems operating in the country.
When I joined HBO, the vets from the company’s early days were still telling stories about how easy it had been selling HBO during those first post-satellite years. One of the field reps told me:
The cable company would send a truck to hook somebody up. When he was done, the tech would head back to the shop. Somebody would see the truck, come running out of his house and literally chase the truck down the street, waving and yelling at him to stop so the cable guy could hook him up! You’d be amazed how many times that happened.
It was a boom, like the California Gold Rush of 1849, and, just like The Gold Rush, everybody wanted to get in on it. Beside the premium services that had launched within months of HBO’s 1972 debut, in 1976 Viacom Cablevision introduced its pay-TV service, Showtime. In 1978, Showtime, The Movie Channel, The Home Theatre Network and Spotlight — a service formed by a several cable operators — were on the satellite competing in the national marketplace with HBO. In the 1980s, there came The Disney Channel (which reconfigured as a basic channel in 1997) and Galavision, a Spanish-language premium service. And, four movie studios, figuring they could make more money with their own cable programming service than selling their movies to pay-TV, put their heads together and began planning still another pay-TV service: Premiere.
There were also a number of regional and stand-alone premium channels (a stand-alone service being one that only operated in a single market). PRISM (Philadelphia Regional In-home Sports and Movies) was an HBO-like service based out of Philadelphia formed by the United Artists and 20th Century-Fox film studios and the owners of three Philadelphia sports teams. The Teleprompter Corp. and Hughes Aircraft kicked off the Z Channel in Los Angeles which carved itself a niche market in the premium service business by doing things the larger services didn’t do, but which local film buffs adored (like the time Z made quite a splash by running the theatrical and director’s cut versions of Michael Cimino’s 1981 film, Heaven’s Gate, the movie reputedly responsible for sinking United Artists).
Another stand-alone service was Wometco Home Theatre based in New York City. WHT’s approach, however, was unique. Launched in the earliest days of HBO’s operation, WHT tried a short-cut; instead of going through cable, the company resurrected the concept of an over-the-air scrambled signal like the one which had operated (and ultimately folded) in Hartford, Connecticut in the 1960s. Cable still hadn’t reached a lot of the metropolitan area. WHT’s customer pitch was, “Why wait for cable? Why bother with a cable company even if you could get cable when you can get all those same great movies from us now!” But, despite being one of the first premium services in New York to offer 24-hour programming (WHT ads called it “fat TV”), and backed by an aggressive marketing campaign, WHT couldn’t compete. While WHT had an advantage over the Hartford subscription TV system of the 1960s in that it could scramble color TV signals, picture quality still wasn’t so hot. Plus, people wanted cable. They didn’t just want the one channel WHT offered; they wanted that whole batch of new stuff that came with a cable subscription. By the mid-1980s, WHT was gone.
Like WHT, there were other vehicles trying to take advantage of the gaps in cable coverage to exploit the ballooning hunger for pay-TV channels and, particularly, HBO. One of these was MDS (multi-point distribution system). MDS companieswere not programmers like WHT, but a delivery system alternative to cable.
MDS companies used microwaves to distribute programming. A central microwave transmitter was set up in the target market, and each subscriber was given a small microwave receiver to put on their roof or plant in a window aimed at the transmitter. MDS companies needed a fairly dense population center to be profitable, but for many years that was the very slice of the market where cable penetration was weak.
At the time, the ideal cable market was suburbia. Even though people were a bit spread out, wiring the ‘burbs was comparatively easy. On the other hand, in major urban centers with a lot of multiple-dwelling structures (in English: big apartment buildings), wiring was a pain. Instead of just stringing cable atop utility poles along a pleasant suburban street and running a drop into subscribing households, it was a sometimes herculean effort to run cable through the walls of apartment buildings, particularly if they were old buildings which didn’t have a lot of wiring space in the walls.
Another obstacle was the simple reluctance of cable companies to want to deal with certain big city neighborhoods, particularly neighborhoods with a lot of low-income households, which is a nice way of saying cable ops didn’t want to deal with poor people. Cablers in inner cities had to deal with high rates of equipment vandalism and theft as well as unpaid cable bills.
City franchise offices, in turn, refused to grant franchises to operators who refused to provide service to everybody: “If you don’t give all our residents cable, you don’t give cable to any of them!” Consequently, major urban markets like Chicago, Newark, and particularly most of New York City (even though Manhattan had had cable since 1965, the outer boroughs — Queens, Brooklyn, The Bronx, Staten Island — only started getting wired in the late 1980s) were extremely late coming into the cable fold. This was the hole MDS companies looked to exploit, carrying premium services like HBO and Showtime to city dwellers that couldn’t get cable.
But the MDS business had a slew of problems. Signal quality was awful and very prone to interference. And, as you may remember from earlier chapters, microwave transmission requires direct line-of-sight on the transmitter. While MDS dealers got pretty handy at bouncing signals off buildings like billiard balls in a cushion shot to get service to subscribers, there were still plenty of people that were — literally — in no position to get service. Line-of-sight reception also put a practical range of just 10-15 miles on signal transmissions.
MDS signals were also outrageously easy to pirate. The joke used to be that anybody with a wire hanger and a coffee can could pick off an MDS signal. Some people who weren’t even trying to steal service found it coming through on their TV sets because the set happened to be sitting in just the right spot in their living room!
Some pay-TV programmers — including HBO — were occasionally reluctant to deal with MDS distributors. MDS guys claimed it was because programmers were prejudiced in favor of cable operators because cable ops made up most of their business. Pay-TV programmers made the point they didn’t like their service on a system you could steal for the price of a can of coffee. Plus, they claimed many MDS operators were way underfinanced. On more than one occasion, a programmer and an MDS operator would wind up in court with the operator pointing at the programmer and yelling about anti-competitive behavior because the programmer had cut off service, and the programmer yelling back that service had been cut off because the operator wasn’t paying his bills.
Still, for a while MDS operators did manage to carve a niche market for themselves in a few cities. In places where there was no cable it was better than nothing, but as MDS-served neighborhoods were cabled, the MDS business generally suffered and eventually evaporated.
(MDS operators, which could only offer one channel, tried to become more competitive with cable by introducing MMDS — Multichannel MDS — which provided several channels of programming. But MMDS didn’t solve microwave companies’ technological or financial problems, and it still couldn’t match the far greater tonnage of programming cable could offer.)
Then there were (and still are) Satellite Master Antenna TV — SMATV — companies. These weren’t so much alternatives to cable as an adjunct. What a SMATV outfit did was set up a satellite receiver for a particular structure — a hospital, a particular apartment building, and especially hotels and motels — and put together a package of programming for that one building; in essence, a building-sized cable system. SMATV systems serve sites either cable systems don’t reach, or an op figures is too much of a headache to deal with.
Booming though the early days of the new cable era were, they didn’t boom enough to support all the players. By the time HBO went on satellite in 1975, Dore Schary’s TheatreVisioN was gone. Channel 100, Home Theatre Network, WHT, and Spotlight would follow It down the tubes. Los Angeles’ Z Channel would last through several changes in ownership until 1988 when it abandoned its film buff orientation and was folded into a network of regional sports services. Premiere never made it to air, felled by anti-trust charges.
Among premium services it was evident early on in the satellite era that the pay-TV business was going to be a two-contender bout between HBO and Showtime.
Compared to HBO, Showtime’s launch seemed to happen under more promising signs.
In the early 1970s, the FCC had declared that the broadcast networks couldn’t syndicate the programs made for their airwaves, nor could they own cable systems. CBS spun off its syndication and cable operations into a separate company called Viacom. Viacom was a great believer in the idea of pay-TV, saw the same opportunity in the business that Time Inc. did, and launched Showtime in July of 1976 primarily on Viacom cable systems. Showtime ended its first year on a more promising note than HBO. Whereas HBO’s sub count was kicking around 8,000 at the end of 1973, Showtime closed out its first twelve months with a count of 55,000.
Despite that strong beginning, looking back it’s obvious Showtime had been hobbled from the outset by several factors, the most obvious drag on the service being its late start. Showtime may have had a better first year than HBO, but about the same time Showtime was counting subscriber #55,000, HBO was on its way to subscriber #1,000,000. By the time Showtime got on the satellite in 1978, HBO was in 2,000,000 homes in 46 states.
It was a head start Showtime never overcame. By the late 1980s, HBO had a brand recognition level in the same league as Coca-Cola, meaning you had to have been living in a cave since 1972 not to know who HBO was. HBO had become so identified in the public mind with cable TV, that many cable customers thought HBO and their cable company were the same thing! In fact, a number of Showtime customers thought Showtime was part of HBO (I know this for a fact; I took some of those calls)!
Showtime also often suffered from a lack of financial resources and executive stability. In 1979, Viacom sold a half-interest in Showtime to Teleprompter, whose eventual parent, Group W, sold its interest back to Viacom three years later. Then, in 1983, Showtime merged with Warner-Amex’ The Movie Channel, then acquired Warner-Amex’ half two years later. All the buying and selling back-and-forthing meant Showtime never had the financial muscle to do what HBO was doing, and the changes in bosses that went with the back-and-forthing meant the company rarely had the kind of consistent, familiar leadership HBO had (since its earliest years, HBO’s chief execs have regularly come up from within the company).
Consequently, HBO was consistently able to outgun Showtime in the money it could pour into programming, promotion and marketing. Even when Showtime tried sudden catch-up strategies — absorbing Spotlight and its subscribers in 1983, and merging with The Movie Channel, the service was unable to convert those moves into sustained momentum, and the service continued to lag well behind HBO in subscriber counts (even today, SHO’s sub base is roughly half that of HBO).
Let me give you an illustrating event here.
Back in the 1990s, some of HBO’s senior marketing execs defected to SHO. I was in a meeting where some staffers expressed concern the defectors might reveal some of HBO’s marketing secrets to their new SHO employers.
The VP leading the meeting laughed. “What’s he going to tell them? There’s no secret! We spend more money! They don’t have it!”
Throughout much of the 1980s, HBO’s main marketing efforts were centered around the several free preview weekends it produced each year. During the preview weekends, cable ops were granted permission to put HBO on an open channel so non-HBO subs could sample the service. The preview was supported with an on-air and direct marketing blitz (at one point, HBO was one of the biggest direct mail marketers in the country), discount offers and 800 number call centers to take orders.
Looking back, the previews look kind of corny. On-air, they resembled PBS beg-a-thons with HBO’s usual, polished interstitial spots replaced with on-air hosts pushing viewers to buy buy buy now now now. Along with call centers, HBO set up complaint lines as well for regular subs beefing about the tedious buy buy buy message and the fact that new subs were getting a deal they hadn’t gotten, and non-subs beefing that their cable op wasn’t carrying the preview (participation was voluntary). Despite the beefs and some later attrition from new subs who, after a week or so of regular viewing, quickly picked up on the fact that HBO’s regular programming wasn’t quite as, oh, let’s say muscular as the specially selected preview line-up, the previews were the biggest source of new HBO subs for years.
But what drove the previews — what made them even possible — were HBO’s deep pockets, and Showtime’s pockets were never as deep.
Almost out of the gate, HBO had won the title as King of Pay-TV. And, while the marketing mavens at HBO and its competitors constantly strategized punches and counter-punches, in retrospect, it had never been much of a fight.
But Showtime — as anyone who has ever enjoyed The Tudors, Nurse Jackie, Weeds, and Dexter can attest — didn’t go the way of WHT and Premiere and the other pay-TV wannabes.
If Showtime couldn’t compete with HBO dollar for dollar, and it was going to survive at all, it was going to have to find another way.
The Movie Duels
Hell, there are no rules here – we’re trying to accomplish something.
There’s a story that on the November night in 1972 when HBO went on the air for the very first time to a few hundred subscribers in Wilkes-Barre, Pennsylvania, Gerald Levin – then HBO’s top programmer and soon-to-be chief exec – ordered living room furniture installed in his office so he could watch that premiere night of HBO the way the channel’s first subscribers would see it. He wanted to see HBO through their eyes.
Today, in an era of Netflix, Hulu, on-demand, downloadable content available on almost everything but the kitchen toaster, it’s hard to appreciate how novel the concept of HBO was over 40 years ago. Except for a few small pockets of the country which had experienced the come-and-go efforts of earlier subscription TV services, nobody – including the people running the service – had any idea how HBO was going to be perceived on the viewer’s end. Thus, Gerry Levin and the Barcalounger in his office.
Since nothing like HBO had ever succeeded before, and all previous subscription TV experiments had died early – and sometimes startlingly quick — deaths, there existed no pool of experience or data the company could look to on what would work for the service and what wouldn’t. Looking at those early years of HBO, it’s not a hard conclusion to make that the service was more sure of what it didn’t want to be rather than what it did.
My family began subscribing sometime around 1976, and the HBO we received would be nearly unrecognizable to the HBO subscriber of today. The word that comes to mind in describing its overall flavor is…serene.
HBO was on the air from late afternoon up until maybe midnight during the week, or, on weekends, as late as two or three the following morning, depending on when the last feature ended. Instead of the non-stop bombastic promotional barrage which fills the space between features today, HBO stuck a video camera on a bicycle and sent it cruising through the tree-lined paths of Manhattan’s Central Park accompanied by New Agey piano music. At the end of the programming day came a rather charming animated sign-off somewhat reminiscent of Goodnight Moon. Long before HBO coined the slogan, it was clear in its format and tenor that HBO was, indeed, striving to be not TV, at least the way three preceding decades of commercial broadcasting had defined it.
But even in that rather sedate, restrained format, once HBO became available nationally by satellite, the public’s appetite for this commercial-free alternative to broadcast TV expanded in rapid, geometric fashion. So bottomless was the hunger for this new kind of in-home entertainment, that many HBO subscribers also subscribed to Showtime, even though both services shared many of the same movie titles (in fact, both channels often ran the same movie at the same time, and their program guides were nearly identical in design!). It didn’t matter; having gotten a taste of something different, subscribers now wanted more.
HBO looked at the way Showtime was riding its coattails and came to the tactical decision that if people wanted a second service, why not offer one of its own? Instead of a service that nearly duplicated HBO while competing against it, by offering their own second service, HBO could design a second channel schedule that complemented HBO’s rather than copied it (in the process channeling second-service money into HBO’s bank account instead of Showtime’s).
HBO’s first attempt at a sister service was Take 2 in April of 1979. Take 2 was built on the idea that some potential/disconnected subs were turned off by both by the price and content of HBO. Take 2 was sort of a PG-rated, lower-priced version of HBO. It was an idea that sounded logical enough; it just didn’t work. Take 2 was dead by summer (by the time I left HBO in 2009, I didn’t know anybody at the company who remembered Take 2; turnover and a natural desire not to want to remember failures had erased the effort from the corporate memory – it doesn’t even come up on web searches).
An incisive analysis of what had gone wrong with Take 2 laid the groundwork for a better-designed, more effectively complementary service: Cinemax, which launched in 1980.
One of Take 2’s biggest tactical mistakes was to be formatted as an alternative to HBO. Cinemax, on the other hand, was designed going-in to work with it. Although the formats of both HBO and Cinemax (MAX) would be tweaked – and sometimes changed in major ways – over the years, the basic concepts behind them have remained constant. HBO was (and still is) a mainstream entertainment service: material and talent generally familiar to most subscribers, appealing to more-or-less middle-of-the-road tastes.
But Cinemax launched as a movie junkie’s service intended to push Showtime aside by offering something more comparable to The Movie Channel and thus more complementary to HBO. Stuff that generally didn’t fly on HBO – cult flicks, oldies, grindhouse flicks, foreign films – filled out the Cinemax schedule behind the top end major titles. Cinemax wasn’t about better, it wasn’t an “or”; it was about more.
Typically offered to cable operators bundled with HBO at a discounted price, Cinemax became a resounding success and, in time, was often the second largest service in many markets.
(Not that Cinemax didn’t have its growing pains. My favorite story about Cinemax’s early years concerned the channel’s first logo: the name Cinemax inside an oblong. It was referred to in-house as the Cinemax flying dildo.)
Although HBO controlled Cinemax’s schedule to avoid the kind of head-to-head duplication it faced with Showtime, all three services – as well as The Movie Channel – were drawing their waters from the same Hollywood well. When it came to the big movies of the month (and even quite a few of the second tier titles), all four channels looked pretty much the same. No surprise, then, that viewers with more than one pay service often didn’t know which one they were watching.
Which worked out fine for HBO since, when in doubt, subs tended to think were watching HBO.
Which wasn’t exactly a smile-generator over at SHO and TMC
There was a point where Showtime seemed to realize it could never compete head-to-head with HBO which led it to a “second service” strategy. You don’t get HBO or SHO, the second service strategy said; you need to have HBO and SHO. It was, as you might expect, hard to make that argument when all the channels were running the same big movies at the same time. That being the case, the competing services fell to horsing around with a number of strategies, and counter-strategies, and counter-counter-… — well, you get the idea. These were all moves intended to gain the players at least a tiny bit of a promotion-worthy edge. In retrospect, none of these strategies seems particularly bright, and when you look hard at them, they even seem like petty, mine’s-bigger-than-yours squabbling in the school yard.
Take the move to 24-hour-a-day programming. Since HBO first went on the air with just a few hours of programming, it had been slowly expanding its programming day, and Showtime followed much the same evolutionary arc. In 1981, Showtime decided to shoot the moon and announced it was now a 24-hour service.
There were those who responded with a mighty, “So what?” All that Showtime’s announcement meant was that it had finally filled in the remaining hole in its schedule that ran through the late night/early morning hours when viewership was limited to a handful of third-shift workers, insomniacs and owls.
HBO brass turned to their schedulers and said, “That’s it! Now we have to go 24 hours!” which brought no great huzzah from the scheduling gang. A 24-hour schedule meant a lot more work and for no appreciative gain for the service. Did anybody really think people forked out money for SHO or HBO so they’d have something to watch at four in the morning? Never the less, HBO wouldn’t concede the promotional ground to SHO, and, later that year HBO also went to a 24-hour schedule.
In another instance, what with all the services getting the same movie at the same time, it started becoming a bigger and bigger deal about who was going to show a big picture first, even if only by a few sweeps of the clock hands. That particular kind of pettiness reached a peak of silliness with Star Wars (1977).
At this point, I have to remind you to keep in mind that it was not an automatic thing that all major movie releases came to pay-TV in those days. The all-time box office champs were often held back from pay-TV release, even those that might be decades old. In those pre-home video days, the biggest of these earning kings/classics could still earn money in re-releases. (Example: MGM kept re-releasing Gone with the Wind  regularly for decades, even after it was released to HBO and then NBC in 1976; IMDB lists seven official U.S. re-releases between GWTW’s 1939 release and 1998). It was often said that, because of their re-release value, some movies were too big to ever come to pay-TV, like E.T.: The Extra-Terrestrial (1982; in its day, the top-grossing movie of all time, and it did, eventually, come to TV in 1989).
So, with that in mind, maybe you can understand that when the news broke that the 1977 chart-topping all-time box office champ (at the time) Star Wars was coming to pay-TV, it was taken as a Very Big Deal (Star Wars had been such a box office phenomenon, that even within the space of those few years, Twentieth Century Fox had already successfully re-released the movie once).
Star Wars was scheduled for its pay-TV debut in February 1983 and, per the usual licensing routine, everybody was getting it: HBO, SHO, MAX, TMC. If you had all four, you’d be hearing John William’s DA-DAAA, DA-DA-DA-DAAAAA-DAAA score in your sleep. Normally, for a film that big, a premium service would typically debut it in prime time (optimally at 8:00 PM Eastern and Pacific) on the first of the month. Trying to beat each other to the punch, HBO and SHO had both scheduled the movie for six a.m. on the morning of Feb. 1st — the earliest their respective licenses with Fox would allow — even though it would be a weekday and viewership at that hour would probably be low. But then HBO slipped Fox a few extra bucks which bought them the right to slip in an unscheduled, unannounced airing one minute after midnight on February 1st. Almost no one saw it but HBO had the somewhat dubious privilege of bragging about how they were the first pay-TV guys to show Star Wars.
(I may be being too dismissive about this. As morning broke on February 1st and subscribers heard Star Wars had already aired while they’d been snug in their beds asleep, dozens called furious there’d been no alerting announcement. On the one hand, maybe it was ridiculous for HBO to fork out extra money just to say it had gotten Star Wars first, if only by a lousy six hours. But when you consider that Star Wars’ army of fan geeks seemed to have been quite prepared to miss work, school, whatever by staying up half the night to watch the movie, well, maybe it wasn’t such a ridiculous ploy.)
While such moves may have been gratifying to the point where HBOers and SHOers could pass each other on the street and go, “Nyah, nyah, nyah-nyah nyah! Our service is better than your service!”, and saying “We were the first to (fill in blank with meaningless accomplishment)” made for good promotional copy, they produced no great changes in the marketplace. Exclusivity was a shot at breaking the status quo.
In pay-TV terms, exclusivity is simple; one service gets a movie and the competitors don’t.
Credit — or blame, depending on your view — for firing the first round in the exclusivity wars usually goes to HBO. The company began by dabbling in pre-buys in the late 1970s.
Let’s say you’re Joe Producer and you have this great movie you want to make but you don’t quite have enough money on-hand to make it. So, you go to a pay-TV company and say, “Look, for a couple of million bucks you can have the exclusive rights to my movie.” The pay-TV company says fine, you get the money to finish your movie, and they get the movie exclusively. The trick here is that everybody’s gambling. Since the pay-TV company is buying a picture that isn’t been made yet, they’re gambling that the picture is going to be worth something — anything. But whatever it turns out to be, they’re stuck with it. On the other hand, if the movie turns out to be a mega-hit, the company has picked up the pay-TV rights to a movie people want to see and that makes subscribers feel they’re putting their money in the right place at a bargain price.
A couple of HBO’s early pre-buys illustrate how chancy this move is.
One pre-buy HBO liked to brag about was the critically-acclaimed 1981 hit, On Golden Pond. Besides earning a monster $120 million domestic (which made it the second highest-grossing release of the year behind Raiders of the Lost Ark), Pond was nominated for 10 Academy Awards, including Best Picture, and walked away with three including Best Actor for Henry Fonda and Best Actress for Katharine Hepburn. “Hey, subs! You know who doesn’t have On Golden Pond? Showtime, that’s who! You know who does? You’re lookin’ at ‘im, pal!”
The pre-buy HBO rarely mentioned, released the same year, was horror flick Dead and Buried, whose title pretty much sums up its performance and HBO’s institutional memory of it.
Thereafter, HBO escalated into exclusive output deals. Under an output deal, a pay-TV service agrees to take every movie a particular studio makes over a period of time.
(Rarely are films picked up by pay-TV services on a single-title basis. The bulk of their films come from either output deals, or other multi-year agreements in which they agree to pick a certain number of films from a studio over a given period of time.)
The problem with exclusivity is that it pushes up the price of films enormously. Look, let’s say you’re Joe’s Studio. You’ve been selling movies to Pay-TV Company #1 and Pay-TV Company #2 for years. Pay-TV Company #1 comes to you and says they want exclusive rights to your movies. Well, the only way this is worth your while is if you make Pay-TV Company #1 pay you enough money to make up for what you lose by not selling the pictures to Pay-TV Company #2. In fact, depending on how badly Pay-TV Company #1 wants your movies exclusively, you may even bump your price to even more than what you’d make selling to both services. Pay-TV Company #1 either sells a kidney to come up with the cash or loses the exclusive rights.
HBO’s first major exclusive output deal was with Columbia Pictures in the early 1980s. Exclusivity was still something of a new game and, looking back, you can see it wasn’t being played as well as it might have been if the players had had a bit more experience. Today, when negotiating such a deal, a pay-TV service is obligated to pay a “floor” — a minimum price for each title — but will also negotiate a “cap” — a limit on the maximum price. But back in the 1980s, there was no set price for films under these kinds of multi-year deals.
The price of any given picture was pegged to the size of the buying pay-TV service (so that in the days when Showtime and HBO bought the same pictures, Showtime paid less than HBO for the same titles) and the box office performance of the film. Under these deals, if a picture completely bombed, then the pay-TV company only had to pay the floor. But, the better the picture did, the more the pay-TV company paid. Without a cap, the sky was the limit. In that first big exclusive deal, HBO neglected to give enough attention to the idea of a cap.
One of the pictures the service received under the Columbia deal was Ghostbusters (1984). Because of the humongous success Ghostbusters had enjoyed at the box office (almost $239 million domestic), it was estimated that a capless HBO had gotten stung for somewhere around $40 million for that one picture, a price tag that sopped up some of the money HBO would’ve liked to put into other programming.
Following the Ghostbusters mess, HBO understandably expressed the opinion that maybe exclusivity wasn’t such a hot idea. It’s too expensive, the service claimed, and it meant spending more money for fewer pictures.
Showtime, however, had a different opinion; they had their “second service” strategy. They fired back with a five-year exclusive output deal with Paramount Pictures. It didn’t leave Showtime with a lot of money to spend on other programming, but for the first time the service figured it had a strong card to play in the pay-TV marketplace. Paramount was on a hot streak just then, coming out with a string of moneymakers like Flashdance (1983), Beverly Hills Cop (1984), Footloose (1984), and Top Gun (1986). Now, only Showtime would have them. No matter what pictures HBO had, the only way an HBO subscriber was going to see these top-flight Paramount pictures was to get both services.
The deal didn’t quite work out as well as Showtime had hoped and that was because of something else that had entered the home entertainment picture in the mid-1980s: the videocassette recorder. The VCR made the notion of exclusivity, well, a obsolete. Between theatrical release, pay-per-view and now video release, there was a better than even chance that most people interested in a particular movie had already seen it by the time it came to pay-TV. Whatever long-term boost Showtime had hoped for from the Paramount deal in terms of increased market share and in raising brand consciousness, they didn’t get it.
Further undercutting the value of exclusivity was that exclusive pictures didn’t stay exclusive forever. As soon as Columbia’s exclusive license with HBO was over, the studio turned around and offered all the pictures that HBO had aired under that license to Showtime. The same thing happened with Paramount exclusives that had gone to Showtime eventually showing up on HBO. Granted, the pictures were a couple of years old by then, but this constant recirculation of supposedly exclusive titles to everybody and his brother made that short window of exclusivity look awfully fleeting, and not so special.
By the late 1980s, it was doubtful exclusive licensing of theatrical films offered any service a major competitive edge. Still, no one was willing to go back to the days of rampant duplication. The status quo became spending more money for fewer movies, with HBO/Cinemax and Showtime/The Movie Channel carving up the studio pie (since then you can also count Starz/Encore as pie-eaters, Encore launching in 1991, Starz three years later). HBO, as the larger service with deeper pockets, was consistently able to lock up more major studio deals than SHO.
Still, for many subscribers, it wasn’t enough.
When HBO first went on the air in 1972, it was with a handful of movies which rotated with a number of sports events over a period of several months. By the time I joined the company in the non-exclusive early 1980s, our brag was we were offering subs between 15-20 new releases each month, sometimes more. But when I left in 2009 when our top-end movie line-up was completely exclusive, it was a good month if we had ten recent releases…and it wasn’t always a good month.
Even before the exclusivity wars went nuclear, the demands of going to 24-hour schedules already meant pay-TV services couldn’t solely rely on recent theatrical releases to fill out their schedules. This was particularly true of movie services like MAX and TMC which were premised on offering more in terms of tonnage and variety than mainstream services like HBO and SHO.
To help fill out their schedules, each pay service acquired a number of older titles (cable TV has thrown out Webster’s definition of “classic” and routinely throws this word around as a generic description of any movie that’s not new). These may come to them in packages (a studio offers a bundled group of titles; not being altruists and seeing a way to generate some income on movies people wouldn’t go to see at gunpoint, studios typically include a couple of top end titles, a couple of not-bad flicks, and a fair number of dogs), or through library deals wherein the programmer is given access to a studio’s library of older titles to pick a specified number of movies over a given period of time. This doesn’t mean the programmer can get any movie the studio ever made; the service can only pick from those movies not currently under license.
In the early 1980s, these kinds of older films made for a smoother fit with a movie junkies’ service like MAX than they did with HBO. When HBO tried running a single black-and-white oldie in prime time per month — something classy, like its first such effort, A Streetcar Named Desire (1951) — subs howled.
The gist of the complaints went along the lines of, “I ain’t payin’ this kinda money to see the same old movies I already seen on regular TV a hunnerd times!” Or other angry words to that effect.
Over time, subs got used to the idea of a certain number of older titles in non-prime time hours, although the service remained careful about presenting anything too old on HBO.
Out of the need to bulk up offerings, some in-house policies began to erode. When the home video industry spawned direct-to-video titles, HBO at first drew a line in the sand: “No video titles!” Which eventually morphed to, “Well, maybe just a couple, but only really good ones!” Which continued to evolve into, “Well, this one’s not too crappy.”
Over the years, HBO would explore a number of tactics that took pre-buying to a steroidal level with the aim of not only locking up exclusive titles, but providing a reasonably steady flow of big name movies on a — hopefully — cost-efficient basis. Having a bit more money to throw at the problem then Showtime, one of the tactics HBO tried was by sinking money directly into theatrical movie production through an investment thingie called a “limited partnership.”
LPs were not new. It was an established part of business dealings as a way to bankroll new ventures. HBO was the first to try the concept with film financing, and wound up with a tidy pool of money to make big screen movies with. Soon, LPs were quite the rage in the movie industry.
LPs, however, turned out to be a fad more than a revolution in film financing. While LPs could get movies made, they couldn’t guarantee they’d be successful…or even any good. People who invested in Silver Screen Partners in 1983, the first HBO LP, were guaranteed an eventual profit on their investment, but by the time it finally paid off investors saw that they could’ve done better by just leaving their money in the bank. The seven Silver Screen titles released over a three-year period didn’t amount to much commercially or critically, with the Tom Hanks starrer Volunteers (1985) the best of the lot (which, if you’ve ever seen Volunteers, tells you what a weak lot it was). As an investment possibility, LPs had lost a lot of their luster by the 1990s.
HBO tried another tack by partnering up with Columbia Pictures and CBS to create a new major motion picture studio — Tri-Star Pictures — in 1982. It was an ambitious venture, being touted as the first major studio launch since the Golden Age of Hollywood a half-century before. The idea was Columbia would handle the theatrical distribution, HBO would get exclusive pay-TV rights, and CBS would get broadcast network rights.
But by the mid-1980s, home video was killing the value of movies to broadcast TV, and CBS dropped out in 1985. HBO would pull out the following year.
Still, getting into the production end of the movie business remained a siren song HBO could never quite shake. In 1993, the company invested in a new production company, Savoy Pictures. After a string of box office clunkers, Savoy folded in 1997. In 2005, the company’s HBO Films division (which primarily produced feature-length originals for the channel) went in on a joint venture with New Line Cinema (also owned by HBO’s parent, Time Warner) in Picturehouse, with the goal of producing indie-caliber theatricals. Despite a few notable releases (Pan’s Labyrinth, 2006, for one), Picturehouse’s overall track record was decidedly unimpressive, and Time Warner shut the company down in 2008 (Picturehouse chief exec Bob Berney would later resurrect the company outside the Time Warner fold).
By the 1980s, as subscriber growth for all pay-TV channels began to stall in the face of the home video explosion, it was clear to all players that HBO, SHO, et al couldn’t live by movies alone.
One tactic seemed to address all the concerns: it boosted the number of offerings HBO could present in a month; it offered a distinctive, exclusive flavor to the brand; it gave HBO some measure of control over the variety it could offer subscribers at a time when major theatrical releases were increasingly targeting an extremely narrow demographic.
And, perhaps most importantly, it made HBO slightly less dependent on theatrical fare.
We’re talking original programming here. While it had been a part of the service since its first night, it tended to be looked at — by both the company itself and its subscribers — as an adjunct, an extra. Filler. Now, the company was seeing it as something more strategically important than that.
The trick to original programming was getting good at it, and that would take quite some time.
“I used to say this to the staff,
‘We’re all working very hard, but pause and reflect,
because not many people in their professional lives ever get the chance that we’re having.”
It’s New York, the early 1980s, and if you were young, still relatively new to The City, looking for only your first or second job, it would’ve been hard to find a more exciting – or fun – place to work than Home Box Office. It was a great, grand time for the company, one in which it was hard not to feel you were part of what still felt like an adventure into unmapped territory, where success followed success, and where – as I remember one of my colleagues saying in reflection – it often seemed like one, big party. In an HBO 20th anniversary commemorative brochure, Tony Cox, one-time president of the HBO Network group, and who would go on to become chairman and CEO of Showtime, called the 1976-1984 period at HBO “…one of the unique professional business experiences that anyone could ever have…there was a unique bond amongst us. We were a band of happy warriors hanging together in a very frantic situation.”
When I joined HBO in 1982, the company was on a seven-year hot streak; one that seemed like it would never end…until it did.
Les Read, one of HBO’s veteran salesmen, once told me that in those first years after the service went on the satellite, the service was still such a novelty that its debut in a new territory was actually a local news event. HBO and the cable company would stage a nice little presentation, an official from the city – sometimes even the mayor – would be on hand, the local press would show up, and then it was time to switch on. Only since an engineer sitting at a control panel hitting a button didn’t provide the necessary dramatic oomph, the HBO sales guy would show up with an electrical switch box – the kind with a big lever on the side like a one-armed bandit – and when the appointed hour came, the mayor (or whoever) would throw the switch.
The box wasn’t hooked to anything, mind you, and at that point that boring engineer sitting at his boring panel would be cued to do his boring button-pushing, but it all made for some effective pictures in the local paper.
By the early 1980s, HBO was becoming less and less a novelty, and more and more an ingrained, entrenched, dominating part of the media landscape. In the seven years since the company had gone on the satellite, it had grown from less than 300,000 subscribers on 101 affiliated cable systems to ten million subs served by over four thousand affiliates in all 50 states, Puerto Rico and the Virgin Islands, with no slowing of the expansion in sight (HBO does not retain foreign rights on the films it licenses and therefore cannot be distributed outside U.S. territory, but since Puerto Rico, the Virgin Islands, and later Guam were American territories, HBO could extend its distribution to them). As icing on the cake, the company had had an instant follow-up success with the launching of Cinemax. Reflecting the company’s growing national presence, HBO opened up a network of regional offices to provide sales and marketing support to affiliates around the country, while the Los Angeles office also served as HBO’s connection with the Hollywood community.
The company was growing so large and so fast, there was – literally – no place to put all the staff! In 1972, the entire organization took up only a few offices on a floor shared with Don Robbie clothing in the Time & Life Building, a massive glass obelisk across the street from Radio City Music Hall. By the time I came to the company, HBO had offices and hundreds of employees scattered here and there around the building wherever room could be found. Dave Baldwin, HBO’s one-time scheduling commander-in-chief, recalled in that same anniversary publication:
“People were setting up offices in broom closets; they were running phone lines across hallways. My first office was in a storage facility I shared with all of the Research department.”
I was working for what was then called Subscriber Information Services (essentially, the complaint department). When distributing our monthly report (in those pre-e-mail days, this was done by hand), I remember making rounds by taking one elevator to hit the lower floors, and another to hit offices on the higher floors. My department rarely ever saw our division chief because he and the rest of our division were on a separate floor from us.
At the same time, these circumstances sparked a decidedly uncorporate camaraderie. Offices were shared, common spaces were shared. Adding to the atmosphere was the energy that went with a young company staffed by young people. From the birth of the business through the 1990s, the average age of an HBOer was early 30s, and most of the junior staff was in their 20s, with HBO being the first job for many of them. Both the company and the staff were too young for there to be much of a gap between senior and junior staffers. Whether you worked under someone, or over someone, there was a general sense of feeling we were all growing together with HBO.
In HBO’s 20th Anniversary brochure, one-time HBO Chairman and CEO Frank Biondi remembered his early years at the company in the late 1970s:
“Walking the halls you felt a lot of energy, a lot of enthusiasm. There were people from the best business and law schools in the country, all about the same age…(There) was a sense of almost unlimited opportunity…”
And there was the overriding fact that the company was making gobs of money. From 1978 to 1980, HBO’s annual profit growth was 80%. Salaries were good, benefits generous, expense accounts loosely regulated. My department chief used to pick a movie out of the company library and treat us to pizza and a movie in our offices every Friday. Once a month – or whenever someone had a birthday, an anniversary, a promotion, was leaving for another job, found out they were going to have a baby – we’d be treated to lunch at a restaurant under the guise of “staff meeting.”
It often seemed people in the company would party at the drop of a hat. Hardly a week went by when the work would stop, out would come eats and drinks (on the company’s tab, of course), and it was fiesta time! Bridget Potter, HBO’s Original Programming chief from the 1980s into the 1990s, described the environment at the time as “…work, work, work, party, party, party.” Entire divisions had summer outings at country clubs, and for the company Christmas party, HBO would rent out places like the Stardust Ballroom, or the lobby of Radio City.
In 1984, the company gathered up its scattered troops and marched downtown to its own home on the corner of 42nd Street and Avenue of the Americas overlooking Bryant Park (as the company continued to grow, we would punch through into the Grace Building next door and occupy several floors there as well). Because of its glass-walled appearance, some of us called the new building The Flash Cube (you young folk with your digital cameras will have to look up “flash cubes”).
HBO had always thought of itself as a different sort of Time Inc. animal. Time had had other non-print ventures, like Time-Life Films, but they hadn’t amounted to anything substantial. We would hear word there was a certain amount of jealousy on the print side of the corporation over this glitzy upstart company. Most of Time Inc. was about journalism – enlightening and edifying the public on everything and anything from politics and economics to sports and entertainment. HBO, on the other hand…that was Hollywood.
The separate quarters a dozen blocks away from Time Inc. helped foster an air of independence which HBO would always strive to maintain, even after Time Inc. became Time Warner. Time’s print brands – magazines like Time, Sports Illustrated, and Money – all shared a low-key journalistic culture. HBO had its own character; young, vibrant, showy, and free-spending, and with the earning power to justify it.
But we lost something in that move downtown, too. It was a sign that the company was growing up, maturing. In the 20th Anniversary brochure, Bill Roedy, then an HBO vice president of Affiliate Operations, recalled it as well: “The move to the HBO building was quite a significant cultural change for us…We had a new building, but we sort of lost our closeness.”
The building looked impressive, was even written up in several architectural and design magazines, but it also brought with it a more corporate seriousness and pettiness. Now, offices mattered. “Well, you can’t have that office because that’s a v.p.’s office with four windows, and since you’re a manager, you can only have an office with three windows.” And the big, shared opened spaces and sense of community were diminished as well. We had gone from being an enterprise to being a business, and with that, the halls had become a little less fun.
Undoubtedly there had always been competition and politicking and turf wars between company divisions (what organization with more than two people in it doesn’t have competition and politicking and turf wars?), but as the company’s divisions staked out their geographical areas in the new building, each seemed to develop its own, separate culture.
You could tell what department somebody worked in by their unofficial uniform. The buttoned-down people from Legal and Business Affairs wore conservative ties and white shirts pressed so stiff you could’ve shaved with the creases. The brassy crew from Sports went with a Larry King kind of look: suspenders and power ties but no jacket. Original Programming went for a Hollywood black-on-black motif, while the gang in the Art Department, which designed the company’s marketing and promotional materials, looked like a bunch of NYU Fine Arts students (I remember one guy who used to keep a pet rat in an aquarium in his office).
And as for the L.A. office, that was a world unto itself. I remember one of my bosses coming back from an L.A. trip and as the staff gathered for a briefing on his excursion to the west country, the first question he was asked was, “So, what’s it like?”
He smiled wryly and said, “They think you’re a fucking intellectual if you read The New York Times.”
Still, times were good, business was booming, money was rolling in.
And then it wasn’t.
It was so often referred to as “hitting the wall” that it became a kind of quasi-official term, the way saying The Depression could mean only one economic downturn.
It was 1984, we were still settling into our new digs on 42nd Street, and there was a certain amount of hand-wringing over the money the Columbia exclusivity deal was costing the company. But, that was a situation we could tough out until the deal expired, and from there on out we’d learned our lesson about negotiating ourselves some kind of protection in these exclusivity arrangements.
Except that the company had stopped growing, and it seemed to happen almost overnight.
The company hadn’t had a bad year since it had gone on the satellite in 1975. Because of the company’s explosive growth in those intervening years, few in the company had any kind of experience with downturns, let alone one so stunning in its size and suddenness. The bad news was consequently nothing less than a corporate-wide trauma, an apocalyptic sense of the world as we knew it coming to an end.
In the 1990s, HBO CEO Michael Fuchs would look back on those years and say of them, “The way HBO reacted to adversity as an organization says a lot about the spirit at the core of this company. We didn’t get mad, we got smart.”
Maybe that’s how it was on the executive floor, but in the halls…like I said: apocalypse, doom, end of the world as we know it.
And with that went the first layoffs in the company’s history: 125 heads (if I remember correctly, that was somewhere in the neighborhood of 8-10% of the company at the time). The company handled the layoffs as graciously and generously as I’ve ever seen it handled, but for a corporate population which had, in large part, never been through a bad time, it was both a mournful time…and a scary one. At the time, there was no guarantee times would get better, and the understandable fear of them getting worse.
In retrospect, at least part of the problem could have/should have been predicted. It was a matter of math and finite space.
HBO has the lowest monthly churn rate of any of the entertainment-driven premium services, “churn” being the number of subscribers lost and which have to be replaced. In the 1980s, HBO’s churn was two percent per month, which doesn’t sound like much, but multiply that times 12 months and it meant HBO lost almost half its subscribers each year. About half of those drop-outs were relocations – people changing residences – and we usually got most of those back. But that still meant HBO had to replace nearly one-quarter of its subscribership each year just to stay even.
After 1975 when HBO went on the satellite, replacing even such hefty numbers wasn’t that much of a challenge. New cable franchises were opening all the time, and typically HBO could count on getting one out of every two cable subs to also pick up HBO.
The predictable, finite space part of this equation is that it was only a matter of time before cable hit its saturation point; that cable companies had cabled whatever territories were worth cabling. Because cable growth in the late 1970s had been so explosive, open ground had gotten eaten up incredibly quickly, and so the slowdown which came in 1984 was both massive and sudden: we’d hit The Wall. To put it in more statistical terms, HBO, which had always been the pay-TV growth leader, hadn’t pulled in less than one million new subs in a year since 1976. In 1985, the service grew only by 100,000 new subs, the lowest rate of annual growth since 1974 i.e. The Wall.
Saturation wasn’t HBO’s only problem. The company was being hit on two flanks, and the slowdown in new-builds was only one of them.
The other? For the first time, pay-TV was no longer the only game in town when it came to in-home movie entertainment.
The first video cassette recorders (VCRs) for home use came onto the market in the 1970s, but they hardly shook up the entertainment business. They were as big as a medium-sized suitcase, clunky, there was, at the time, no pre-recorded content available for them, and they were head-spinningly expensive ranging from $1400 to over $5000 (keep in mind, that’s in 1970s dollars).
In time, all of the things we’re used to seeing happen with more contemporary technology like cell phones and personal computers happened to VCRs: they got smaller, sleeker, and, most importantly, cheaper. Toward the end of the VCR era in the 1990s, you could find deals on a machine for a hundred bucks and change.
By the 1980s, HBO – through what the company was investing in motion picture production, pre-buys, and licensing agreements – had become one of the largest, single sources of revenue for Hollywood, putting somewhere around a $500,000,000 into the movie business annually. If you have trouble reading digits, that’s a half-billion dollars. And then the movie business got a second kick-in when movies went to commercial TV. Home video promised them yet a third payday. Only for it to work, it had to come before pay-TV.
The usual clockwork was channels like HBO received movies 12 months after their theatrical release. Hollywood now saw a new paradigm that ran:
Pay-per-view (five months after theatrical)
Home video (six months after theatrical)
Pay-TV (12 months after theatrical)
Broadcast TV (24 months after theatrical)
While you’re keeping that calendar in mind, also keep in mind that while HBO had been tremendously successful and was better at what it did than competing services, that didn’t mean all subscribers were happy with it. To a certain extent, we held subscribers because they had no place else to go. Now that they did, home video seemed to answer their chief complaints about HBO (and the other services as well).
When I was in Subscriber Information Services, the two most frequent and regular complaints the company received were what we labeled Repeats/Returns, and Selection Negative.
“Repeats” were how many times a given movie played in a month-long period, while “Returns” were how many times a movie returned to the service over the course of its license period.
HBO usually was granted a license period on a film of a year. The license stipulated how many times HBO could play the film, and even in what dayparts. In those days (scheduling philosophies would change over the years), this played out in the following fashion:
During the first month of the license, a movie would show up on HBO with a certain amount of promotional hype behind it, and play – if it was R-rated (HBO had a self-imposed policy of only running R-rated films at 8:00 PM Eastern and Pacific Time and after) at least once in prime time, maybe two or three times if it was a particularly strong draw. It would then run another five or six times at different non-prime slots (which, for R-rated titles, meant mostly late night hours). If it was a PG (there was no PG-13 in the early 1980s) or G-rated film, it might run as much as a dozen times in the month throughout all dayparts. About halfway through the title’s license, it would get another full month of plays although prime time would be reserved for new-to-the-month features, and then another full month toward the end of its license. In between those full months, there’d be some scattered airings maybe as part of a programming stunt, or to beef up free preview line-ups.
The planning concept behind HBO was for the service as an occasional use medium: ideally, subs would pick only what they wanted to see at the time most convenient for them. It was never designed – or intended – for regular, daily, heavy viewing. Even if a sub only used the service a handful of times over the course of a month, compared to going to the movies, HBO had paid for itself.
That was the company thinking.
Subscriber thinking was something else.
Conditioned by decades of commercial broadcast TV in which every hour of every day brought something different, subs didn’t plan their HBO viewing. They tuned in randomly, daily, looking to draw more water from the HBO well than the well held.
For example, when I was in SIS, it was not uncommon to get a sub complaining that a movie they’d seen in the morning was on the service again that night. We tried to explain that our scheduling wasn’t designed with it in mind that someone was going to sit watching HBO for 12 hours at a stretch.
There was also a natural disappointment that came with having the service for any length of time. For the first few months of a subscription, everything on the service seemed new to the viewer. Over time, however, HBO’s recycling of programming became increasingly apparent, with the Repeats/Returns issue aggravated by Selection Negative.
Selection Negative can best be translated into the subscriber view that “All your movies suck.”
Truth was it wasn’t that all our movie selections sucked. What was happening was that many subs, for the first time, were becoming aware of just how many movies Hollywood turned out sucked.
I interviewed The Star-Ledger film critic Steven Whitty two years ago, and he touched on the problem:
“A typical person who likes going to the movies might go three times a month. A more casual goer; maybe once a month. A lot of people go to the movies only three times a year or so.”
Meaning that a lot of subs were getting more new movies in a month than they had been going to see in theaters in a year. HBO – even after the exclusivity wars had escalated – was getting the lion’s share of new movies for its service, and what subs were getting was a fair overall sampling of what Hollywood was turning out. That was the problem.
Most of our subs were older than the bulk of the movie-going audience. “That’s why I stopped going to movies,” they’d carp, “because all they do is make crap for kids and teenagers.” Why – since Hollywood was making so much crap for kids and teenagers – they thought things would be different on HBO – which was putting a movie theater in their living room – I have yet to figure out. Bottom line: they thought it would be different, it wasn’t, in fact because HBO was throwing so much programming at them it multiplied what they didn’t like at the movies, and so they were – understandably, I think — ticked off.
Steven Whitty remembers a joke among his friends in the 1980s that HBO stood for, “Hey, Beastmaster’s on!” (the unspoken part being, “again”). That kind of sums up what a lot of subscriber discontent was like.
In the early 1980s, subs – particularly older subs — were especially irritated because this was, after all, the post-Star Wars era when studios large and small were jumping on the space opera bandwagon. This was also the era that saw Leatherface, Jason, Freddy Kruger and an army of other miscellaneous miscreants slice, dice, maim and dismember countless teen types with a variety of power tools and farm implements. There were enough complaints on this particular point that HBO even had a form letter for it, pointing out that it was inevitable that trends in entertainment would show up on the service and that, at that time, somewhere around one-third of Hollywood releases were some kind of horror, chiller, sci fi or fantasy flick.
And then there was the issue of what exactly constituted movies that sucked and movies that didn’t. Any phone conversation or letter which began with, “Why don’t you show some good movies for a change?” typically led to suggestions which only demonstrated that “good” was a relative term.
Thirty years later, I can still remember one such letter which, after complaining about our lousy movie selection, then offered up a list of “good” movies which included every slasher gorefest released within the few previous years. Name it, it was there: all of the Friday the 13ths released up to that point, all of the Halloweens, Prom Night (1980), My Bloody Valentine (1981), Terror Train (1980), and so on, maybe two dozen such titles all told. And then this P.S.: “And some Disney movies and Jacques Cousteau specials would be nice, too.”
To sum up: All subscribers, no matter their individual tastes or schedules – be they night shift workers, stay-at-home moms, retirees – expected HBO to provide something fresh and satisfying whenever they tuned in, and they wanted it for – at the time – about $8-10 per month. And every time they tuned in and didn’t get it, they wondered what they were paying for.
If that was an unrealistic expectation, even more fantasy-like was the one that went with the complaint, “That’s why I got HBO! Because there’s nothing on regular TV!” In other words, they wanted our one channel to do what the myriad broadcast and basic cable channels couldn’t do combined! And then were ticked off when we couldn’t.
Then, riding a white horse and carrying a banner of liberation from the yoke of cable TV, came the VCR. You didn’t need cable anymore to get movies in your home! the VCR declared. Make your own pay-TV! Watch whatever you want to watch, whenever you want to watch it! Exclusivity doesn’t matter; whatever is on the video store shelves is yours to have. Repeats? Never have to happen; you have a whole video store’s inventory at your disposal! Say it with me, people: Hellooo home video; good byyyyye cable company!” And with it, HBO.
In those early years, home video was so popular, it seemed like you could rent movies from anywhere! Convenience stores, corner stores, music stores, supermarkets, even gas stations. Who needed cable? Who needed HBO?
Only that’s not how it played out. Oh, for a few years, home video looked like the way to go and every trade reporter and his brother/her sister was writing that the VCR spelled DOA for cable TV and especially the premium services. But everything has its downside and home video had one, too.
Yes, you didn’t have to futz around with the limitations of exclusivity, but side-stepping exclusivity didn’t open the available variety all that much. And speaking of variety, eliminating the cable middle man didn’t change what movie companies were making. Turned out that, percentage-wise, there was just as much crap down at the video store as there was on HBO.
You couldn’t watch whatever you wanted to watch because of what people in the home video trade call “depth of copy.” Simply put, that means how many copies of a particular movie a video store keeps on the shelf.
Movie companies didn’t get any money when you rented a movie from the local Blockbuster. The only time they got paid was when a Blockbuster store bought a copy of the movie. So, the movie studio usually put a hefty price on each of those cassettes. The local Blockbuster would buy one for $90, rent it for $2.49 a throw which meant the store didn’t begin to turn a profit until that copy was rented something like 60 times (and I’m not even figuring in store overhead costs). If the store had more than one copy of the movie, it needed 120 rentals just to break even and so on and so forth. Each additional copy provided more convenience for video store patrons, but required more “turns” of that title to break even. Therefore, the store only kept as many copies of a title on hand as it thought it could successfully rent. That might’ve been a half-dozen copies of the latest Indiana Jones, two-three copies for most big studio pictures, and one copy of anything else. What that meant for the consumer is that if they got down to Blockbuster too late on Friday night, their choices were pretty well limited to work-out videos (and we haven’t even discussed the hassle of going down to the store for the rental, and going back to return it).
Ok, that’s not strictly accurate or fair, there was a bunch of other fun stuff on the shelves: oldies, not-so-oldies, classic TV shows, direct-to-video movies. But, the point remains that while video stores added still another choice to the home entertainment menu, in the long run, once the novelty wore off, it turned out to be an adjunct to cable — not a replacement.
But that plateauing of VCR excitement was years away. In 1984, potential subs were giving us the finger as they ran out to buy themselves this new home entertainment gizmo and swing by Blockbuster or Sam Goody’s, Wherehouse, Coconuts, Hollywood Video, Movie Gallery to grab a movie or two for the weekend.
One of the keys to HBO’s survival in that reconfiguring environment– and the ultimate reinvention of the brand — was to offer consumers something they could get nowhere else; not on TV, not on other premium channels, and certainly not on home video.
An Original Voice
“We didn’t get mad, we got smart,” HBO CEO Michael Fuchs said about hitting The Wall, looking back at HBO stalling in 1984 from the vantage of the early 1990s. Actually, a lot of the rank and file didn’t get mad or smart; we’d seen 125 of our friends and colleagues get shown the door when the company had suddenly flatlined after eight years of phenomenal growth, and what we got was scared.
But it’s to the credit of HBO’s execs that whatever anxieties they may have had, they showed no panic or even nervousness in public. Instead, they poured any concerns into energetically and immediately addressing the question of, “What do we do now?” The world we knew had changed and there was no going back to the Gold Rush days of the late 1970s and early 1980s. The company required a humongous re-think about its business re: what it did and how it did it.
One of the strategies that came out of that re-think was how the service was sold. “Well, ok, then,” this particular re-thinking ran, “if the people aren’t chasing the cable truck down the street anymore, we’re going to start chasing the people.”
Time had been working in the company’s favor. As the ’80s had worn on, VCR owners had found home video had its own, annoying limitations: depth of copy issues, all that slogging back and forth to rent and return videos, late fees, and the nasty surprise that a hell of a tab could be run up with surprisingly few rentals. The novelty was wearing off, the VCR honeymoon was over. About that same time, HBO began reminding the consumer – in not so subtle “HEY, YOU!” fashion — that for pennies per title and with the convenience of never leaving home, maybe pay-TV was still the better bargain.
In a 25th Anniversary piece for Multichannel News, one-time HBO president of the company’s U.S. Network Group, John Billock, remembered that in the truck-chasing days of the business, “…anything beyond a radio ad or newspaper ad slick was totally over the top for this industry…” But by the late 1980s, anything short of a media blitz was considered half-hearted.
In 1985 – the very next year after the company hit The Wall — HBO initiated its first in a series of massive summer promotional campaigns marked by a blizzard of direct mail backed up by aggressive telemarketing and the company’s first national TV ads (why summer? The kids are home from school with nothing to do, and it was repeat season for the broadcast networks – their weakest schedule of the year. The summer campaigns were a well-timed counterpunch). Within two years, HBO was one of the largest direct-mail marketers in the country; by 1992, the company had crammed over 640 million pieces of junk mail into American mailboxes, and was making 10 million telemarketing calls each year. As annoying as all that mailbox litter and dinnertime-interruptus calls may have been, they worked. The company would never see the kind of explosive numbers it had experienced in the late 1970s and early 1980s; there was too little growth room left in the cable universe for that. But, the company was growing again, if not spectacularly, at least regularly.
In a 10th Anniversary commemorative history of the company (HBO: The First Ten Years), Chapter 3 – “Creations” – begins thusly: “If a company offers an inadequate product, it will ultimately gain little benefit despite the most persuasive marketing efforts, efficient delivery systems or powerful finances.”
This was usually translated in a simpler, oft-repeated mantra I used to hear in staff meetings as marketing “…only gets ‘em in the tent.” Once HBO got them there, it had to have something to show them, and the programming model had to change to fit the new home video-flavored market. Research was showing that the major home use of the VCR wasn’t for playing rented movies, but for time-shifting: recording programming from cable or broadcast TV for later viewing, and/or to become part of a home library (an example in extremis: I knew one guy with a floor-to-ceiling shelf unit six feet wide crammed with hundreds of movies he’d recorded off his cable channels). The concept behind the new model, then, was to provide subs with a steady diet of things to watch and/or tape by bulking up the number of titles in a month while reducing repeats.
The less touted flip side to this change was it didn’t mean HBO was acquiring more new movies. A lot of that bulking up came from licensing studio library product. The number of new movies premiering monthly didn’t change, and those premieres were airing about the same number of times each year as they had under the old model, only now they were appearing fewer times in a month, but in more months. To some subscribers, the stretching out of airings over the year made it seem like the more popular movies i.e. the ones you were most prone to remember were hardly ever off the air. That particular irritation was multiplied for HBO/Cinemax subscribers since the two services routinely shared top-end movies although never in the same month. With the two channels tag-teaming high-profile titles – first it was on HBO, then next month on Cinemax, then back on HBO — it not only seemed but was the case that if you had both channels, there were movies that were appearing almost every month.
Another part of the re-thinking that had come out of that head-ringing Wall-hitting was that it was time for Home Box Office to be more than what it had been. The result was a strategic change in the evolutionary course of the company; one which would redefine the very nature of what HBO represented to the consumer, and which would, in time, kick off the greatest change in television since HBO had gone on the air.
The transformative figure in HBO’s history is Michael Fuchs. A lawyer by training, Fuchs had come to HBO in 1977 from the William Morris Agency to work in HBO programming (which, at the time, mainly meant movies). By 1984, Fuchs had taken the company’s top spot, replacing Frank Biondi, ousted in the wake of the budget-draining exclusive deal with Columbia (ironically, Columbia’s owner at the time – Coca-Cola – would later hire Biondi to head up Columbia).
Look through news stories concerning Fuchs and the descriptives “impact player,” “a builder,” “take-charge executive” will come up. Dig around long enough and you’ll also see such labels as “arrogant,” “abrasive,” “blunt,” “confrontational, “high/heavy-handed.” My personal favorite: “…(an) ego as big as the Ritz.”
Fuchs had about him his loyalists who swore by him, including Bridget Potter, Fuchs’ original programming chief (and, as I remember, the only woman at the time heading up programming for a major network), but there were those in the company who genuinely feared the man. Fuchs may not have actively cultivated that kind of climate, but neither was he one to nurture a warm and fuzzy feeling in the halls. I recall one incident when my boss took a draft of a speech we’d been working on for Fuchs in for the CEO’s review. When my boss came slumping back, I asked, “What’d he say?” knowing by his slope-shouldered demeanor it couldn’t have been anything good.
“Does the phrase, ‘piece of shit’ meaning anything to you?”
But whether one hated, feared, or admired Fuchs, no one questioned his fierce commitment to HBO. He protected the company like a mother bear, maneuvering to maintain HBO’s independence even as the company’s parent went through one massive reconfiguration after another with its mergers with Warner Communications in 1989, and basic cable powerhouse Turner Broadcasting in 1996.
During the company’s traumatic Wall-hitting year of 1984, Time Inc. had sent one-time HBO chief Nick Nicholas (fearfully dubbed “Nick the Knife”) – who had since “moved uptown” to become president of Time Inc. – back to HBO to oversee cutbacks and layoffs. One senior Human Resources officer told me that it was Fuchs’ efforts which kept Nicholas and Time from exacting anything more than a minimal amount of blood from HBO.
Fuchs was just as committed to a long-term vision for the company transforming HBO from a relatively simple movie exhibition platform to a more multifaceted, more far-reaching organization. Part of that vision was to elevate original programming from little more than in-between-the-movies filler to one of the company’s major draws.
As early as 1982, in HBO: The First Ten Years, Fuchs was anticipating a more original programming-dependent future for the service:
We were sensitive to what was around the corner – that explosion of television channels and other forms of entertainment. We knew we would have to be unique. We wanted our programs to be different, even to look different. We wanted people to glance at our shows and say, “That looks like HBO.”
If you stretch the definition of “original programming” to include sports, originals had been part of the HBO mix since the night it first went on the air. In fact, it’s very first program, if you recall, had been a Rangers v. Canucks hockey game. And if you don’t want to count sports (and this will make you wish you did), HBO’s first original offering, premiering just four months after the channel’s inaugural airing, was a music concert…though not exactly a big event spectacular starring headliners like Tina Turner and Barbra Streisand or a who’s who of all-time great rockers saluting the Rock ‘n’ Roll Hall of Fame – the kind of ultra-glam stuff which would eventually become one of the company’s signatures. Instead…
Ladies and gentlemen, for your listening pleasure, live from the Allentown Fairgrounds, sit back and enjoy the Pennsylvania Polka Festival starring those lederhosen-wearing lords of the two-step, those Bohemian bards of the ballroom, those finger-flying aces of the accordion…“Wally and the Polka Chips!”
I kid you not.
In those early years, the company had a tactical programming problem: only a small number of movies were available to HBO. At the time, the Federal Communications Commission had restrictions on what movies could be aired on pay-TV (titles under two or over ten years old). More restrictive were nervous movie distributors who still viewed the nascent service warily and were reluctant to license their heaviest-drawing titles to pay-TV. Out of necessity, HBO had to find something to supplement its movie programming.
Sports – which we’ll get to in a bit more detail later on – was, as I said, a part of the mix from the start; they had, actually, been a part of Chuck Dolan’s original vision for the service. As for original programming other than sports… Well, since there’d never been a channel like HBO before, nobody on the fledgling service’s small programming crew had any real idea of what would work…and what wouldn’t.
In its 10th Anniversary A Decade of Innovation commemorative album, the company bragged that by 1974, “HBO was blazing new trails.”
Yeah, maybe, but when it came to original programming…not so much. Those blazing new trails included instructional shows on skiing and painting, travel, wine tasting, celebrity cooking, a not-bad kid’s show called “Martha’s Attic”…all in all, something between PBS and the kind of basic cable TV people were subscribing to HBO to get away from.
Which didn’t bother subscribers that much. They often looked at these programs as so much filler between the movies, something passably watchable if there was nothing to watch elsewhere on the cable dial and you got a buzz watching Women’s Lib icon Gloria Steinem teach you how to stir fry.
With that kind of motley low-fi mix, it was unsurprising that sports early on became HBO’s original programming high card, although even in that area the HBO of then looked considerably different from the HBO of even just a few years later.
Again, it was a question of figuring out what would work, what wouldn’t…and also what the small, yet-to-be-profitable service could afford. HBO: The First Ten Years tells of a sports line-up which included everything from hockey and basketball to rodeos, demolition derbies, harness racing, bowling, swim meets, and even master stunt motorcyclist Evel Knievel’s failed attempt to jump the Snake River Canyon in a rocket-powered cycle. If the line-up had a catch-as-catch-can feel, HBO’s execution left something to be desired as well. The broadcast networks had, at the time, nearly a quarter-century of experience in sports broadcasting. HBO; a quarter-century less.
In HBO: The First Ten Years, sports producer (and later chief of HBO’s interstitial programming) Tim Braine tells of covering the Cowtown Rodeos in Woodstown, New Jersey (leave it to the still floundering HBO to go to Jersey to cover rodeo) where he had to signal the bronc riders to be released from the chutes “…so we wouldn’t waste any videotape by shooting too soon.” In the same book, there’s another story about the HBO crew removing the small pennants hung across a pool during a swim meet because they blocked their cameras, not realizing the flags were there to signal backstrokers they were close to smashing their heads into the side of the pool…which, thanks to HBO, they did.
Experience would come. Settling on the sports that would work for HBO, however, was a more strategic, intellectual exercise. Once HBO went national with its move to satellite, team sports didn’t seem to make sense. The broadcast networks, sports channels and regional services were already providing coverage of all major team sports and at a quantity that made HBO’s joining in with its small contribution seem silly. HBO needed something that would play nationally, that would help build the brand, and that – most importantly – could become singular to the service. Boxing seemed to fit the bill (or, to be more pugilistically appropriate, fit the card).
The service had had several such singular ring successes in 1973 with the Jimmy Ellis/Earnie Shavers heavyweight bout, and an even more electric match-up between George Foreman and Joe Frazier. Boxing cemented itself as an HBO cornerstone in 1975, when the classic “Thrilla in Manila” heavyweight battle royal between Muhammad Ali and Joe Frazier inaugurated coast-to-coast satellite delivery for the service.
A lot of the credit for turning HBO Sports into one of the company’s programming keystones goes to Seth Abraham: a man Michael Fuchs once described to Seconds Out.com as “…one of the pioneers who built the modern HBO.” A native New Yorker with a lifetime love of sports, Abraham had been working as special assistant to the president of Major League Baseball Promotions in 1978 when then vice president of original programming Fuchs siren-songed Abraham into coming over to HBO. Abraham would eventually wind up president of HBO Sports (in 1989, after Time’s merger with Warner Communications, Abraham would be named president of Time Warner Sports, a post he held until he left to become chief operating officer of Madison Square Garden in 2000).
Abraham streamlined HBO’s sports card exchanging quantity for quality, doing fewer things but doing them extremely well. As Abraham put it in a 1992 interview for Multichannel News, “If ESPN is a cafeteria, HBO is a five-star restaurant.” Abraham and his team would establish long-term relationships with boxing headliners like Mike Tyson, George Foreman, and Sugar Ray Leonard ensuring a steady diet of top-drawer fights for the service, while always keeping an eye out for the next, rising Tyson, Foreman, Leonard, et al. And the guys once responsible for the swim meet mass head-bashing would become recognized as one of the best – if not the best — at covering the sport anywhere in television.
For years, HBO also provided same day coverage of the semifinals of both the U.S. Open and Wimbledon tennis championships, leading off with Wimbledon for the first time in 1975. Again, the channel’s coverage was acknowledged as second to none, but with the broadcast networks holding on to coverage of the final matches, and with the amount of airtime on the channel the semis ate up (several hours a day for a week), tennis coverage lost its strategic value over time, and HBO discontinued first the U.S. Open, and then, eventually, Wimbledon.
As impressive as its boxing coverage was – in terms of acclaim and ratings numbers – a more low-key but just as impressive success was the long-running Inside the NFL. It was a stunningly simple show. Premiering in 1977 and airing weekly during the football season, the show initially had all the production value of a kid’s lemonade stand. The bulk of the half-hour show consisted of slo-mo highlight reels of the previous Sunday’s NFL games compiled by NFL Films, with the show’s two hosts (the original duo were ex-Philadelphia Eagle Chuck Bednarik and veteran sportscaster Al Meltzer) providing some in-between commentary. As simple as the formula was, it was consistently engaging. Hosts would change, production values improve, and the show would eventually expand to an hour and begin including more feature pieces reducing the role the NFL highlights played on the show in the process (much to the disgruntlement of long-time purist fans). In 2008, HBO cancelled the show after 31 seasons making it one of the longest-running series in television (Showtime picked up the show and it remains a regular feature of the service at this writing).
HBO was eventually able to take the example of Inside the NFL – a sports show that didn’t involve live sports coverage – and broaden the concept with a fair amount of success into the magazine-formatted Real Sports with Bryant Gumbel and On the Record with Bob Costas (which would evolve into Costas Now), and the unique sports documentary series produced in conjunction with NFL Films, Hard Knocks, a weekly behind-the-scenes look following an NFL team through its pre-season. All these programs stayed true to Seth Abraham’s strategy of doing a few things, but executing them well.
Outside of the sports arena, HBO played around with a number of formats, many of which were, in effect, stripping out the elements from the old variety show concept and building entire shows around them. Variety shows like Hollywood Palace and The Ed Sullivan Show – once a staple of broadcast TV – were just that; showcases which offered some music, some comedy, a little of this, a little of that. HBO’s offer to subs was, Why settle for just a couple of minutes of what you like best?
Not having to worry (that much) about ratings, HBO could do things the broadcast nets couldn’t, like provide an entire show of magicians, or ventriloquists, stand-up comics, as well as full-length music concerts. The two biggest areas of success for HBO out of this buffet were music and comedy, but the evolving cable programming arena began to erode their worth.
HBO had had a huge success with The Bette Midler Show in 1976, a commanding one-woman mix of music and comedy from the titular star. Midler’s show kicked off HBO’s Standing Room Only series of concerts, but the format had its limits. At one point in the early 1980s, HBO was taping a concert almost every other month, many of them featuring then chart-topping rockers like Boy George and The Who. But with the immediate success of MTV’s rollout in 1981, the center of the pop/rock universe shifted to the new upstart channel. HBO’s SRO strategy became one of less is more: fewer concerts, but what the company described as “world class” events i.e. Elton John Plays Central Park, Live in Concert: Tina Turner (recorded at a mammoth outdoor concert in Rio de Janeiro), a performance from Barbra Streisand’s first concert tour in 28 years, an all-star salute to the Rock ‘n’ Roll Hall of Fame, and special fund-raising concerts like Farm Aid and Welcome Home, an all-star event supporting programs for veterans of the war in Vietnam.
HBO had hit another programming home run out of the box with its first On Location comedy concert in 1975 starring Robert Klein. HBO could not only offer subs a comedian’s performance in full – the way you’d see it in a comedy club or theater – but uncut. When George Carlin appeared on HBO for the first time in 1977 (he would do 11 more concerts for the service), it was the first time stand-up comedy’s Angry Man could perform his classic “The Seven Words You Can’t Say on Television” on television.
The On Location comedy specials, and particularly the Young Comedians entries which featured rising young talent, provided breakthrough introductions (or at least major boosts) for talents which would soon become major names in entertainment: Andy Kaufman, Steve Martin, Roseanne Barr, and a Robin Williams who was just as much the free-riffing maniac as a Young Comedian as he would be as one of comedy’s superstars.
But cable took a toll on the On Location format as well. As the cable spectrum expanded in the 1980s, stand-up comedy seemed to be the go-to format for every channel but ESPN and The Weather Channel. It was relatively cheap and easy to produce (part of its appeal to HBO), and the promise of 30-60 minutes of yuks was a consistent draw. Stand-up even started to help fill the airwaves of public access TV with footage from local comedy clubs. Eventually, the oversaturation took its own toll (try to find stand-up now outside of Comedy Central), and HBO’s comedy strategy mirrored its music strategy: a few big concerts a year featuring major comedy performers.
One genre which gave HBO an early programming credibility was documentary programming. In 1979, the service premiered a six-part documentary series called Time Was, hosted by Dick Cavett and an energetic green screen which dropped him in the middle of the seminal events of six decades, starting with the 1920s. In a way, Time Was was a less glib, less mocking version of VH 1’s I Love the 70s/80s/90s shows. It turned out to be such a popular mix of entertainment and education that it led to two more similar series, Time Was and Yesteryear.
The success of the Cavett shows suggested a hole in broadcast TV programming HBO could exploit, and the opportunity was confirmed by She’s Nobody’s Baby, a 1981 doc produced by Ms. magazine and hosted by Alan Alda and Marlo Thomas, which traced the changing role of American women in the 20th Century. The doc earned a prestigious George Foster Peabody Broadcasting Award (the Peabodys are awarded to “…recognize distinguished achievement and meritorious service by broadcasters…”), making HBO the first pay-TV service so honored.
She’s Nobody’s Baby opened the door to a long, acclaimed line of HBO documentaries, many produced under the channel’s America Undercover banner. It was one such doc – Soldiers in Hiding (1985), about the plight of Vietnam vets who, still traumatized by their war experiences, were living hermit-like lives in the American woodlands – which upped the company’s programming prestige a few more notches by winning an Academy Award for Best Documentary: cable TV’s first Oscar (in a nifty bit of strategizing, HBO would release promising documentaries on a minimum number of theater screens to qualify for Academy Award contention).
There were also any number of stand-alone docs, programs which went beyond the usual America Undercover format and budget i.e. the heart-breaking Dear America: Letters Home from Vietnam (1987), and the even more poignant Common Threads: Stories from the Quilt (1989).
Beginning with its first Consumer Reports special produced in 1980, the service would, over the years, turn out a series of informational documentaries (some designed specifically for young viewers) dealing with everything from product safety to money management and the dangers of smoking.
One of the company’s most powerful info docs was AIDS: Everything You and Your Family Need to Know…But Were Afraid to Ask. Produced at the height of the AIDS epidemic in 1987, when many (if not most) Americans were misinformed, under-informed, or completely uninformed about the outbreak, AIDS: Everything You and Your Family Need to Know… was a commendable, straight-forward attempt to clear the air on the topic (the company’s concern was genuine; many of us knew someone in the company who was either HIV+, had full-blown AIDS, or was dealing with someone close to them who was ill…and, in those early years, many of us also lost a colleague to AIDS). With the stern, bearded visage of then surgeon general C. Everett Koop addressing the camera, the doc set aside moral judgments and dispelled a lot of panic-igniting misperceptions about the disease with plain, calm talk. It was not the last time the company would deal head-on with a controversial topic, sometimes with multiple programs (AIDS, Vietnam veterans, the homeless, and the wars in Iraq and Afghanistan were issues to which – with an almost missionary zeal – the company would focus combinations of documentaries, special event programming, and scripted programs, sometimes over periods of years), and those instances were invariably the programmer’s finest hours.
Still, HBO’s documentaries have not been without their controversies: accusations of bias, distortion, and sometimes sensationalism, and there were times it seemed the company’s fearless head of documentary programming, Sheila Nevins, a one-time documentary and news producer herself, was as intent on disturbing the audience as engaging them. But, on balance, these hundreds of programs represent an impressive body of work which have amassed dozens of Emmys, Oscars, and Peabodys, among other awards, and have gone a long way to making the service one of the most honored in television as well as one of the most respected documentary producers in American media.
But it’s worth noting – as anyone in Hollywood can tell you — that acclaim and respect, sadly, doesn’t always pay the bills. HBO documentaries rarely draw large audiences which, considering their typically low cost, is something the company has always been able to live with. In that paradigm, they more than pay for themselves in the prestige and acclaim they bring to the service. But in Real Sex, Nevins found herself a bill-payer.
Running from 1992 to 2009 on an occasional basis during late night dayparts, Real Sex was a magazine-format series that frankly (meaning explicitly) looked at any variety of matters sexual, from the mildly kinky (a masturbation clinic for women) to the bizarre (eerily life-like sex dolls). As might be expected, there were subs who found the shows repugnant and offensive, but even more wanted to know where to buy a lot of the, ahem, devices, appliances, and exotic wardrobe items exhibited on the show. Nevins never apologized for Real Sex, taking the stand it presented a healthy, open-minded attitude about its topics, however off the sexual mainstream some of its subjects might be. Michael Fuchs often plainly explained one of the brutal realities of TV, even for a channel operating outside the usual ratings-ruled rules of broadcasting: that shows like Real Sex paid for shows like Dear America and Common Threads.
In 1978, as a Christmas present to its subscribers, HBO offered Emmet Otter’s Jug-Band Christmas, an utterly charming puppet-populated creation by Muppet maestro Jim Henson. This holiday tale about a bunch of musical beavers was sweet enough for kids, entertaining enough for their parents to watch along with them, and executed well enough to win an ACE Award (Award for Cable Excellence: the cable industry’s own awards created in the days before cable programming was eligible for Emmys) and an International Emmy.
The success of Emmet Otter brought Henson back to HBO a few years later in 1983 with one of the true classics of children’s programming, right up there with Henson’s Sesame Street Muppets and his long-running The Muppet Show, and just as fondly remembered: Fraggle Rock. Another ACE/International Emmy-winner, the weekly Fraggle would run for five years on HBO and later appear on TVs around the world.
Despite rare misfires like the well-intentioned but lethally bland Seabert the Seal Pup, HBO would produce a growing body of respected work not only for children (like the much-praised Brain Games and Happily Ever After: Fairy Tales for Every Child – a multicultural revisiting of classic fairy tales), but for teens as well; shows ranging from frank documentaries to true story-inspired docudramas under the Lifestories and HBO Family Showcase banners on everything from AIDS and STDs to homosexuality and teen suicide. The same kind of parents who objected to sex ed in schools weren’t any happier about having it on their HBO service, but the positive press earned by the shows and the local events HBO often sponsored in conjunction with them more than made these presentations (another comparatively low-budget item) worth their while.
Now, let me tell you the dirty little secret about HBO’s family programming. With the notable exception of Fraggle Rock, kids didn’t watch it…at least not in appreciable numbers. Kids didn’t like it. Much of the service’s kid entertainment was like broccoli; good for a youngster’s intellectual nutrition, but not so much fun to eat. Meanwhile, over at Cartoon Network and The Disney Channel, there was a full buffet of intellectual Twinkies. HBO’s family originals won parental respect over competitors’ hands down, but they could never match the drawing power of a Spongebob.
It didn’t matter. Parents felt good knowing the broccoli was on the menu, even if they didn’t make their kids eat it. In that sense, children’s programming was as much a marketing tactic as a programming strategy.
By the 2000s, however, the effort and money expended seemed worth the trouble less and less. The Disney Channel had gone from a premium service to a basic channel in 1997, the same year News Corp. bought the Christian Broadcast Network’s Family Channel and transformed it into Fox Family (later bought by Disney/ABC in 2001 and re-branded ABC Family), and Cartoon Network – another Time Warner property through the Turner networks – had been on the air since 1992. By the 2000s, all of them had aggressively and successfully expanded their original programming leaving HBO’s broccoli-flavored offerings increasingly left uneaten on the plate. A mark of how reduced the profile of HBO’s kid-friendly programming has become can be seen by tuning into HBO Family, the service’s family-dedicated multiplex channel. Most of the channel’s original programming is made up of titles recycled from as far back as the 1990s if not further.
In its early years, HBO’s original programming consisted almost entirely of either unscripted (concerts and sports) or reality-based programming (documentaries). Scripted comedy and drama, well, that’s the cream of TV entertainment. Getting a scripted show to work is not unlike getting the planets to align: the right idea executed by the right talent and presented in the right format on the right platform rightly scheduled and promoted. If you get those planets to align, then you have to hope they align week after week and episode after episode, and then season after season.
And then you have to hope the audience finds the show…and likes it…and likes it week after week and episode after episode, season after season.
How hard is that to pull off? The majority of new TV shows – sometimes close to 100 – introduced every fall fail, some even before they’ve gotten through the 13-week fall season. Few – if any – of the survivors are breakout hits.
So, there’s a young HBO, casting about for original programming that might be distinctive to the service, and involves something more than two big, sweaty guys punching hell out of each other or George Carlin telling everybody to fuck off. HBO came up with the classy-sounding idea of airing stage plays.
I’m not talking about adaptations of stage plays. I’m talking about videotaping plays while they were being performed in theaters in front of a live audience. It was not an especially novel idea; A & E had done some of it in its early years when it was still trying to program as much Art as Entertainment, and PBS had been doing it for ages. The fact that years of PBS videotapings of stage plays had never set viewers buzzing around the water cooler the next day should have been a tipoff that theater might not be that much of an ace for HBO to play.
Still, in 1981, HBO gave it a shot presenting Jack Heifner’s off-Broadway play Vanities under its Standing Room Only umbrella. The reviews were nice, the viewer response strong enough to suggest maybe this was, after all, a workable niche for the service, and the channel began turning out an intermittent stream of taped stage shows.
But theater on HBO suffered many of the same drawbacks theater on TV anywhere suffers, one being that, while trying to shoot a live in-front-of-the-audience performance, a taped stage play looks like, well, a taped stage play. It’s visually bland, physically unimpressive, and the performances seem too big and loud for the living room TV.
The bigger issue was access to strong-drawing material. Theater producers didn’t want to license TV rights to buzz-generating new plays still in their first runs (Vanities was five years old when HBO aired it, and had concluded its off-Broadway run) for fear it would cut into their box office receipts. Consequently, HBO wound up licensing older (sometimes really old) plays, like a production of William Inge’s 1955 Bus Stop. With an acclaimed 1956 movie version starring Marilyn Monroe still showing up on TV, who needed HBO to make the same stop?
The channel’s 1982 big-budget taping of Camelot seemed to be a bet-the-farm effort for the concept of stage plays on the service. For the first time, HBO had a biggie on its hands. The beloved Alan Jay Lerner musical was in the midst of a Broadway revival, the cast headed by a well-known star – Richard Harris, who’d starred in the 1967 film version – and a performance would be staged specifically for the cameras. But the small screen (and they were all small screens in those days) couldn’t capture the electricity or opulence of a large-scale Broadway musical in a majestic Broadway house, and the performances still came off outsized and booming, and while it may have been a current production, it was still a 22-year-old play. It was, for HBO, a well-reviewed stiff.
And with that, for all intents and purposes, the final curtain came down on HBO Thee-yah-tah.
As I said, a TV series – even a lousy one – is an enormous logistical and creative feat to pull off. A standard 13-week season costs more, puts its personnel through a more grueling schedule, and devours more material than all but the most expensive blockbuster movies. A series has to work every demanding week…but a movie only has to work once.
Which is undoubtedly why HBO scored its most notable early successes in scripted programming with original movies: it was easier. Now, I said easier; not easy.
Producer Gerald Abrams says it was some of HBO’s early movies which flagged him that this still relatively new service was something “special.” I doubt Abrams means the earliest HBO original movies.
The first original film aired by the service was The Terry Fox Story (1983), a true-life drama about a young Canadian (Eric Fryer) who, having lost a leg to cancer, attempts to run across Canada to raise money for cancer research. Robert Duvall in a supporting role gave the movie some star wattage, and it was, on the whole, a noble, respectable, if unexceptional biopic.
Maybe Terry Fox was no great shakes, maybe it wasn’t any better – or any more unique – than the average run-of-the-mill made-for-TV movie of the day…but it was infinitely better than the movie that was supposed to inaugurate HBO’s feature filmmaking.
Right of Way (1983), starring two Old Hollywood greats – James Stewart and Bette Davis — was intended to announce HBO’s entry into the movie-making game in a big way. Stewart and Davis play a couple planning a joint suicide after Davis’ character learns she’s terminally ill. After viewing the finished film, HBO gave a similar diagnosis to the movie, airing it as its second original film with minimal hype and its listing buried in the service’s HBO Program Guide, almost as if the company was hoping people would miss it.
Through the company’s first few efforts, Terry Fox’s bland nobility was beginning to look like the best HBO could do. The company’s output seemed restricted to a range of so-so to just-plain-sucks with pics like To Catch a King (1984), The Blood of Others (1984), The Glitter Dome (1984), Blackout (1985), Draw! (1984), and the phenomenally abysmal supernatural thriller, The Cold Room (1984). The critical consensus was HBO was much better at airing movies than making them.
Years later, when the company’s reputation as a TV movie producer had acquired some shiny gold plate as well as a few Emmys and other accolades, I asked one of our veteran PR people who’d been around for those first original flicks how we’d come to make so many crappy movies back then.
“Because we could.”
Which requires some explanation.
If you were a producer with a property you wanted to make, the first place you went was to the major movie studios, which was a no-brainer: they paid the best, they got you big stars, big-name directors, a big, heavily-promoted release. If they passed, you worked your way down through the movie-making hierarchy, to the next tier of smaller studios, and so on. When you struck out pitching your project as a big screen feature, then you went to the Big Three broadcast networks because they were the next best payers. And then, when you struck out with them…well, that’s when you went to HBO. Keep in mind that, at the time, HBO had less than 20 million subscribers (less than 10% of the U.S. population at the time), and there was no demonstrated aftermarkets (sales to TV, and home video hadn’t quite blossomed yet) for programming made for HBO. You took your script to HBO because you had nowhere else to go.
Which put the company in a position similar to that of an expansion team: getting the crappy players nobody else wanted. For the same reason, the channel wasn’t exactly a magnet for major talent. One of the trademarks of those early HBO original movies are casts toplined by stars on the downward slope of their careers: Kirk Douglas, George Segal, James Coburn, Robert Wagner, Richard Widmark, and the aforementioned James Stewart and Bette Davis.
I remember Bob Cooper, who produced Terry Fox as well as some of HBO’s better features and would go on to become head of the company’s original feature division, being asked when he thought things turned around for the company’s made-for efforts. His answer: the bio pic Mandela (1987). Like Terry Fox, Mandela was a respectful, dignified, handsomely produced effort (the film was shot on location in Zimbabwe) which picked up an ACE Award, an Emmy nom for Danny Glover in the starring role, and some warm reviews. More strategically important, Mandela showed HBO was more than a place where you brought projects nobody else wanted to make; it was a place where you brought projects nobody else could make.
When HBO had gone on the air in the early 1970s, Hollywood was still turning out a regular parade of edgy, provocative, adult dramas like Network (1976), A Clockwork Orange (1971), Deliverance (1972), Dog Day Afternoon (1975), Straw Dogs (1971), Patton (1970), Last Tango in Paris (1972), All the President’s Men (1976), Chinatown (1974), et al. But Jaws (1975) and Star Wars (1977) had sent the movie industry chasing phenomenal returns down another path: big-budget blockbusters aimed at young ticket-buyers, especially teens.
Older demographics were left underserved, and that’s where HBO original films found their sweet spot. Produced for two-three times what the broadcast networks spent on made-fors, the HBO original films which followed those less than auspicious early efforts were always well-produced, intelligently written, and aimed at a grown-up sensibility. Following in the success of Terry Fox and Mandela, Biopics became a go-to format, with flicks like The Josephine Baker Story (1991), Stalin (1992), Sakharov (1984), and the Bob Cooper-produced Murderers Among Us: The Simon Wiesenthal Story (1989) which copped a writing Emmy as well as nominations for Ben Kingsley in the leading role, and for Outstanding Drama Special.
As HBO grew more sure-footed, its profile as a programming platform more visible, and its openness to credible moviemakers with a passion project in hand clearly demonstrated, better and more high profile projects began to come through the door. While there was the occasional romance (Finnegan Begin Again, 1985) and drama (Empire Falls, 2005; Angels in America, 2003), HBO’s specialties became those pieces of history glossed over in the history books either out of negligence (The Tuskegee Airmen, 1995), or because they didn’t fit in with an upbeat, always-the-good-guy brand of American myth (Bury My Heart at Wounded Knee, 2007), or because they shone a painfully bright light on missteps and failures of national will at the highest levels (A Bright Shining Lie, 1998; And the Band Played On, 1993).
Boosting HBO’s original movie-making stature was a gradual retreat from the form by the broadcast networks. By the end of the 1980s, broadcast TV’s share of viewers had eroded to the point where more people were watching cable than the Big Three broadcasters. The days of thought-provoking network TV movies like A Certain Summer (1972), Roe vs. Wade (1989), Serving in Silence: The Margarethe Cammermeyer Story (1995), and The Day After (1983) were coming to an end. More and more, the Big Three made programming choices which smelled of a desperation to cut through the clutter of an expanding TV universe and grab at viewers any sensationalistic way possible. The nets would come to complain that HBO had come to monopolize the Outstanding Drama Special category of the Emmys with its more lavishly-produced TV movies, but the Big Three had done it to themselves, perhaps their worst moment being the 1992-1993 season where all three made a lousy movie about the infamous “Long Island Lolita” case (17-year-old Amy Fisher tried to murder the wife of her lover, 38-year-old Joey Buttafucco). That same year, HBO original movies took four of the five TV movie nomination slots at the Emmys (PBS took the fifth), and its biopic Stalin and cheeky look at the massive RJR/Nabisco merger Barbarians at the Gate tied for the win.
In the late 1980s, as HBO Pictures began to assume a respectable place in the world of made-fors, for all the deserved praise and well-earned awards, there was still something missing in the company’s glossy productions. These were projects movie studios didn’t make because they were running after the youth market, and the broadcast networks didn’t make because they judged them lacking in the kind of mass audience appeal they needed as their lock on that same mass audience was eroding. But outside of those value judgments, in terms of content, there was little or nothing in most of these movies the studios or networks couldn’t do. These pics seemed to generally take little advantage of the fact they were on HBO. They lacked – to use an overused media word – “edge,” and there was that taste of TV broccoli about them.
Bob Cooper had consistently won Emmys for HBO and that had brought him into the company to head up the original movie division. A diminutive man who could pass for Old Hollywood movie mogul Darryl Zanuck’s long lost brother right down to the ever-present oversized cigar, I once heard one of the HBO PR people say of him, “Bob really wants to make good movies. He really, really does. I just don’t think he always knows what a good movie is.”
Someone in HBO must have felt similarly and that resulted in the creation of HBO Showcase under the leadership of Colin Callender, a British import and stage/TV/film producer who had produced the acclaimed drama Mr. Halpern and Mr. Johnson for the company in 1983.. Based in New York instead of Los Angeles (the home of HBO Pictures), Showcase debuted in 1986 with true story Yuri Nosenko, KGB, the story of one of the biggest defection coups – or biggest double agent con jobs – in CIA history. The Showcase mandate was to go tougher and grittier than HBO Pictures, and they did with pictures like the AIDS allegory Daybreak (1993), kids-and-guns drama Strapped (1993), behind-the-scenes revelations of covert operations chicanery in Tailspin: Behind the Korean Airliner Tragedy (1989), and The Doomsday Gun (1994).
At least some of the Showcase crew chafed at their second class status. HBO Pictures got the big budgets, the bigger stars, the bigger promo push, and the most public attention, while Showcase – in their view – was making the better, more distinctively HBO pictures on budget about half the size of the typical HBO Picture .
Eventually, the two divisions were rolled into one under the banner HBO Films with Callender at the helm. By that time, HBO original movies – both the top-end Pictures and the hardboiled Showcase features – had found their true voice.
The movie business wanted young ticket-buyers, the nets wanted the biggest viewer numbers possible. HBO had discovered that forging its own unique identity involved not just doing movies the studios and network TV wouldn’t do, but in doing movies they were afraid to do. Movies about government missteps, shady business dealings, dark chapters in history became HBO’s bread and butter. AIDS, abortion, corruption, race, homosexuality, wars both misguided and mishandled… There was hardly a hot button issue past or present the company wasn’t willing to take on in a movie which, thanks to HBO’s growing stature, could now attract heavy caliber directors and actors.
Ironically, with HBO’s feature-making creative juices at their zenith, the same changing TV environment which had undercut the value of made-fors for broadcast TV now began to undercut their value to HBO as well. By the 2000s, a number of basic cable channels had been turning out strong original programs. HBO was no longer competing only against the Big Three, but against dozens of other channels offering distinctive, sometimes powerfully performing original programming.
One-shots like movies didn’t instill and maintain a hold on an audience. They didn’t bring people back to a channel week after week. Each HBO movie had to establish its identity and fight for an audience without anything to build on. Highly-acclaimed, Emmy-winning, smart, beautifully executed movies like The Path to War (2002, Lyndon Johnson’s step-by-step march into the mire of Vietnam), Conspiracy (2001, a chilling portrayal of the decision-making behind the Nazis “Final Solution”), and Recount (2008, about the vote-counting debacle in Florida which decided the 2000 U.S. presidential election) — drew consistently low viewers.
A series, on the other hand – one which works – once it clicks with its audience, reinforces that connection week to week. A movie is a blind date; a series, once it’s launched, becomes a relationship.
HBO would eventually cut back its movies, producing just four-six a year. They still have a strategic value to the service. A movie like Recount reinforces the channel’s image as a producer of quality, relevant, important programs (even if few subs watch them), but it was clear going into the new century that the service’s ability to remain a worthwhile investment to a new generation of audience was going to depend on bringing that audience back to the service week after week. The service’s future was in series.
Series, as I said, are hard. Good series are harder. And hard things come neither easily, nor quickly.
Expanding the Brand
If you aren’t making any mistakes,
it’s a sure sign you’re playing it too safe.
By the end of the 1980s, HBO’s nightmarish headlong collision with The Wall in 1984 was just that; a bad dream fading over time. Even during the tough days, the company had remained a money-maker, and although it was taking more effort and cash to bag subscribers, the service was growing again, HBO original programming was racking up awards and acclaim, and in subscriber homes, the channel was kicking broadcast network ass. During the 1990-91 television season, the service beat all three major networks during Saturday and Sunday prime time hours. The good times were back.
Which did not change the underlying, immutable fact, and the greatest lesson to come out of that horrifying 1984 flatline: that the domestic cable universe was finite. Sooner or later, HBO was bound to hit another wall. In fact, the better it was at growing in this tougher, new environment, the more likely it was to hit that wall sooner. HBO was a door insecurely hanging by the single hinge of domestic cable subscribership, and what 1984 had illustrated was the eventual inevitability of a saturation point beyond which the company could grow no more.
The company also had its status within the greater corporate hierarchy to worry about as well by this time. In 1989, HBO’s parent, Time Inc., merged with Warner Communications. Under the old print-dominant Time Inc. organization, HBO had been a blazing crown gem, a TV star among drab, wrinkled, slope-shouldered journalists. But within the new Time Warner, HBO hardly stood alone. Warner Bros. movie production, Warner Bros. TV production, Warner Music…by any measure – dollars earned, market share, even by the glitz factor – HBO was now arguably a junior member in the new organization’s expanded family of entertainment properties.
HBO’s pile driver of a CEO, Michael Fuchs, had understood the lesson of 1984, and clearly grasped the company’s strategic position within Time Warner. His propelling concept through the remainder of the 1980s and into the 1990s was to review HBO’s strengths and look for opportunities to parlay those assets into new avenues of business. In a 1992 story for a Time Warner newsletter celebrating the channel’s 20th Anniversary, Fuchs declared a vision of the reconfigured HBO of the future: “Four or five years out, 30% of our revenues will come from non-pay cable operations.”
That strategy was what business guys like to refer to as “expanding the brand.”
The best description of Hollywood’s reaction to the VCR explosion in the early 1980s was something along the lines of, Death knell! The apocalypse! A dagger held to Hollywood’s throat! The end of the movie business as we know it!
Movie studios took legal action to keep VCRs off the consumer market citing violations of copyright. Jack Valente, then head of the Motion Picture Association of America – a trade organization representing the major studios — likened the VCR’s predations on poor, defenseless Hollywood to those of the Boston Strangler.
But when all the breast-beating and Boston Strangler overkill died down, there came the slow recognition that maybe what this new technology was offering was another wonderfully lucrative ancillary market. By the end of the decade, all those movie studios that had been crying “Rape!” over the VCR had their own home video arm.
HBO, in contrast, had been a lot faster on the uptake of the if-you-can’t-beat-‘em-join-‘em concept than big studio Hollywood, and had been quick to take up an invitation to partner with Thorn EMI Video.
Thorn EMI was an independent film producer as well as an indie video distributor, meaning it wasn’t affiliated with any major studio. As an indie, Thorn EMI fed its distribution pipeline by cobbling together a network of deals with less-than-major production companies who didn’t have their own home video arm, such as – in Thorn EMI’s case – Orion and New Line Cinema. Thorn EMI had been a participant in one of HBO’s Silver Screen limited partnerships which had been used to finance a slate of theatrical features. Out of that connection, the video company, thinking indie survival might be more workable with a partner, approached HBO about taking the relationship a step further, and Thorn EMI/HBO Video was the result in 1985.
The following year, Cannon Pictures bought out Thorn EMI’s interest in what then became HBO/Cannon Video. Cannon was an aggressive indie studio which had mastered the new ancillary terrain in a way that put the major studios to shame.
Cannon lived on an endless, incessant parade of low-budget schlock, typically actioners featuring the likes of Chuck Norris and Charles Bronson (during Cannon’s most prolific year – 1986 — the company pumped out no less than 43 of these junkfests). Cannon’s real artistry came into play not in moviemaking (obviously), but in deal-making. Through the company’s pushy wheeling and dealing, it was able to milk advances from home video, pay and basic cable and broadcast TV, and overseas markets – enough cash to put its shabby releases into profit even before they had been released!
Then Cannon got ambitious and tried producing more expensive upscale product: bigger budgets, bigger stars. Problem was Cannon didn’t make them any better than their low-budget crap. The company took a financial pounding and by 1987, HBO/Cannon was simply HBO Video (later to be renamed HBO Home Entertainment). “At one point,” long-serving HBO Home Entertainment president Henry McGee told me in a 2010 interview, “it seemed like we were trashing our stationary once a year to change the letterhead.”
Under whatever label, through the late 1980s and into the early 1990s, HBO’s video venture was in the same boat as any other indie home video label; having to scuffle around for deals with less-than-major film companies for product. The company had had some big sellers: its relationship with Orion had brought it the Madonna-starrer Desperately Seeking Susan (1985), and its relationship with Hemdale produced two home video hits with Oliver Stone’s Oscar-winning Vietnam War flick Platoon (1986), and the inspiring true story of an underdog high school basketball team in Hoosiers (1986).
The problem with being dependent on small movie companies for product to fill HBO’s video distribution pipeline is the problem with small movie companies: they tend to come and go. Orion, for example, filed for bankruptcy in 1991 and finally collapsed a few years later. Hemdale shut its doors in 1995.
But by the end of the 1990s and the fading of VHS and the primacy of the video rental market, HBO Home Entertainment was shifting focus. By then, the company had finally built up a strong catalogue of HBO original programs (which we’ll talk about in a later chapter), and in the early 2000s, full season DVD sets of series like The Sopranos and Sex and the City, as well as “special event” programming like the WW II miniseries Band of Brothers were bestsellers on the home entertainment market. By the mid-2000s, HBO Home Entertainment was expanding into overseas markets, and was ranked as one of the strongest non-studio-affiliated home video brands in the business. HBO Home Entertainment was finally affiliated with a major studio of sorts which pumped out a steady stream of product attractive to the purchase-driven DVD market. That “studio” was HBO.
In 1989, HBO introduced HBO Selecciones en Espanol (renamed HBO Espanol in 1993, and re-renamed HBO Latino in 2000) on 20 cable systems in domestic markets with significant Spanish-speaking populations. The aim was not specifically to expand the brand in Spanish-speaking households (although that was a hoped-for side benefit), but was actually more of a retention tool. HBO research had shown that a good number of Latino households were, in fact, dual language homes, with older immigrant family members primarily speaking Spanish, while younger folk were raised speaking both English and Spanish. Selecciones gave those older Spanish-speakers a stake in HBO; at the time, the only one of the major pay-TV services offering Spanish language programming
Although Selecciones was a separate channel, it was offered in tandem with HBO. Its programming was the same as HBO but, taking advantage of the Secondary Audio Program (SAP – an auxiliary audio channel), with the English-speaking soundtrack replaced by a Spanish one (many popular movies are routinely dubbed into Spanish for overseas release). Selecciones proved so popular from the outset that within just a few weeks of its debut, 35 more cable systems added it to their service and its reach would continue to expand thereafter.
Eventually the channel expanded its offerings, offering Spanish-language commentary during HBO’s live boxing coverage, replacing some programs in the HBO channel’s line-up with features more popular with Latino audiences, and eventually introducing its own full slate of brand-specific original programming, such as the Mexico-set prison drama Capadocia, in its third season as of this writing, and soccer comedy HDP.
Back during the first months of the channel, there had been a bit of pushback in Selecciones markets from certain elements of the Anglo community. In those years when cable channel space was limited, some whites resented giving over a channel slot to a mirror image HBO tailored for a minority demographic. “What’s next? Ya gonna give the Chinese their own channel too?” and other similarly snide comments were routine complaints from Selecciones markets. “What’s ‘SAP’ stand for?” they cracked, “Spanish Audio Programming?”
As the evolving cable technology allowed the channel spectrum to expand enormously (we’ll get into this a bit later) and Selecciones established itself as something that wasn’t going away, the complaints dwindled away, but it does highlight the problems HBO – or any programmer – has dealing with a fragmented national market, some of those fragments not always ruled by the, ahem, better angels of their nature.
HBO Latino may have only incrementally boosted subscribership for the company, if that, but even if it only made the service more popular and valued in Latino homes – which it evidently has – then it can only be labeled a success.
Even in its best performing days, HBO’s penetration rate never broke 50%, meaning for every cable sub that added HBO to their service, another one said no. Much of HBO’s growth in its go-go early years had been driven by the expanding cable universe, but now that that universe had hit its own wall, HBO began to look at ways to grow within that universe. Casting a hungry eye at those millions of homes which had taken a pass on HBO, company research characterized two families of HBO resistors:
- There were those for whom it was simply a matter of money. Adding HBO was just too damned pricey for them.
- And then there were content objectors.
Content objectors also broke down into two groups:
- Older TV viewers with conservative tastes who had no stomach for the sex, violence, and nasty language they felt characterized so many of the movies offered on pay TV.
- Young couples starting families. The new moms and dads didn’t have a problem with boobs and guns, but they didn’t like the idea of their kids been exposed to that kind of stuff.
HBO thought it had the answer in a new service called Festival which launched in 1987.
Festival would take on the cost issue by being designed as a mini-pay service, meaning it would cost substantially less than HBO (retail rates are set by the cable operators, but their highest mark-ups are on premium services like HBO and Showtime), maybe by as much as half.
As for the content issue, the programming model called for kid-friendly programming at the times of day when kids were most likely to have access to the family TV: early morning, then late afternoon into the evening. During the middle of the day there’d be movies for at-home parents. Evening into night, programming would graduate from stuff for young kids, to teens, to movies for mom and dad. The movies would all be G- and PG-rated, with a few select PG-13 features thrown in during the late night hours. Also during late night, Festival might schedule some “airline versions” of R-rated flicks (these were R-rated movies with the R-rated parts trimmed out for use on passenger jets, bringing the movie down to something like a strong PG-13).
Even before Festival hit the air, HBO found itself in a head-to-head pissing match with The Disney Channel. Then four-year-old Disney was a subscription service at the time, and viewed Festival as a direct competitor. Disney sent out the message to cable ops that they didn’t need two family channels when Disney was the family brand that practically sold itself. “Disney” you never had to explain to the consumer; but think how much work it was going to take when the consumer asked, “What the hell is Festival?”
Festival came back saying they weren’t trying to take on Disney (even though they were obviously after a hunk of the same market), but that they were a whole other kind of animal.
The yes-you-are/no-we’re-not name-calling between Disney and Festival was the least of the new service’s problems. Its biggest problem was, on paper, Festival sounded like it should make everybody happy; in practice, it didn’t make anybody happy.
Those older, conservative viewers, many of whom were retirees with a lot of TV-watching time on their hands especially during the day, didn’t appreciate their paying for a 24-hour service that spent a good portion of daylight hours running “kiddy crap.” And while young parents appreciated the kiddy crap, they didn’t like that their the non-kiddy crap hours were filled with milquetoast mush.
Cable operators, by and large a conservative lot which likes to sit back and see what’ll work before committing themselves, did what cable ops usually do which is sit back and wait and watch…but while they were waiting and watching to see if Festival would fly, they weren’t picking up the service.
By 1988, suffering from limited distribution and subscriber dissatisfaction, Festival was buried next to Take 2, HBO’s previous failed effort at another service.
Somewhere out beyond the realm of pay-TV subs was a larger, still underexploited market consisting of millions and millions of basic cable viewers. Channel capacity on cable systems of the era might have been limited, but the growth potential of basic channels was not. The potential always existed to increase viewership, and with it, the ad rates a channel could charge.
HBO and Time Inc. had long had an eye on that fat pot of untapped basic cable revenue. It had led Time to buy into the then 11-year-old USA Network in 1982, filling out a triumvirate of big player owners, the other two being MCA and Paramount (HBO represented Time at USA). At the time, USA was a profitable but undistinguished hodgepodge of movies, sports, old network TV series. But with three hands on the helm, it was difficult to agree on which way to steer the channel.
Well, “difficult” might be an understatement. One of my bosses told me, “They (the three partners) hate each other so much they can’t even agree on what to have for lunch!” With an attitude of if-we-can’t-run-it-let’s-get-out, Time Inc. would eventually sell its stake in 1987 (HBO would similarly invest — and divest — from Black Entertainment Television, and Movietime! which eventually morphed into E! Entertainment Television).
In 1989, still with an eye on those fifty-odd million non-HBO homes, the company rolled out its own basic cable channel, The Comedy Channel.
HBO had looked at the basic cable spectrum to see what wasn’t being done. There were movies everywhere, channels dedicated to sports and music…but comedy?
It was a vein which seemed to make infinite sense for HBO to mine. Comedy was a cornerstone of the service, and HBO held bragging rights on elevating the careers of high-powered laugh-getters like Robin Williams and Steve Martin. In fact, one of the company’s promotional brags was, “We know comedy.”
For a programming model, HBO looked to MTV. In those days, MTV was still primarily a showcase for music videos. MTV paid nothing for the videos; record companies supplied them gratis to promote their stables of talent and their talent’s new releases.
The HBO plan was to play snippets of comedy movies, TV shows, and stand-up concerts – comedy videos – throughout the day also as free promotional material.
Beyond the programming model, the people tasked with running TCC also wanted to give the operation an entirely different mindset from its HBO parent. They remembered the open, all-for-one, creative chaos of HBO’s early years back in the Time Inc. building, and were acutely aware of how much of that had been lost in the company’s move to its 42nd Street home. When TCC set up its own physical operations on 23rd Street (though they were installed in HBO’s studio facility, in essence the channel was still as geographically removed from HBO corporate as HBO was removed from Time Inc.), the very design of the offices reflected the hoped-for mindset.
Because of the location of the building, there were no windows to the outside, but each office had windows facing inward to keep managers connected to their staff. To the same end, the company’s conference room had transparent walls.
A noble conception, and – like Festival – a workable concept on paper. And also, like Festival, it didn’t work.
For a channel that bragged “We know comedy,” the comedy video concept was one built on a monumental lack of understanding as to how film and TV comedy worked. Removed from the context of a movie or TV episode, the videos were often little more than mildly amusing.
Example: a clip from the 1968 film adaptation of Neil Simon’s The Odd Couple. Inveterate slob Oscar (Walter Matthau) is on a New York street with his despairing friend Felix (Jack Lemmon) trying to buck him up after his wife has thrown him out. Oscar gesticulates a little too wildly with his ice cream cone and his scoop of ice cream flies off and splats on Felix’s lapel. Without knowing what a pathological neat freak – and luckless wonder – Felix is, the moment changes from a big it-figures ha-ha moment to a mild chuckle.
Or an excerpt from The Jack Benny Show. A stick-up man confronts Benny one night and demands, “Your money or your life!” Benny hesitates, and when the impatient stick-up man noodges, Benny responds: “I’m thinking it over!” On its own, another tee-hee moment, but watch the excerpt from Benny’s series and the audience laughter his hysterical. Benny had spent his career cultivating a radio/TV/film persona as the ultimate cheapskate. The joke wasn’t the punchline; the joke was in the Benny’s audience already anticipating Benny’s response.
Putting it bluntly, The Comedy Channel wasn’t very funny. It turned out HBO might have known comedians, but it didn’t know comedy.
Worse, just five months after the channel hit the air, Viacom launched its competing Ha! The TV Comedy Network. Ha!’s concept was even more misguided than HBO’s, and involved nothing more than rerunning old comedy TV series from the Viacom library. Worse, Viacom wouldn’t air strong-drawing shows still generating good money in the syndication market, but, instead, fed Ha! with titles which had long exhausted their ancillary value. That’s why Ha! featured the kajillionth rerunning of such stale titles as McHale’s Navy.
Remember those conservative cable ops? Well, they were at it again, sitting back waiting to see which unfunny channel would knock the other on its ass. To their credit, both HBO and Viacom realized that kicking each other in the crotch for the amusement of cable ops wasn’t doing either company much good. Eventually, they merged the two channels in 1991, relaunching as The Comedy Network (eventually renamed Comedy Central).
Both programming concepts were dumped and the new channel began offering an expanding slate of edgy original programs including Mystery Science Theater 3000, the no-holds-barred animated series South Park, the sharp skit comedy of Chappelle’s Show, documentary parody Reno 911, and what might be the channel’s most acclaimed offering, The Daily Show with Jon Stewart and his cadre of bogus reporters throwing verbal hand grenades at newsmakers.
But, again, HBO’s philosophy was either own it or sell it, and, in 2003, Time Warner sold its stake to Viacom for $1.23 billion.
“Well, matter of fact I did,” says Farmer Gray. “But I figured since I’m so far out of town, it’s just not going to happen for me. Never ever. “
“Don’t you worry about it, Farmer Gray,” says Sam. “You can get all that stuff the same way the cable companies get it.”
“How’s that?” asks Farmer Gray.
“They use a satellite dish. You can use a satellite dish, too.”
“How much would this dish gizmo be?”
“I can get you one for about forty thousand buckeroos.”
“Well, Sam, I just happen to have forty thousand buckeroos sitting in my hip pocket. Let’s do it.”
So, Farmer Gray goes home, gives Mrs. Gray the good news, and she plants him in one of his beloved wheat fields for blowing ten thousand buckeroos on an overblown birdbath instead of getting the roof fixed, buying seed for the coming year, socking some money away for their kids’ college education, and getting a new tractor. Thanks to Mrs. Gray, Farmer Gray doesn’t live to see that his little indulgence is the spearhead of a slowly building wave.
The wave the late, lamented Farmer Gray caught had only begun building out there in the rural deeps just a few years earlier. The year after Home Box Office had gone on the satellite, an ex-NASA scientist by the name of H. Taylor Howard had considered what HBO had wrought, looked up to that part of the sky where an invisible speck sat relaying uncut movies and boxing matches to people all across America, and thought, “Well, I can do that, too!” Mr. Howard put all that NASA-honed know-how to work and built himself the first privately-owned Television Receive Only (TVRO) earth station (“earth station” being a Star Warsy way of saying satellite dish).
But, bless him, Mr. Howard wasn’t out to pull a fast one. He knew he was getting something you were supposed to pay for, and duly and conscientiously sent a $100 check to HBO.
HBO sent it back.
HBO wasn’t a retailer, they explained to the well-intentioned Mr. Howard, and they only dealt with cable system operators.
What the hell, there was nothing in Mr. Howard’s do-it-yourself, one-man cable system to cause HBO to crack a sweat. There were a little over 71 million households in the country at the time, so what was the worry if one industrious tech geek put up a self-made dish in his backyard?
Thing was, by 1978, Mr. Howard wasn’t alone.
As expensive as a home TVRO was, people who had their own dish considered it a worthy investment in home entertainment, particularly those out in the boonies who were — as Farmer Gray so definitively put it — never ever going to be serviced by cable. For forty grand, they got whatever was on the satellite without dealing with cranky cable companies and their pesky monthly bills (or their pesky cable companies and cranky monthly bills). HBO as well as Showtime and all the basic cable channels, PPV events; they all came — literally — falling out of the skies into their backyards and into their oversized birdbaths and from there to their TV sets. What a lot of dish owners and dish retailers and dish manufacturers were unaware of, or didn’t particularly care about, was that not a penny of those forty thousand dollar pay-outs went to any of the programmers.
Broadcast stations on the satellite didn’t care. If you were NBC, it didn’t bother you that some guy out in the middle of the Wyoming badlands was pulling in your programming. It was no money out of their pockets.
(A little aside. Broadcasters might not have cared, but the situation didn’t necessarily make national advertisers or local affiliates very happy because it having your own dish also meant having commercial-free TV. Satellite dish owners were pulling in the raw network signal, what’s called the backhaul feed. It doesn’t have commercials, national or otherwise, on it. For that reason, while cable subs and viewers still getting their TV over the air suffered through watching Mr. Whipple squeeze the Charmin or loud, obnoxious local car lot commercials, dish owners were treated to seeing some of their favorite news anchors picking their teeth while they waited for the signal that they were back on the air.)
In those early home dish days, cable programmers weren’t too worried about it either. There were so few dishes out there, what difference could it make? Besides, it wasn’t like you could keep TVRO owners from getting satellite-carried programming. The Cable Communications Act of 1984 even said that any signal not protected by encryption was fair game for people with their own dish.
Eventually, the price of a home unit came down considerably with their growing popularity. After forty thousand dollars, ten thousand seemed like a bargain, and by 1985 the typical cost was down to $3000 (and the price would keep going south; at one point, bottom-end C-band receivers were going for about $1000). The dishes were getting easier to install, too, as their size shrank from nine meters (almost 30 feet) to ten feet to six feet. Between the dropping price and shrinking size, by the mid-1980s, home dishes were selling at the rate of 75,000 per month. One estimate puts home dish ownership at three million by 1986, and they weren’t all TV-deprived rural residents. The idea of never paying another monthly fee (and not having to deal with snippy customer service reps, repairmen who kept you waiting all day and then didn’t show up, and service interruptions) had appeal even inside cable franchise areas. Now that was something to put cable operators in a bit of a sweat.
More aggravating to HBO and other pay-TV services than private individuals with their own TVRO dish were the bars, restaurants, and hotels and motels putting up their own dishes and pulling down service which they used to attract customers to their businesses. For places like that, even thirty-forty grand wasn’t a bad investment at all. “Come on in, have a few beers and watch some HBO!” And they did it without forking over a dime to HBO, or Showtime, or any of the other cable channels these establishments were hawking.
This also made cable ops mad. They looked like highway robbers asking people to pay their monthly bills when somebody just outside of town was getting everything available on cable for free through a home dish. Ops were also worried about how many people within their markets were buying dishes. One study made around 1985 told ops that somewhere around a third of all dishes being sold were going up inside cable franchise areas. Oh-oh.
People with hotels and motels who were legitimately subscribing to pay-TV services were also mad because they had competitors who were offering the same service without the same costs.
Movie distributors and fight promoters were mad, too, because they were selling their stuff to pay-TV services based on the services’ sub counts, only there were all these uncounted subs out there watching that they weren’t getting paid for thanks to home dishes.
That was an awful lot of mad people.
The situation didn’t make HBO mad. It made HBO hungry. Beyond having to deal with their business relations — ops, distributors, promoters, legit subs — all mad and feeling gypped, the company realized that, as the home dish market grew, there was money to be made out in those distant hills filling with TVROs.
Problem: the only way you could get dish owners to pay was to keep them from getting what they were now getting for free, and you had to do that in a way that didn’t interfere with the people who were supposed to get service, and you had to do it in a way that didn’t degrade the signal.
Which brings us to scrambling, or encoding, or encryption; take your pick, it all means the same thing.
HBO had been talking about scrambling satellite signals and selling them to home dish owners as early as 1983. It took a while to develop a workable encryption system, with HBO finally settling on General Instruments’ VideoCipher II in a unit designed by a company called M/A-Com. What VideoCipher II did was break down the video and audio signals into digital components at the uplink. A descrambler at the receiver put the Humpty-Dumptied picture and sound back together again. Each decoder had an electronic identity. A central computer center in Chicago was set up to keep track of the individual accounts and given the capability of targeting any one of the tens of thousands of decoders — or any one service on those decoders — for activation or de-activation.
In January 1986, HBO scrambled its signals full-time, the first TV programmer to do so, and offered service to the backyard dish market. In an HBO 20th anniversary booklet, HBO senior vice president of technology operations Bob Zitter described the massive paradigm shift caused by that flick of the scramble switch succinctly: “We invented satellite scrambling, and by inventing satellite scrambling we invented the C-band DBS (Direct Broadcast-Satellite) business…”
Dish owners were less enthused by the advent of encryption. They weren’t just upset. They weren’t even just mad. They were outraged, teed off, volcanic! This wasn’t just unfair (in their view); it was a crime! More than that, it was some kind of sin! Here they were with all this money sunk into their dishes, now they were being told that they’d need a descrambler (which was another couple of hundred bucks) to get programming they’d have to pay monthly fees for (maybe another couple of hundred bucks over the course of a year). Keep in mind, some of these people had been getting free cable programming for years. Then to suddenly yank it away from them? Yeah, that wasn’t going to go down very well.
An HBO employee tells how hot the heat was the company took from dish owners at the time:
We were scrambled maybe three or four weeks when I picked up a call that was my first bomb scare. I called Security and they told me not to worry about it; the company was getting a couple every week since we’d scrambled.
We got called everything in the book. Crooks, thieves, pawns of Satan. I’m not kidding! Scrambling was the work of the devil!
You’d explain to them that the money they’d paid for their dish equipment, no matter how much it was, didn’t do anything to pay for programming. They wouldn’t hear it.
They’d scream about how they were taxpayers and taxpayers’ money had put the satellites in the sky. You’d explain that a private company owned the satellite we were using, and they were charging us an arm and a leg for transponder space; that taxpayers had little to do with it. They wouldn’t hear it.
You’d tell them about how not being scrambled was unfair to cable subscribers; that cable subs were essentially subsidizing programming for dish owners who weren’t paying for it. They wouldn’t hear it. All they knew was they’d been getting something for nothing and now they weren’t.
It was so scary there for a while that some of the company reps, when they’d go to satellite trade shows, they’d register at their hotel under assumed names.
Despite the outrage and the urge to march on HBO headquarters with pitchforks and torches, the other major players in cable programming quickly followed suit. In the year after HBO scrambled, Showtime, TMC, CNN and CNN Headline, ESPN, USA, and several superstations, including WTBS, encrypted.
The fact that, channel by channel, the spectrum of unencrypted programming available to dish owners was evaporating did not encourage scads of dish owners to pick up the phone and order themselves up some pay-TV. By the middle of 1987, only about 180,000 dish owners were paying for some sort of scrambled programming.
Instead, what scrambling did do was encourage a lot of people to find some way to get around the encryption system. The scrambling code itself was unbreakable by Joe Average (The GI encryption methodology was similar to military scrambling systems; maybe the KGB could break it, but Mr. Radio Shack might have a problem). Instead, what some pay-TV pirates did was illegally import foreign-made “pirate chips”; descrambling computer chips sold on a black market basis that could be fitted into descrambler units to decode encrypted signals. Other rather shady types figured out a way to mess with the chips that were already in the descrambler to decode coded signals.
One popular scam was for some enterprising soul i.e. Mr. Scam Artist to go out and buy himself a bunch of descramblers, then call in to legitimately order service under a slate of bogus names. Then, he’d turn around and sell those authorized descramblers to Mr. Unsuspecting Dish Owner saying, “Look, this here box is special. You just hook it up and you get all the programming you want. You don’t have to pay anybody. Just give me a couple hundred bucks for the box and forget about monthly bills and all that crap.” Mr. Unsuspecting Dish Owner would buy the box, take it home, hook it up to his dish, and for a month be happy as a clam. Then, at the end of the month, the bills would go to the make-believe addresses Mr. Scam Artist had given the order center. When those bills didn’t get paid, all the Mr. Unsuspecting Dish Owners who’d bought one of these boxes would have their service cut off. Meanwhile, Mr. Scam Artist was down in Barbados ordering pina coladas and tipping the waiter handsomely with Mr. Unsuspecting Dish Owner’s money.
It was years before the home dish business turned into anything more than a hope. First, there was the matter of making scrambled signals more secure. A few busts by U.S. Customs let people know that smuggling in pirate chips was not that great a business to be in. Attempts were also made to make the descrambler boxes themselves more secure to prevent tinkering.
One such attempt involved encasing the decoding chip inside a block of some sort of unbreakable plastic stuff. It worked too well. Not only could aspiring pay-TV pirates not get into the block with the chip, but the heat that came off the chip during operation couldn’t get out. After a while, the unit burned out.
What worked better was improving the encryption system itself. HBO and other scrambled services upgraded to a GI system called VideoCipher II+. A safeguard to go with the new technology was that programmers began routinely changing their scrambling codes periodically leaving pirate chips and decoders out in the cold. No one in the business assumed piracy would ever be completely beaten. The hope, as procedures and hardware improved, was to make pirating so annoying, expensive, and time-consuming that more and more people would think it wasn’t worth the time and trouble.
In those early years of encryption, the relationship between scrambled programmers and manufacturers, retailers and owners of home dishes reminded you of the range wars in the Old West. We’re talking blood feuds here. In their view, these people who built and sold dishes had good reason to be angry. In one fell swoop they’d seen their business go down the tubes. Granted, in those early years, a lot of channels were still unscrambled which left people who owned dishes with a lot of stuff to watch. But few people were willing to fork out thousands of dollars for TVRO hardware when they were hearing that, as encryption expanded, the only cable programming that eventually might be left to them was The Weather Channel…maybe.
It also didn’t help that in those early years the only people who were actually selling programming to dish owners were the programmers themselves. The prices they were offering to dish owners weren’t that different from what cable systems were charging (and without the 60/40 split that was the average in cable retail, almost every dime programmers got from dish owners was pure profit). What a lot of dish people saw was Big Bad Business take something free away, then turning around and to sell it back to them at a hefty price (well, hefty when compared to free).
For their part, programmers were reluctant to allow third party retailers to sell their service. They didn’t see any practical reason to pay someone else to sell what they could sell themselves.
Programmers were also sensitive to cable op concerns. Ops looked at the dish business as direct competition. With cable providing most of programmers’ business, programmers were a bit hinky about looking like they were building a business designed to cut into cable’s turf.
All these relationships mellowed over time. Programmers and dish retailers realized that to grow in the new environment required a certain amount of interdependency. In simpler words: if you want to get along, you go along. All these parties were certainly going to accomplish a lot more working together than leaving burning paper sacks of manure on each others’ front porches.
Consequently, programmers began supplying retailers with incentives to sell programming packages along with dishes and offered them marketing support as well. As more and more channels scrambled, it became increasingly convenient to allow a number of third party retailers to participate in the selling, and the added competition helped drive down the price of program packages. Cable companies were even invited to sell programming to dish owners inside their franchises as well as in the areas immediately around their markets.
(Speaking of those programming packages, they represented a curious evolution in the CBD business which illustrates a paradox of consumer behavior: the difference between what consumers say they want, and what, in practice, it turns out they really want.
One of the knocks on cable service had long been that subscribers were forced to buy channels in bundles – tiers – which often included program services they didn’t want. “I only want channels where guys are hurting guys! I want ESPN! I want more wrestling! I want to see NASCAR pile-ups! Why the hell do I have to get Lifetime with that?” But private dish ownership and the spreading practice of encryption allowed consumers to subscribe to individual channels. You want HBO? Call and subscribe to HBO. You want ESPN? Call and subscribe to ESPN.
Which turned out to be an incredible pain in the patoot. And a bit expensive, too.
A circumstance which, in turn, created a market for retailers who would bundle channels together and sell those bundles at a more attractive, collective rate…A lot like what cable operators were already doing.)
One measure of how far relationships between encrypted programmers and dish retailers had turned around was the changed relationship between satellite retailers and scrambling leader HBO. In January 1986, HBO CEO Michael Fuchs was the retailers’ anti-Christ and got himself — in his words — “rotisseried” by then Tennessee Senator Al Gore for taking programming away from dish owners by scrambling. But by January of 1993, the Satellite Broadcasting and Communications Association (SBCA) — the dish hardware trade organization — was inviting Fuchs to give the keynote speech at their winter show. Said Fuchs in his we’re-all-in-it-together-styled remarks (while also trying to comfort cable ops that the dish boom didn’t mean they were being shown the door):
…new technologies hold the possibility of adding millions of new households of incremental revenue …What we’re looking at…is not a replacement, but a very lucrative addition to existing technologies. That’s an important point to remember because established delivery systems fret unnecessarily about their place in the technological spectrum. This new era is not going to carve itself out of the hide of another, but add to it. FM radio did not kill AM; television did not kill radio; cable did not kill broadcast TV; VCR’s did not kill pay TV. The pie is getting bigger…
HBO had every reason to be as appreciative of the SBCA as the SBCA was of HBO; at the end of 1992, HBO announced its home dish sales had increased by as much in the one year as they had in the six previous years. By the end of 1993, the company’s DBS sales were double 1992’s, and doubled again in ’94. In the company’s 1994 annual report, the company reported their best subscriber growth since “the pre-VCR era,” and observers attributed a lot of that new acquisition energy to the home dish market.
Even while HBO’s CBD business was still in the ascent, the company was already looking down the road to see what the Next Big Thing was. It couldn’t have been more than a year or two into the CBD business when I remember sitting in a briefing led by Larry Carlson, HBO’s president of HBO Satellite Services, with him telling us about Ku-Band.
C-Band – which was then the foundation of the DBS business — was a low-power satellite transmission technology. Ku-Band was high power and was being considered the next generation of satellite technology. NBC had already been using Ku-Band for its channel since early 1983. Ku-band not only provided better grade digital video and audio than C-Band, but also provided the capacity for High-Definition telecasting which was beyond C-Band’s capability.
Ku-Band receiving dishes, Carlson predicted “…would be about the size of a large pizza.” And beyond Ku-Band? Carlson put a non-working mock-up on the conference room table: something about as big as a laptop computer. It opened like a laptop and what would be the laptop’s screen was a satellite receiver. This is what’s down the road, Carlson said.
HBO had had to play catch-up with C-Band, stepping in and encrypting its signal after hundreds of thousands of people had already bought TVRO dishes and had been getting free service for years. This time, the company decided to get out ahead of the curve and invested in a Ku-Band satellite under construction. It was the first time the company had invested in transmission hardware.
It also turned out to be, for a company with usually pretty sharp foresight, a major miscalculation.
Oh, the company had read the tea leaves right; Ku-Band was the Next Big Thing, and all those little dishes you see hanging on people’s houses and outside apartment windows are the proof. No, the miscalculation was in the timing. Cable systems had invested millions in a C-Band infrastructure that was still working quite fine, thank you. Didn’t make any sense to spend good money on a new technology they didn’t need (yet).
Eventually, due to ops’ lack of interest, HBO would sell its interest in the unlaunched satellite. Afterward, it became something of an unwritten law in the company not to get involved in the hardware end of the business again. Hardware dated, hardware needed upgrading, hardware — … Well, hardware wasn’t what HBO was about.
With the coming of Ku-Band, more and more CBD subscribers began switching to the smaller Ku-Band dishes, and HBO subsequently handed off maintaining dwindling CBD accounts and retailing to the shrinking pool of CBD dish owners to outside companies. As profitable as retailing had been, the headaches that went with retailing – marketing, monitoring accounts, billing, collections, etc. – were something else the company felt it could live without. Retailing, as the company came to realize, wasn’t what HBO was about either.
Curious thing about CBD HBO subscribers. The CBD market had a better retention rate than the cable market. Granted, part of that was CBD subs were so hungry for entertainment they would’ve stayed with the service even if the channel had still been running polka festivals and swim meets. But there was something else; one of the reasons they stuck with their HBO/Cinemax channels was they got more of them.
After HBO went on the satellite in 1975, as its national audience built up, the company saw the same need the broadcast networks had seen decades before in providing its affiliates with separate signal feeds for the eastern and western parts of the country. The different feeds offered the exact same programming, only time-adjusted so that a program that aired in New York at 8:00 pm also aired in Los Angeles at 8:00 pm.
(Note: Typically, cable affiliates in the Central and Eastern Time Zones took HBO and Cinemax East, while Pacific and Rocky Mountain Time Zone affiliates took HBO and Cinemax West. However, that wasn’t a requirement. Systems could take whichever feed – or feeds — they wanted. A small number of systems in the Rocky Mountain Zone, for example, unhappy that using the western feeds meant they were getting programs an hour later than the coast zones, elected to take the eastern feeds which meant they were getting programs two hours earlier. That explained complaints to the New York office from subs about having to chase the kids out of the living room when late night fixture Real Sex appeared on the family TV at nine in the evening.)
But people with their own TVRO dishes got everything on the satellite. Even after HBO encrypted, a legit sub would get both east and west feeds which meant that at any given time of the day, they had programming choices on their service HBO/Cinemax cable subs didn’t have.
And that led to the development of multiplexing. It was a simple concept: HBO began playing around with its content library to program an expanding array of channels. HBO 2 (later renamed HBO Plus) was the first plex channel rolled out in 1991. It was simply another version of the “mother channel,” but with different programming. But subsequent HBO plex channels were more theme specific: comedy, family, HBO Latino, etc. Cinemax similarly rolled out a spread of channels (one focusing on action flicks, another on sci fi/horror, etc.).
Initially, cable ops weren’t that crazy about the idea. It meant dedicating valuable channel space to a single service, when they felt cable service might be more attractive to subs and potential subs if the system was offering a wider selection of different channels, instead of a bunch of different versions of a single service.
A combination of signal compression technologies, which allowed programmers to fit several channels into the same transmission pipeline which had once carried only a single channel, and allowed cable ops to do the same on their systems, combined with ops switching out their aging copper wire infrastructure for fiber optic cable which offered a massive increase in channel capacity, made the issue moot. It was a respectable cable system in the 1980s that offered dozens of channels. Signal compression and fiber optic cable now provide a capacity numbering in hundreds of TV and audio channels, and systems routinely offer plex versions of any number of program services.
Hitting the wall in 1984 proved a simple fact: the cable universe had limits. The boosts provided by aggressive marketing and expanding into the home TVRO market had to be considered temporary; it would only take HBO to a somewhat higher but inevitable saturation point.
But if the domestic universe was close to being mined out, there was a whole other universe that remained untapped; a universe outside American borders.
Expanding the business overseas seemed a natural step, but it was a substantially more complicated matter than simply hanging up a shingle on a storefront in, say, downtown Kabul saying, “Getcher HBO here!”
HBO’s original programs belonged to HBO and the company could do whatever it wanted with them. However, movies – which made up the bulk of the service’s programming – were licensed to HBO, and those licenses specified what the company could and couldn’t do with them: how many times they could be aired over how long a period, whether or not they could be aired in prime time, and most relevantly, that HBO only retained the right to air them in the U.S. and on American territory (HBO is available in the U.S. territories of Puerto Rico, Guam, and the U.S. Virgin Islands because, God knows, if you go to the Virgin Islands, it’s because you want to spend your time watching TV).
The media environment also differs substantially around the globe. To show you just how different TV can get overseas, listen to this tale from an HBO staffer who worked on a presentation for HBO’s top engineer, Bob Zitter, for a lecture by American TV engineers invited to Tsblisi in the Soviet Union in the late 1980s to explain to Soviet TV people how U.S. TV worked:
It took us forever to work out the language of the speech because phrases and ideas we take for granted in the West were meaningless there. We couldn’t say “commercial TV” because they didn’t have commercial TV and didn’t know what it was. We couldn’t say “network” because they didn’t have a word for that. The whole concept of ad time and ratings, competing for viewers, product promotion…the same thing. Meaningless. They had government-controlled TV and you either watched that or you watched nothing.
They had satellite delivery of TV signals but their system was completely different from ours. Instead of high-flying geostationary birds, they used a series of low-flying satellites, like a relay system. One would be coming into range of the transmitter just as the previous one was going out, and they would switch their signal to the approaching satellite. If you were watching TV, your picture would regularly go blank every time they switched birds. We thought it was wasteful, but for them, that was a cheaper, technologically simpler system then the one we use.
Even their programming was different. They had game shows but nobody ever really lost because that ran counter to the Communist ethic, and, of course, they didn’t advertise anything.
Nor was every part of the world equally attractive as a potential market. HBO looked for territory that was both politically and economically stable (didn’t pay to set up shop and lose everything when the next revolution came along), where the government was open to outsiders doing business on their home ground and would look after an entrepreneur’s rights, and, most importantly, where there was a worthwhile number of people with money to spend and the will to spend it.
You couldn’t think of going overseas without first thinking of doing business in Europe, an area roughly the size — in both area and population — of the United States, politically stable, more or less on an economic par with our country, and where American TV programming had long been popular.
But Europe is not a unified entity; it’s a patchwork of small countries, each with its own language, culture, economy, and political system. And besides, HBO was coming late to the party.
Launched in 1984, French-based subscription channel Canal+ (since it’s French, that’s pronounced Canal Ploos, and also since it’s French, usually said with something of a snotty French accent), had quickly expanded into and locked up the most lucrative Western European markets. By the early 1990s, Canal+ had sister channels in Belgium, Germany, Sweden, The Netherlands, and Spain as well as some markets in North Africa, and had also expanded into international film and TV production.
What that left for HBO were the countries of Eastern Europe, which had overthrown their Soviet-dominated Communist regimes 1989-1992. The years under oppressive Communist rule had left some of these countries economically ravaged…but not all.
For those European markets, satellite transmission was impractical because of the limited size of the individual markets, and the suffocating cost of satellite time. In the U.S. at that time, a broadcaster could get transponder space for as low as $800,000 per year. In most of the world, the usual price range for transponder time ran between $1 million-$2.5 million per year. In Europe, however, transponder costs spiked to between $5-8 million per year.
Since it doesn’t cost any more to build and launch a European satellite than it does to build and launch an American satellite, why the huge increase in costs? Off the record, some American sources will tell you that the idea was to keep Americans off the satellite. The European fear was that American programmers on the satellite would come to dominate the European satellite TV market much as they’d come to dominate the international motion picture and TV production and distribution businesses.
HBO’s first foray into Europe was Hungary, and it offers a good illustration of problem solving the difficulties peculiar to the European market. An HBO program service was offered over KábelKom, a Hungarian cable service which was a joint venture between subsidiaries of Time Warner (HBO’s parent company) and United Communications International, set up in 1991 to offer cable service and pay-TV in Hungary. HBO Hungary was, in fact, KabelKom’s initial program offering. But, rather than lay out the astronomical money for satellite time to serve a numerically small market (at the time, Hungary’s total population was just about that of New Jersey with Manhattan thrown in), HBO Hungary’s signal was fed to KábelKom systems terrestrially, by microwave, just like in the old days of HBO here in the U.S. It wasn’t as efficient as satellite carriage, but for a market the size of Hungary, it was more cost-effective. By the end of 1994, Hungarian cable subs were paying about $5 a month for 20 channels, HBO Hungary was in 160,000 households, and the partners were calling the venture a comfortable success. Since Its Hungarian debut, HBO has since expanded into 15 European markets.
In Latin America, the conditions of the market were quite the reverse. With most of Central and South America sharing the same language and many cultural values, and with transponder costs infinitely more reasonable, satellite transmission to the entire continent made more sense. As in Eastern Europe, HBO was the first U.S. programmer to jump into the Latin American market with its Spanish-language HBO Ole in 1991. A joint venture of HBO and Venezuelan-based Omnivision Latinamerican Entertainment, Inc., HBO Ole was made available across Central and South America as well as the Carribean to both cable systems and private dish owners. The company hit its break-even by 1993, and had a half-million subs by 1994, the same year the company launched a second channel as well as a Portuguese version of the service for the Brazilian market. In its first three months, HBO Brazil picked up 150,000 subs and was predicting a half-million subs in two years.
In the Pacific, with a market comprised of small and large countries scattered across thousands of miles in Southeast Asia and the southern Pacific, pan-Asian satellite delivery seemed the most practical way of distributing programming across a geographically enormous market.
Based in Singapore, HBO Asia went on the air in 1993 initially serving the Philippines and Thailand. The multiplex, multilingual service (HBO Asia programming is available in Mandarin Chinese, Thai, and Bahasa, the primary language of Indonesia) is now available in 23 Asian nations stretching from Mongolia to Vietnam, from Nepal to Papua New Guinea.
What’s remarkable about HBO’s international expansion is its demonstration of the value of the HBO brand. Keep in mind, none of these markets were getting the HBO available in the U.S. For all intents and purposes, these were all home-grown services, kinda/sorta resembling the Mother Ship back in the States, but with their own independently programmed and scheduled channels. In other words, the only thing HBO had to sell was its name, and in most overseas markets where HBO debuted, it was clear the HBO name was a universal gold standard in TV programming.
By the end of the 20th Century and the company’s third decade in business, it was also clear that the value of HBO gold was on the rise.
“Every winning streak will have to end sometime.”
In recognition of the job HBO CEO Michael Fuchs had done growing HBO and diversifying its business, he was invited uptown in 1995 to take over Warner Music while still keeping HBO as part of his new, expanded dominion. Assuming Fuchs’ top exec slot at HBO was Jeff Bewkes.
Not long after Fuchs had been given command of HBO in 1984 after the ouster of Frank Biondi, it had been clear that Fuchs’ strengths were not universal. Programming and long-term strategic vision were his fortes. Some of the more mundane and, for Fuchs, onerous tasks, such as kissing up to officers of the major cable MSOs, was something for which the often high-handed Fuchs didn’t have much of an affinity. The solution had been to divvy the company up, putting those non-Fuchsian — but critically important — responsibilities under a newly-created office of President.
Joe Collins was Fuchs’ first president. Despite a build like an ex-footballer, Collins was a soft-spoken type, not particularly big on public appearances. HBO’s PR staff found itself in the comic position of having an abrasive CEO they were trying to keep off the media stage, and a President they had to shove onto it. Collins’ background was cable and he made a perfect bridge between HBO and its affiliates, doing well enough that within four years, Time Inc. had moved him up to take the top job at American Television and Communications (ATC), Time’s cable subsidiary, and, at the time, one of the largest MSOs in the U.S. (after Time’s merger with Warner Communications in 1989, the cable arms of both organizations were merged in 1992 to form Time Warner Cable).
Collins was followed by Thayer Bigelow, a Time Inc. finance veteran. A sharp, articulate business guy, Bigelow, too, was rewarded with a move back uptown three years later.
Bigelow was followed by Bewkes who, in both skills and temperament, Fuchs would find his perfect counterpart. Perhaps the smooth meshing had something to do with Bewkes being a veteran HBOer, having been with the company since the early 1980s, rising through the ranks to become the company’s Chief Financial Officer in 1986. The picture that emerged was of Fuchs, The Programming Guy, and Bewkes, The Business Guy, the two halves making an extremely powerful whole. Curiously, they were worlds apart in personality.
While HBO’s senior execs typically used the company’s private dining rooms, it wasn’t unusual to see Bewkes picking up a quick lunch in the cafeteria, or working up a sweat in the company gym, standing elbow to elbow with the rank and file, striking up a conversation about the crappy jobs he’d had in his younger years.
One story I particularly remember about him is the time he’d left his briefcase in a cab. By happenstance, the next person in the cab happened to be a friend of one of the executive assistants at HBO to whom she returned the briefcase.
Several days later, the assistant passed on the briefcase rescuer’s regards, and Bewkes remembered he’d never properly thanked her. He had flowers sent to the woman’s office along with a note not only of thanks, but apologies for not being more prompt in showing his appreciation.
When Fuchs moved up to Warner music, Bewkes was given sole command of the company. I don’t know what the feeling was at the senior management levels, but I do know some of us staffers were curious about what this would mean for the creative direction of HBO. Fuchs had been a programmer, had come up from the programming side of the company, had early on seen the strategic value of bolstering the company’s original programming muscle.
But Bewkes was The Business Guy. Would he “get” the programming vision Fuchs had laid out for the company?
One of the great ironies in the programming evolution of HBO was that while Fuchs had pointed the company in the right direction, it would be under The Business Guy that HBO, as a creative entity, would experience its first Golden Age.
Bewkes gave the direction Fuchs had set for HBO a slight course correction. Bewkes saw that the originals that would have the most value to the company would be scripted series. The popularity of movies and documentaries seemed to be topic-driven. The right subject would bring a big crowd in one month, but didn’t guarantee good numbers for the next outing. Movies and docs didn’t cultivate a consistent brand loyalty.
But a series… When a series clicks, that means a regular audience coming back week after week; it means that certain “anchored” time slots (a regular time slot, or, in the case of HBO’s rotating schedule, slots) could consistently pull predictable numbers. That means loyalty.
The difficulty for Bewkes’ slight turning of the HBO programming helm was that even by the time he took the CEO’s chair, HBO’s track record in series ranged between “disappointing” and “abysmal,” with stops on the way at “cheap,” “sleazy,” and “junk.”
HBO’s problem with original series was similar to the problems it had getting its movie division off the ground: the company was hardly a first port of call for heavy-hitters in TV program creation. The company had to make do with what it got, and what it got was rarely impressive.
The same year HBO’s children programming delivered a series coup with Fraggle Rock – 1983 — the adult side of the company turned out the less impressive Not Necessarily the News. Spun off from a 1982 special, NNTN was a left-handed remake of British TV comedy series Not the Nine O’Clock News. The centerpiece was a faux newscast (not too dissimilar to the “Weekend Update” segment of Saturday Night Live) with the rest of the half-hour filled out with parodies of commercials and skits. It was never quite as aggressively topical as SNL, never as astute as SCTV, and, despite a writing staff that included Conan O’Brian on his first TV writing stint, and future The Office producer Greg Daniels, more mildly amusing than funny. Dull-edged as it was, NNTN managed to develop a following that kept the series on the service until 1990.
An even less memorable early effort was the sitcom 1st & 10, a supposedly comic half-hour starring Delta Burke as a divorcee who gains ownership of the fictional California Bulls football team in a settlement with her ex-husband (Burke left the show in its third season for the CBS hit, Designing Women). In the second season, O.J. Simpson joined the cast bolstering the show’s jock bonafides. Many was the reviewer who commented that the most imaginative element of the series was the way the writers managed to get the team’s cheerleaders (or some other available female) naked. The combination of football and gratuitous nudity was enough to carry the show for seven forgettable seasons with few brag-worthy moments among them.
Instead of sports and boobs, The Hitchhiker held its audience with the equally potent mix of grotesque blood-spillage and boobs. A poor man’s Twilight Zone, each episode of the thriller anthology began with The Hitchhiker (Nicholas Campbell in early episodes, then Page Fletcher) thumbing his way along a highway delivering some portentous commentary as that episode’s guest star whizzed by (I don’t recall they ever picked up The Hitchhiker, but then who’s going to stop to pick up some scruffy guy talking to himself in a Canadian accent?). Most episodes involved a totally unnecessary injection of T & A and some karmic justice usually delivered in grotesque fashion. It was a workable enough formula to carry the series from 1983-1987 (the USA Network picked up the series in 1989 and produced new episodes through 1991), although, like 1st & 10, it’s not one of those shows that has people years later going, “Hey, remember the episode where…”.
HBO shows could use nasty words and show naked ladies and spray blood and exercise various combinations thereof, which the broadcast networks couldn’t, but the channel didn’t seem to be offering much else…although they did try.
From 1983 through 1986, the network produced 11 one-hour episodes of Philip Marlowe, Private Eye, starring Powers Boothe in adaptations of Raymond Chandler short stories featuring the eponymous detective. More of a limited series rather than a true series, they were classy-looking pieces (the show was shot in England where it was easier to find settings that looked more like 1930s Los Angeles – go figure) and well-reviewed, though never a breakout success.
And there was The Ray Bradbury Theatre, which was something of an attempt to find a more upscale sci fi/fantasy vehicle than The Hitchhiker. Hosted by the sci fi maestro himself, who also adapted his own stories for the series, Bradbury – lacking Hitchhiker’s per-episode quota of sex and mayhem – lasted only six 1984-85 episodes (this was another series USA picked up, turning out new episodes from 1988-1992).
Maximum Security, debuting in 1984, was a precursor to HBO’s later hit Oz, being another one-hour drama set in a prison. But Maximum… was another series that didn’t make much of an impression and lasted only six episodes.
At the same time HBO was finding its series-making feet with middling successes like NTNN and flops like Ray Bradbury, there were subs who didn’t like where this was going.
“I signed on for movies!” was a common complaint. Whenever the monthly slate of feature flicks was weak, it was – so some of HBO’s subs said – because we were blowing money on TV shows instead of movies (rather than the fact that so many movies sucked). A rather widely shared paranoia was that HBO seemed to be taking the first steps into turning itself into something that looked an awfully lot like the kind of TV these people were subscribing to HBO to get away from.
Which was not what the company was trying to do at all. What it was trying to do, with little success (at least on the original series front) was create a brand of TV distinctive to HBO. It’s just nobody knew quite what that was.
Then, in 1988, the company finally got a sense of what that kind of programming might be with Tanner ’88, a faux documentary following the efforts of one-time House of Representatives member Jack Tanner (Michael Murphy) to secure the Democratic nomination for president. The 11-part series, filmed against the background of the real-life ’88 campaign, had a creative pedigree then unmatched among HBO’s originals. The series had been created and written by Gary Trudeau, the man behind the Doonesbury comic strip, and was directed by filmmaker Robert Altman, whose list of credits at the time included M*A*S*H (1970) and Academy Award Best Picture nominee Nashville (1975; Altman had also been nominated for Best Director).
Statistically, Tanner was a flop. It’s acidic, insightful skewering of national politics was not exactly mass audience stuff and viewership never climbed out of six figures, but Bridget Potter, then HBO’s original programming chief, would look back and consider the series a turning point in the company’s creative development. Tanner was a smart show, a format-buster with its fake doc style, and, perhaps most importantly, according to Potter, “…attracted a new kind of critical attention to HBO.”
That’s another way of saying the company was, as a series programmer, finally being taken seriously by both those who wrote about the media…and those who wrote for it.
HBO’s rise from the you’re-spending-my-subscription-money-on-that-crap? original programming basement to cable TV’s creative gold standard can be charted over a period of about ten years with the successes of several key original offerings.
By the end of the 1980s, the movie box office was becoming dominated by young-skewing sci fi and fantasy adventures, over-the-top action blockbusters, and sequels to sci fi and fantasy and over-the-top blockbusters. Box office Top Tens for 1989-1990 included the likes of Batman (1989), Ghostbusters II (1989), Indiana Jones and the Last Crusade (1989), Home Alone (1990), Total Recall (1990), and Die Hard 2: Die Harder (1990). Over on the small screen, the penchant was for the sweet, the nice, the inoffensive. TV series at the top of the rating charts during the same period included The Cosby Show, Golden Girls, Wonder Years, Who’s the Boss?, and Murder, She Wrote.
There were writers and directors and producers in Hollywood itching to do something different, something against the grain, something with – to use a way overused word – edge to it. Tanner ’88 had sent out the message that there was a place for that kind of work. The Altman/Trudeau series had demonstrated to the heavy caliber creative talent in Hollywood that HBO was about more than T & A, that it could provide a venue for the truly, creatively ambitious.
In 1988, the service offered the sketch comedy The Kids in the Hall (1988-94), featuring a Monty Pythonesque troupe of talented loons (Dave Foley, Kevin McDonald, Bruce McCulloch, Mark McKinney, Scott Thompson) out of Canada. Kids offered a ruthless, off-the-wall, often daring brand of funny which showed how toothless Not Necessarily the News had been, and, in the process, how far the channel had come. Although Kids never quite developed the buzzy, culty Python-like cachet the company had been hoping for, it was the first HBO series to become both a popular and critical success, advancing the example of Tanner ’88 in showing what could be accomplished with the kind of artistic running room a service like HBO provided.
A different flavored win came the following year with Tales from the Crypt (1989-96). Inspired by grisly comics like The Crypt of Terror, Vault of Horror, and, obviously, Tales from the Crypt, the series had some of the heaviest hitters in Hollywood behind it. The show’s cadre of executive producers included Joel Silver, who, at the time, had become a box office powerhouse with the Lethal Weapon and Die Hard franchises and one-offs like 48 Hours (1982) and Predator (1987); Richard Donner, who’d not only directed Silver’s Lethal Weapon shoot-‘em-ups, but whose resume also included box office smashes like The Omen (1976) and Superman: The Movie (1978); and David Giler, executive producer of Aliens (1986).
Hosted by the cackling, animatronic “Crypt-Keeper,” Crypt was an upscale, wittier, smarter, better-executed version of The Hitchhiker. An anthology series, each episode was some kind of morality play always ending with karmic justice dispensed in Grand Guignol bucket-o’-blood fashion, the grotesqueries and gore tempered with campy excess, like the episode where Stephen Weber’s down on his luck reporter finds himself the main course at a dinner party for ghouls. My own personal favorite line: a sinister David Hemmings counseling love-struck Kevin McCarthy with the advice, “Ahh, women. Can’t live with ‘em, can’t tell the neighbors she went to visit her mother in Palm Springs.”
The hit-making pedigree of the men behind the series gave HBO something it hadn’t had before: a free-flowing conduit to Hollywood’s A list. Crypt became Hollywood cool and its episode casts featured an impressive array of serious marquee talent, from Old Hollywood aristocracy like Kirk Douglas to the likes of Whoopi Goldberg, Joe Pesci, and Brad Pitt, to name a very, very few. Just as impressive were the Big Name directors who helmed Crypt eps i.e. Robert Zemeckis, John Frankenheimer, Tobe Hooper, Crypt exec producers Donner and Walter Hill, among others. Silver & Co. also offered some of the industry’s big stars a chance to try their hand behind the camera, and those first-time directors included Michael J. Fox, Tom Hanks, and Arnold Schwarzenegger.
“Dream On (1990-96) was the first (HBO) series that seemed interesting (to me),” says AMC Entertainment CEO Josh Sapan. With the series, John Landis added himself to the list of Hollywood biggies picking up on the Tanner example.
Since his career breakout with Animal House (1978), Landis had become one of the industry’s comedy homerun hitters with a resume which included box office winners like An American Werewolf in London (1981), The Blues Brothers (1980), Trading Places (1988), and Coming to America (1988). Universal Studios, for whom Landis had directed Animal House and The Blues Brothers, had been looking for a way to squeeze a few last residual dollars out of their vast library of stale, non-syndication-worthy TV programming. They cut a deal with Landis giving him access to their vaults, then chose two musical theater writers with no history in TV – Marta Kauffman and David Crane (they would later create the smash hit sitcom Friends for NBC in 1994) – to work with Landis on developing a workable concept. The result was Dream On.
Brian Benben played Martin Tupper, a divorced dad working as an editor at a small New York publishing house floundering his way through his career, raising his adolescent son, and one flubbed relationship after another. During peak moments, Tupper, a baby boomer raised on TV, would mentally flash to a clip from an old TV show. The clips acted as a kind of visual punctuation/thought bubble/aside/pictorial one-liner.
Initially, the series had trouble finding its feet. Because it was HBO, there was still a perceived need to shoehorn some nudity in when possible. In a 2010 interview for the Archive at American television, Kaufman and Crane recalled Landis occasionally suggesting they needed to make the show “funnier and dirtier.” And, the humor seemed a bit uneven, the use of the clips a bit too gimmicky. But, in time, the show found its voice, and it turned out to be an impressively expansive one.
There’s the delightfully silly episode where Tupper moonlights as a screenwriter for porn flicks to make a few extra bucks, then – in a lampoon of every self-proclaimed integrity-ridden artist — goes into a tiff when his creative vision isn’t respected. At the other end of the scale, there’s a lovely poignancy in an episode where Tupper works with an author with AIDS (David Clennon in an Emmy-winning guest role).
Tales from the Crypt and Dream On gave HBO something which had seemed more a prayer than an ambition back in the days of 1st & 10 and The Hitchhiker: back-to-back hits (and highly lauded hits at that). One show could be a lucky fluke; two signaled a possible trend. Talking to The New York Times TV writer Bill Carter in 1991, HBO’s original programming chief Bridget Potter called this an “extraordinary moment.” Granted, HBO at that time operated within the mini-universe of 17.5 million subs, but within that universe, according to Potter, “For the first time, a pay channel has a hit series, maybe two.”
And then two became three with The Larry Sanders Show (1992-98). The series was dark, cynical, bitter, at times angry, often angsty…and was a comedy.
The man behind Larry Sanders was Garry Shandling, then primarily known as a stand-up comic who had cultivated, in clubs and in TV appearances, a humorously anxious, whiney, often clueless persona. In the 1980s, Shandling had found a home at Showtime, performing in several specials before launching one of the all-time great TV comedies, It’s Garry Shandling’s Show (1985-90). The series was both a parody of and tribute to sitcoms featuring Shandling playing a version of himself starring/living in a sitcom, frequently interacting with his live audience and often talking directly to the camera. It was a brilliant piece of creative destruction, exploiting/lampooning/deconstructing decades’ worth of sitcom conventions, yet doing so in a gentle and even loving way.
In 1986, Shandling had done The Garry Shandling Show’s 25th Anniversary Special, a mock tribute show built around the concept that Shandling had been hosting a late-night talk show for 25 years. Shandling expanded on the concept, moved to HBO, and Larry Sanders was born.
As light, gentle, and playful as It’s Garry Shandling’s Show had been, The Larry Sanders Show was, to the same degree, its tonal opposite: an acidic, razor-sharp satire of the vanities, pettiness, fragile egos, self-importance, and paranoias of the Hollywood glitterati. Shandling played Larry Sanders, the vain, insecure star of a long-running late-night talk show. In orbit around him was a brilliant ensemble playing equally horrible people including Rip Torn as his hard-drinking, manically-devoted producer, and Jeffrey Tambor as his spineless, sycophantic, opportunistic sidekick.
Dark as Sanders was, it was a striking break from everything else on TV and became – and remains – one of HBO’s most acclaimed original series, and a perennial example of what pay TV could (and can) do that broadcast TV can’t (or won’t).
The service took to scheduling the three series – Dream On, The Larry Sanders Show, and Tales from the Crypt back-to-back on Wednesday nights. Within the admittedly small HBO universe, the trio kicked broadcast TV’s ass and HBO owned Wednesdays. With its original movies at their drawing peak, their premieres often handed HBO a second night, and I remember hearing execs fantasizing how, if they could only come up with one or two winners, HBO had a shot at pealing yet another night away from the networks.
Oz (1997-2003), created by Tom Fontana, wouldn’t give HBO that new night, yet it still represents an important step forward for HBO’s original series as the channel’s first one-hour drama. At the time, Fontana was best known for the highly-acclaimed network series, Homicide: Life on the Street, a gritty, grimly realistic cop drama inspired by journalist David Simon’s book-length account of a year with a Baltimore homicide detail. Set in a special wing of a maximum security prison, Oz was even grittier and grimmer than Homicide, its drama routinely incorporating racism, graphic violence, and guy-on-guy rape as the toughest prisoners in the Oswald State Correctional Facility (i.e. “Oz”) jockeyed sometimes for positions of power, and, at other times, simply for survival.
As physical and emotionally brutal as Oz often was, the series – which only ran in 10:00 PM and later time slots – had an unexpected appeal to women viewers. As HBO’s top scheduler Dave Baldwin once explained to me, with not a little amazement, “Guys just want to see things blow up. Women get into character and story, and Oz is all about character and story.” Baldwin also told me that women, used to the continuing story lines of soap operas, also plugged into the season-long story arcs of Oz (although that kind of storytelling has become a regular feature of both cable and network drama programming, at the time Oz debuted, it was still a novelty, with most network dramas composed of stand-alone episodes).
With most of its plays outside of the peak prime time hours, Oz was more of a cult show than a heavy draw, but HBO was also seeing the value in having what some called “niche” shows as part of its original programming mix. Over the course of the ’90s, behind such biggies as Dream On, Crypt, and Larry Sanders, HBO had been regularly rolling out a stream of acclaimed shows aimed at those small audiences the major nets couldn’t be bothered with, but who were looking for an alternative to mainstream, middle-of-the-road TV programming. Such shows included HBO’s spins on talk shows with Dennis Miller Live (1994-2002) and The Chris Rock Show (1997-2002); oddball sketch comedy Mr. Show (1995-98); a series built around a Spinal Tap-like bogus rock duo with Tenacious D (1997-2000); and an attempt at creating a late-night, adult-oriented animated block with Spicy City (1997) from Fritz the Cat (1972) director Ralph Bakshi, and Todd McFarlane’s Spawn (1997-99), based on the cult comic book.
While not every show gained traction or even jelled creatively, they were coming more frequently, their creative aims were growing more daring, and the service, in general, seemed to exude a programming confidence promising still bigger and better originals ahead.
Bigger and better was right around the corner with a hat trick of big hits that still define the company’s programming identity.
It said something about HBO’s elevating stature as a programmer that the company strategy was no longer catch-as-catch-can. HBO now found itself in the enviable position of being able to afford to turn shows down based on its view the project was – in the phrase I was coming to hear more and more often – “an HBO show.” Like the old joke about art, nobody could define what that meant, but they knew it when they saw it.
Case in point:
In 1996, HBO rolled out Arli$$ (1996-2002). Like The Larry Sanders Show, Arli$$ came from the off-kilter imagination of a stand-up comic, in this case Robert Wuhl, who also starred. In synopsis – and no doubt why HBO was interested – Arli$$ sounded like a sports version of The Larry Sanders Show. Wuhl played Arliss Michaels, a top-flight sports agent with the integrity of a hired killer moving through the circles of big dollar sports the way talk show host Larry Sanders moved through the glittering echelons of show business. Sanders often showcased real life movie and TV stars as they cameoed their way through Larry’s talk show, while Arli$$ did the same for big names from the sports and sports broadcasting worlds i.e. the likes of Bob Costas, Barry Bonds, Kobe Bryant, etc.
The big difference between the shows was that, unlike Larry Sanders, the critical consensus was Arli$$ sucked. Big time. Entertainment Weekly (a sister company of HBO) regularly blasted the show as one of the worst on TV, and that was hardly a singular view.
For that reason, there were those in the programming division of the company who wanted to cancel the show because it wasn’t “an HBO show.” For the most part, the TV press thought the show was awful, quite a few inside the company thought the show was awful, and it wasn’t the kind of sharp, smart programming the company felt was brag-worthy and marketable in a it’s-not-TV-it’s-HBO kind of way.
On the other hand, as despised as the show was in critical and company programming circles, the show’s numbers were better than those of The Larry Sanders Show.
It makes sense. Sanders was a show that attracted viewers interested in smart, edgy TV programming. The humor was often subtle, just as often “inside” for those up on who was who and what was what in the entertainment business, and rarely about gags and punchlines. Arli$$ attracted people who liked sports. Simple. The humor was more obvious, broader, louder, and Arli$$ fans liked seeing famous sports figures whether they could handle comic dialogue or not.
When Wuhl got wind HBO was considering pulling the plug on the show, he asked for a show of fan support during a radio appearance and that’s what he got. Calls and letters cascaded into the company with the same kind of fire behind them that those callers and letter-writers gave to their favorite sports teams.
Thus a corporate quandary: cancel one of the more popular shows on the channel and tick off a horde of militantly devoted fans who often claimed Arli$$ was the only reason they subscribed to HBO; or keep the show and compromise the brand’s artistic integrity.
HBO held its collective nose and kept the show, the series ultimately filling out seven seasons. It may not have been the noblest choice for the company, but it was easily the pragmatic one. Still, the fact that that discussion was taking place at all, however, said something not only about the company’s sense of what it’s brand was coming to mean, but that that meaning was something worth cultivating and protecting.
In 1998, the service began taking on the programming configuration most people today recognize as quintessentially HBO and within the span of a few short years, had given itself something it hadn’t had since the days when running uncut movies was all the company needed to sell itself: a brand identity..
Tom Hanks was still hot off his 1995 big screen, Oscar-nominated hit Apollo 13 when he turned his enthusiasm for the country’s 1960s space program into the $68 million 12-part miniseries, From the Earth to the Moon, working with fellow executive producers Apollo 13 director Ron Howard, and Howard’s producing partner, Brian Grazer.
It was not HBO’s first miniseries. The channel had given the format a couple of whirls back in its early original programming days. The three-part The Far Pavilions (1984) had been a – for its time – lavish period piece ($12 million budget, shot on location in India with stars Ben Cross and Amy Irving), but it had come off as little more than a dramatically bland period soap. More popular though no more memorable was the four-part All the Rivers Run (1983), a cheaper, less-hyped pick-up from Australian TV.
It was 14 years before HBO placed a big bet on the format again, but not only was Earth/Moon radically different from Pavilions and Rivers, it cut against the grain of what the TV audience had come to expect from a miniseries since it had been introduced in the early 1970s with QB VII. There was no continuing plot threads, no recurring characters, and rather than the typical cast juiced with big star cameos, the Earth/Moon ensemble consisted of talented ranks of barely familiar faces. The biggest names attached to the program were behind the camera: Hanks, Howard and Gracer.
Based on Andrew Chaikin’s book, A Man on the Moon, the miniseries, like Chaikin’s account, traced the American space program from the earliest days of the U.S./U.S.S.R. space race through the Apollo 17 mission, the last moon landing. Rather than an all-star cast, Earth/Moon’s $68 million was spent on capturing the period, and in the still-impressive special effects used to capture the space missions. But the dramatic component was equally strong, and the miniseries was universally lauded and would go on to cop the Emmy for Outstanding Miniseries.
It would also serve as a template for a series of similar high profile, richly produced, history-inspired miniseries like Band of Brothers (2001), John Adams (2008), Generation Kill (2008) and The Pacific (2010); offering that became one of the maturing channel’s signatures.
That same year also saw the debut of one of HBO’s most successful series: Sex and the City (1998-2004) from producer Darren Star whose previous credits included Beverly Hills, 90210 and Melrose Place. Based on Candace Bushnell’s book which was, in turn, based on her column for The New York Observer, and SATC followed the lives and loves of four young women (Sarah Jessica Parker, Kim Cattrall, Kristin Davis, Cynthia Nixon) set against the high fashion and glitzy good times distinct to New York City.
Though the series would eventually run up a score of 50 Emmy nominations including a 2001 win for Outstanding Comedy Series, spin off two feature films and become a pop culture touchstone, it was not a universally beloved series, particularly in its early years. TV critics blasted characters who seemed to have no interests beyond good sex, a well-mixed Cosmo, and high-priced Manolo Blahniks. Some women writers were particular off-put by the show, considering its characters’ quests for romance and high fashion hardly the goals decades of feminist struggle had been for.
But over the course of its six seasons, the show, like its characters, matured, and it became both a mix of youthful fantasy fulfillment (great times in one of the most glamorous cities in the world), a paean to female friendship, and a tribute, in its post 9/11 seasons, to a stricken yet resilient and still entrancing Gotham.
Even before SATC could get past its growing pains, its accomplishments were soon overshadowed by The Sopranos; not only one of HBO’s all-time best series, but often listed among the greatest TV series ever to hit the airwaves.
The series was conceived by David Chase, a veteran producer and already an Emmy-winner for his work on The Rockford Files. Chase had shopped the project to the broadcast networks who were balky about a series where nearly all of the characters were unsympathetic hoods. It was clear only a pay-TV channel would provide Chase with the creative latitude to tell his story the way he felt the story needed to be told, and the project found a home at HBO.
The Sopranos would be HBO’s first monster hit, generating numbers within the small universe of HBO homes that were comparable to what many broadcast network shows were pulling nationally. By its second season, critics were describing it as a tragedy of Shakespearean quality, and the show had become a towering spire in the pop culture skyline.
Not bad for a show the company had modest hopes for.
“Anybody (in HBO) who tells you they knew The Sopranos was going to be a hit,” one company exec once told me, “is a liar! I know! I was in those meetings! They didn’t even like the title!” The expectation, that same exec said, was that because of the show’s Mob themes, it would probably “do ok,” but not much more. Jump in your time machine and go back and watch the promo campaign behind the series: The Sopranos wasn’t getting about as much push as the typical HBO original.
With its promotable elements – neurotic Mafioso sees a shrink to deal with the stresses of being a Mob boss – echoing those of the more broadly comic big screen Analyze This released earlier that year, there was some worry the show would be dismissed as a TV knock off.
Before the first season was over, the company realized it had an atomic-powered engine on its hand, and the promo push for the show grew more massive season by season. The acclaim was universal, and The Sopranos would be nominated for the Outstanding Drama Series Emmy each year it was eligible, winning in 2004 and 2007.
The show also illustrated the difficulty in allowing a creative artist the leeway to pursue his vision in a mass medium that, season by season, demonstrated a limited tolerance for artistic ambition. Part of what made HBO attractive to people like David Chase and Darren Star and Garry Shandling etc. was the HBO policy of keeping its nose out of the creative end of programming. If it believed in a show and the people behind it enough to commit to it, then it believed in it enough to allow the creative team to follow its creative nose. After its rather violent first season, The Sopranos focused more on the interior drama of its characters than on body counts, and that wasn’t always what fans wanted. One of the running complains in subsequent seasons that regularly came across my desk was, “Not enough people are getting whacked” (trust me; that’s exactly how they put it).
Fan frustration with Chase’s adamant refusal to throw viewers some cathartic bones and follow what he believed to be a truer dramatic line was never more pronounced that over the series’ provocative, controversial final episode. There were viewers who clearly stuck with the series expecting an apocalyptic finale. Instead, the closing scene of the last episode had Mob boss Tony Soprano (James Gandolfini) waiting for his family in a Jersey diner. A guy comes in the diner – a hitman delivering Tony’s final comeuppance? – then disappears into the bathroom. The scene cuts between Tony in his booth, his daughter outside awkwardly trying to park her car, his family gathering at the table, and then…blackout. Actually, an extended blackout. Ten full seconds of nothing before the end credits roll. Hundreds of subscribers called the next day who had turned their sets off before the end credits wanting to know how the show had ended thinking their cable systems had lost the signal. They weren’t any happier about the answer they got then those who had stuck out the 10 seconds.
In time, the artistry of that finale – which David Chase has steadfastly refused to explain – would come to be appreciated and the show’s close rated as one of TV’s best (if not most satisfying). But the monumental amount of fan pissed-offedness generated by Chase’s daring storytelling was the first – but not the last – time HBO confronted the price of its creative laissez-faire policy.
In 2000, the year after The Sopranos debuted, the company scored their third huge hit in a row with Six Feet Under. There’s a certain amount of confusion (and a lawsuit) over the origin of the series, but the story I heard in the company was that our original programming division approached Alan Ball, fresh off his Best Original Screenplay Oscar win for the 1999 feature American Beauty, with the idea of working with HBO on a show about a family-owned funeral parlor. Ball didn’t connect with the original idea, but came back with his own take on the concept and that was Six Feet Under.
Although SFU would always trail The Sopranos and Sex and the City in ratings, it is, arguably, the better example of the creative possibilities HBO was promising. Any attempt to synopsize or encapsulate the show does it a disservice. There were times it was darkly comic, and others when it was heavily dramatic, and sometimes wincingly soap operatic, and yet other times dauntingly philosophical and existential. The “hook” of the show – two contrasting brothers running the family funeral business after the death of their father – became more distant and irrelevant as the show increasingly followed the separate dramatic arcs of the various central characters. All these elements made Six Feet Under one of the more creatively erratic of what some of us in the company referred to as The Big Three, but also one of its most unique.
And when the show was at its best, it was brilliant television, and never more so than during its finale, often cited as one of the best in the history of television. The family’s youngest member Clare (Lauren Ambrose), after five seasons of her own trials and travails, has finally found her feet and is heading east for a job as a photographer’s assistant. As her car cuts across the arid plains of the southwest to the haunting strains of Sia’s “Breathe Me,” there are flash forwards (her own fantasies?) to the deaths of each of the major characters, some heartbreaking, some marked by gratifying closure, until finally Clare sees her own last moments on her deathbed, surrounded by the photographs of the family and friends who meant so much to her. Six Feet Under’s closing moments are that rare occasion when TV rises to a cinematic poetry, visually and thematically eloquent, as good as TV can ever be.
Up until the mid ’00s, when The Big Three began to close out their runs, HBO was TV as good as TV could be. Behind The Sopranos, Sex and the City, and Six Feet Under were niche shows like Dennis Miller Live, The Wire, and Deadwood, Oz was still running, there were the channel’s ace boxing coverage, Inside the NFL, music and comedy specials, documentaries and family programming, late night erotica… The service had a deep bench of acclaimed, award-winning, and popular programming that TV writers regularly pointed to as an example of what TV could be rather than what it too often was.
And within a few short years, through circumstance, hubris, and plain bad luck, the channel which, for a while, looked as if it could do no wrong, seemed to suddenly become one that couldn’t do anything right.
Fall and Rise
Failure is inevitable. Success is elusive.
As HBO’s CEO, Michael Fuchs, who’d come up through the company’s programming side, had spent 11 years working to transform the service from a movie channel with some pleasant original filler into a true programming platform. Ironically, Fuchs’ vision wouldn’t come to full fruit until after he’d left the company in May 1995, and it would happen under a guy who had no programming experience at all: Jeff Bewkes, who took over the CEO’s slot after Fuchs’ departure.
A friend of mine in the company who’d worked with Bewkes once explained his programming philosophy while we were talking about some of the company’s big dollar extravaganzas, like Band of Brothers. Bewkes didn’t interfere with the creative side. “If you can make it make business sense to him, Jeff’ll say, ‘Go ahead.’ If you can tell him where the money is coming from, what it’ll do on DVD, overseas sales and all that, and it makes sense to him, he’ll let you go.”
It was obviously a management strategy that seemed to work, taking the channel through a string of high profile winners i.e. From the Earth to the Moon, Sex and the City, The Sopranos, Six Feet Under, and Band of Brothers. These were just the battle wagons; in support were a host of equally praised if more narrowly appealing programs like the compelling prison drama Oz, the hysterically acidic comedy Curb Your Enthusiasm, biting cop drama The Wire, and the provocative and ultimately heartbreaking miniseries The Corner, based on the true account by David Simon and Ed Burns, The Corner: A Year in the Life of an Inner-City Neighborhood. Not that the service didn’t have its duds, most conspicuous being The Mind of the Married Man which critics took as – despite company programmers’ objections – a male version (and a lousy mail version) of Sex and the City.
Still, the hits outnumbered the flops, and, coupled with the service’s already established stature in original films, documentaries, children’s programming, and sports, the steady parade of awards and accolades, it’s arguable that for the first time in its history, both consumers and journalists, in large measure, had stopped thinking of HBO as simply a movie channel, and more as the one place in the cable universe that was making TV as good as TV could be.
In 2002, in recognition of the success he’d had at the helm of HBO, Bewkes was brought uptown to Time Warner corporate as president and chief operating officer, in line to succeed then TW CEO Richard Parsons (Bewkes would get the top spot in 2008). Replacing him as HBO’s top guy was Chris Albrecht.
Albrecht seemed like a natural choice. If Bewkes was the Business Guy, Albrecht was the Creative Guy with a pedigree going back to his young days as a stand-up comic at the famed Improv comedy club (Albrecht would eventually become a co-owner of the Improv). He’d joined HBO’s programming staff in 1985 after five years at powerhouse agency ICM. From 1990-1995, he’d given a powerful demonstration of his programming expertise as the head of HBO Independent Productions, with winners like Everybody Loves Raymond and Martin to his credit. After Michael Fuchs left the company to head up Warner Music in ’95, the original programming division was reorganized. Bridget Potter, the company’s long-reigning head of original programming who’d spent so many years trying to do a lot with a little, building the company up from forgettable junk like 1st & 10 to From the Earth to the Moon, was replaced by Albrecht in 1996. It was Albrecht who’d overseen the company’s programming rise from “promising” to “it doesn’t get any better than this.”
But Albrecht inherited a company from Bewkes teetering on the edge of what would prove to be one of the most challenging periods for the company since its early days. Over the next five years, Albrecht would find himself fighting the clock as his flagship shows aged, circumstance as the film and TV industry was rocked by one of the costliest strikes in its history, tactical missteps, and his own programming hubris.
Having hit three, consecutive home runs with Sex and the City, The Sopranos, and Six Feet Under, the company now seemed to have trouble finding the same programming sweet spot. Year by year, as the Big Three grew a little longer in the tooth, the question that seemed to be getting asked more and more – both inside and outside the company – was, “Where’s the next Sopranos?” And when one wasn’t forthcoming with each year, the question changed to, “Has HBO lost its mojo?”
Throughout Albrecht’s tenure, it was clear he was trying to push the boundaries of the service as far as he could and take the channel into places it had never been before. Shows like Entourage (2004-11) and the button-pushing shock comedy Da Ali G Show (2003-05) aimed directly at a young audience the company had previously devoted little airtime to, and which Albrecht understood constituted the next generation of consumer. Off-the-wall culty efforts like Flight of the Conchords (2007), Summer Heights High (2007), and Little Britain USA (2008) aimed at the same mark.
He cut a highly-touted deal with Section Eight Productions, the company formed by George Clooney, Steven Soderbergh, and Grant Heslov. This brought HBO K Street (2003), a daringly improvised drama delving into the muck of Washington lobbying firms, and the appropriately titled Unscripted (2005), another improv effort about struggling actors in L.A.
There was Lucky Louie (2006), an attempt to breathe fresh life into the sitcom with Louie CK starring in the channel’s first three-camera comedy; The Comeback (2005), with Lisa Kudrow spoofing her own post-Friends existence as a fading TV star trying to reboot her career. Extras (2005-07), from Ricky Gervais, dealt, in darkly comic fashion, with the lowest rungs of the Hollywood ladder, and was taken on with the hope Gervais would be able to create the same kind of buzzy niche success he’d had with his The Office. Tell Me You Love Me (2007) was a sexually frank, despairing portrait of dysfunctional couples, and In Treatment (2008-2010) was an intimate, probing look at the dynamic between patient and a therapist with his own problems.
No denying Albrecht and his crew had no shortage of programming guts. What the company also had, however, was a shortage of hits. Entourage found a comfortable niche as a midrange winner, shows like Extras and In Treatment had short runs as critics’ darlings, but Albrecht couldn’t seem to get anything on the air generating Sopranos/Sex and the City/Six Feet Under caliber numbers. K Street and Unscripted were critically panned flops, only the critics seemed to get The Comeback, Lucky Louie was a lambasted disaster, and Tell Me… was so despairing, nobody wanted to watch it.
The thing was, these were almost universally shows you could respect. Even flops like Lucky Louie and K Street had to be appreciated for what they were trying to do, even if they failed so completely to do it. To some of us in the company, it sometimes seemed Albrecht & Co. was more concerned with producing shows that were creatively ambitious instead of watchable. Tell Me You Love Me is a perfect example. It was a brave, unflinching look at modern relationships. It just didn’t take into account how few people wanted to spend an hour each week watching six miserable people in three crappy relationships.
That was the mark of some of the most ambitious – and expensive – efforts of Albrecht’s time heading up the company: shows that impressed, even dazzled, maybe even won acclaim…but didn’t get people watching.
Like Carnivale (2003-05), a visually impressive, highly allegorical good vs. evil piece set during The Depression whose artistic reach exceeded its grasp and which steadily lost viewers over its two seasons.
And the much-praised Western series, Deadwood (2004-06), from veteran TV writer David Milch whose credits included such classics as Hills Street Blues and NYPD Blue. With its rich production values and broad canvas, it was clearly HBO’s shot at launching the next The Sopranos. Critics were near-unanimous in their praise, and the show was often cited as being one of the best series on TV. But Westerns tend to skew toward an older, male audience and that narrowed the show’s appeal from the outset. Sheer excellence in execution couldn’t buck a historical trend which had seen the Western genre peak on the big and little screen in the 1960s/1970s, and damn near become extinct in subsequent decades. By the time of Deadwood’s premiere, there hadn’t been a sizable Western success since Clint Eastwood’s Oscar-winning Unforgiven twelve years before.
Generation Kill (2008) betrayed a similar sense of immunity to popular trends. GK was a seven-part miniseries from David (Homicide/The Wire) Simon and Ed Burns, based on reporter Evan Wright’s book about his days as an embedded reporter with a Marine unit during the 2003 war with Iraq. Like Deadwood, GK was lauded for its authenticity and textured drama. The mini was nominated for a host of Emmys including Outstanding miniseries. It was also HBO’s lowest-rated miniseries. The lousy numbers, even in the face of universal acclaim, shouldn’t have been that much of a surprise. Going back to George Clooney starrer Three Kings in 1999, no movie about America’s Mideast ventures – whether a big-budget effort like Jarhead (2005) or an art house denizen like In the Valley of Elah (2007) had done better than middling business, and most had been flops.
The track record for movies and series about the country’s founding days is also rather iffy, enough so that – as with Deadwood and Generation Kill – one wonders who the company thought would tune in to John Adams, another opulently produced, critically-respected effort, this one an adaptation of historian David McCullough’s acclaimed biography of the nation’s second president. Adams did almost twice the numbers of Generation Kill…which still made it a stiff, pulling less than half the viewing of Band of Brothers.
The company’s strikeouts during the Albrecht years were compounded by several clumsy PR missteps, particularly surprising in a company long acknowledged as one of the masters of publicity and promotion.
Deadwood was a logistically demanding series to make, requiring the recreation of the historical frontier town. In keeping with the show’s broad canvas storytelling, the cast included over 30 significant characters. Evidently assuming the show would be a major hit, the production deals for the show pushed off some costs until the series’ fourth season. By the third season, however, it was clear no amount of hype or acclaim were going to improve Deadwood’s numbers, and those numbers didn’t justify the escalating costs that would kick in if the series continued. HBO therefore made the practical decision of cancelling the show…kind of. And that was the problem.
The company never announced cancellation. It didn’t say anything. Word that the show wasn’t coming back began to leak out in interviews with cast members saying that since they hadn’t been approached about signing up for Season 4, they assumed the series had been cancelled. Yet even once the notion there’d be no next season became public, the company still fumbled, as if it was unable to say the word, “Cancelled.”
Why? What was the big deal? Well, it was a bit like the Arli$$ business but in reverse. With Arli$$, the company found itself sticking with a show it – along with most reviewers – didn’t much care for. Deadwood was the kind of brilliantly iconoclastic TV HBO kept saying it was in business to make, and now it was going to have to do something all those gutless commercial programmers did to terrific TV programming with depressing regularity: cancel it because of lousy numbers. HBO was supposed to be the kind of network that didn’t worry about numbers that way.
And frankly, it tried not to. Cop drama The Wire never had good numbers. Actually, they were shockingly small. But sticking with the series made a Bewkesian kind of sense. It was a comparatively cheap show to do, and the huge positive buzz it generated for the service – out of all proportion to its viewing numbers – made it a good investment.
But Deadwood was no cheapie, and sinking millions into a series with such feeble numbers meant less money to put into other shows which might do better. There was no practical way to keep Deadwood on the air.
HBO just couldn’t get itself to say that. What it did say was everything but. Deadwood, the company explained, was only supposed to run four seasons at most, paralleling the short existence of the historical Deadwood. David Milch was already working on other HBO projects, but the service would do two two-hour movies to wrap up the Deadwood tale (although nobody in the company believed those movies would ever be produced…and they never were).
The show Milch was working on premiered the year after Deadwood went off the air: John from Cincinnati. A Jesus allegory set in the contemporary surfing scene of southern California, the show was a bad mix of the obvious (Jesus Christ = John from Cincinnati – get it?) and the annoyingly opaque, and was a ratings and review disaster. As for Deadwood’s rabid if numerically limited fans, who had looked at their favorite show’s cancellation and the commitment to John/Cincinnati as some sort of trade-off, they called and emailed “You cancelled Deadwood for this?”
HBO had also dropped the PR ball, although not in so glaring fashion, with Rome (2005-2007). One of the most expensive productions ever for television (cost of the first season was north of $100 million for 12 episodes), Rome was a big canvas spectacle intended to depict the ancient empire with all the grit, gore, and carnality that the grand scale epics of Old Hollywood couldn’t/wouldn’t show. The idea was something of a cross between big screen epic and the layered, adult drama of an I, Claudius. While Rome never generated the kind of viewing numbers hoped for after that kind of outlay, and the reviews weren’t quite in The Sopranos category of raves, overall viewers and critics were impressed by the opulent production values and entertained by the juicy goings-on among the toga set.
HBO had gone into Rome labeling it a miniseries, but the show had done well enough for the company to call for a second season. But even before the second season aired, Albrecht announced that the second season would be Rome’s last.
The only way HBO could afford the monumental costs of Rome was as a coproduction with overseas partners, particularly the BBC. Those coproduction arrangements extended to a second season if all the partners agreed. But there was no such option for a third season. To continue on would’ve severely crippled HBO’s original programming budget. Albrecht explained this to the press, but the word didn’t quite get down to the viewers. “Where’s Rome? What happened to Rome?” was the question that kept appearing in the company’s viewer emails. To many, it looked like – in Deadwood fashion – HBO was, again, acting like one of those nasty broadcast networks, cancelling yet another good show because of the numbers the company had so often, in the past, declared to govern program decisions the way it did for commercial TV.
By the end of 2007, the company had been through a streak of shows subscribers didn’t like, some programming decisions subscribers didn’t understand, its Big Three – Sex and the City, The Sopranos, and Six Feet Under – had all had their finales. The only show close to a major success the service had produced since Albrecht had assumed command was Big Love (2006-11), a contemporary drama set among a polygamous community. The series received mixed reviews and turned in strong numbers, although they stood below those of the Big Three.
And then came the strike.
Signs of a possible Writer’s Guild strike had been showing throughout much of 2007 and HBO, like every other TV programmer, was scrambling for a fallback strategy if and when a strike was called. The company had weathered an earlier WGA strike in 1988 with little problem, but, in those days, HBO had still primarily been a movie-driven service. But now the company’s flag had been planted high on the hill of original programming, and the service now had many of the same vulnerabilities as its more conventional network counterparts. A strike would not only meant no material for either new shows or existing shows could be developed during the strike, but it would throw off the TV calendar for months afterward, particularly the 2008-09 pilot season.
As it turned out, HBO was in better shape than most programmers. There was programming already in the pipeline: the second season of Rome, Generation Kill and John Adams were completed and could be run during any strike-produced void instead of spacing them out as had been the original intent, and the possibility of a strike had helped HBO decide to call for another – and last – season of the low-cost The Wire. Together with documentary and sports programming not affected by a strike, as well as its movie programming, HBO would be able to present a stream (although a thin stream) of original programming for several months while the commercial broadcasters would have been filling their time with repeats and strike-proof reality programming.
And, when the strike was called for in November of 2007 (it would run until February 2008), that’s how things played out. Despite the low ratings for Generation Kill and John Adams, HBO came through the strike in not-so-bad shape. However, that didn’t solve its more serious underlying problem which was that with the arguable exception of Big Love, the service didn’t have a single major hit on the air.
Part of the problem was HBO was, as one exec explained to me, a victim of its own success. “Nobody will ever know how lucky we were having three big shows on the air at the same time,” he said, referring to Sex and the City, The Sopranos, and Six Feet Under. By this he didn’t mean HBO had fluked into a string of good shows. Successful programming isn’t simply a matter of a network programming staff sifting through a pile of pitches and then, in an exercise of taste, expertise, and insight, declaring, “Ah, this is the one!”
Programming success requires the right people – both behind and in front of the camera – coming together and doing what they need to do to execute a show’s vision as well as it can be done. And then, providing all concerned pull off that feat, the show needs to be scheduled on just the right day at just the right time and promoted in just the right manner to pull an audience. And then…
The audience has to come.
It’s not a lock. When Napoleon said, Give me lucky generals, he knew what he was talking about because in TV, you can do everything right, and still fail. The annals of programming are filled with great shows that never found an audience. The failure rate for new shows on the major networks each fall is somewhere around 90%, for both junk and some very good TV. You can do everything right, but then you still have to get lucky.
For HBO to be that lucky three times in such a short space of time – bing, bang, boom – was remarkable. It’s probably not going to happen again, this exec told me, but it’ll be judged as our failure.
That was part of the problem. The other part was that HBO’s ever-extending string of duds through the mid-’00s was viewed as less about luck then in picking lousy shows.
I don’t pretend to know what the thinking was uptown at Time Warner concerning Chris Albrecht: were they going to let him continue on as he’d been going, hoping he’d ultimately pull it out (one HBO programmer told me, “Give Chris this; he may have rolled the dice on some chancey shows, but if the numbers came back bad, he didn’t hesitate to pull the plug on them”)? Were they going to leave him in place but restrain the company’s recent penchant for overly-challenging programming? Or were they going to show him the door?
And that’s where Fate took an ugly but resolving hand. In 2007, Albrecht was arrested in a physical confrontation with a woman friend in Las Vegas. During the press coverage, it came out this was not Albrecht’s first such incident, and Time Warner called for his resignation.
Albrecht’s departure left HBO with a managerial dilemma. There was no clear heir apparent in the company. Certainly no one from a programming division with a less than impressive track record would do. Nor did the company want someone from the outside. Throughout HBO’s history, its bosses had come from inside the company; people who understood the HBO culture, who had a feel for where the company had come from, and from that an understanding of where it needed to go.
The answer, at least in the short term, was a triumvirate arrangement. Bill Nelson, who’d joined the company in 1984 as a vice president and assistant controller, was given the executive chairman and CEO seat responsible for overall management of the company. Nelson had proven himself in his 23 years coming up through the business areas of the company, and it was the business centers of the company that would primarily fall directly under him.
Eric Kessler had been with HBO almost as long, but had come up through its marketing areas, having come into the company in 1986 as a marketing manager in the company’s home video division. All of the company’s marketing areas were placed under Kessler who was given the title co-president.
But perhaps the most interesting choice was rolling in programming under another co-president, Richard Plepler. In the late 1980s, Plepler had been hired by HBO as a consultant, working with the company on enhancing its profile in non-entertainment circles. In 1992, he was hired as Senior Vice President of Corporate Communications, with the company’s programming and non-programming PR arms under him. A dapper, erudite, culturally-informed guy, despite not having a programming background, Plepler demonstrated an understanding of the kind of programming that worked for HBO, and, just as tactically important, the way it worked for the service.
I remember Plepler once explaining what the rebuilding plan for the service needed to be as the company was still trying to shake off Chris Albrecht’s exit. “We need one or two big shows,” he said, “and then a couple of shows in the middle range.” He was confident about finding those mid-range shows; the open question was, naturally enough, could HBO find its Big Show mojo again.
The following year, HBO hit its first home run since the days of the Big Three with True Blood. Based on a series of southern Gothic vampire novels by Charlaine Harris, and adapted for the service by Alan Ball, who’d been the creative mind behind Six Feet Under, True Blood was – with replays and on-demand numbers rolled in – generating viewership numbers in the Big Three range. Although the reviews were mixed, the fan response wasn’t.
HBO had its big hit, and now came the smaller-drawing but critically-lauded shows that filled in the second tier: the opulent period gangster drama Boardwalk Empire (2010); comedy-drama Enlightened (2011); horse race drama Luck (2011) from David Milch; The Newsroom (2012) from one of the most literate writers in TV, Aaron Sorkin; the sharp-eyed political comedy Veep (2012) with Julia Louis-Dreyfuss in an Emmy-winning role as a fumbling vice president.
Were they all gold? Enlightened generated more press than viewers, and Luck was cancelled after the deaths of several horses involved in the production, but the company was flexing its programming muscle in a way it hadn’t in nearly a decade and the press had turned from its broken record of “Has HBO Lost Its Mojo?” to “HBO Is Back!”
But then the company did strike certifiable 24k success with Girls and Game of Thrones.
Girls is the creation of series star Lena Dunham. A controversial, love-it-or-hate-it series about a group of young female friends in New York, some call it the next generation version of Sex and the City. And, like SATC, it draws many of the same criticisms that earlier series did in its early seasons; that its protagonists are a bunch of spoiled, self-indulgent, self-involved types trapped in superficial concerns. Yet others see an on-target explorations of Millennial Generation angst and uncertainty. With viewing numbers that are solid though hardly stellar, Girls biggest contribution to the service is that it has people talking about an HBO show – arguing, debating – in a way no HBO program has done in years.
With Game of Thrones, the company has been able to put all the right components together. Based on the fantasy novel series A Song of Fire and Ice by George R. R. Martin, GOT is like a Lord of the Rings for grownups, earning both praise and viewer devotion and posting the highest viewer numbers for any HBO show…ever. Including previous all-time champ The Sopranos.
The success of True Blood, Girls, and Game of Thrones also signals HBO’s ability to recalibrate its direction, a recognition that the game has changed for the company. The Big Three were products of another generation’s sensibility, a holdover from the kind of creative sensibility that had ranged from Chinatown (1974) to Goodfellas (1990). It’s a tickling question, wondering whether the Big Three would do as well today…or if Blood or Thrones would do as well back in the late 1990s.
A new generation of consumer is coming into the marketplace, growing up without a particular affinity for the realistic, gritty content of a generation or two ago, but more attuned to elements of the fantastic. HBO has re-targeted itself at a new generation of consumer, read it well, and scored its hits.
Does the company stand as tall today, even with these successes, as it did 10-15 years ago? I’d argue not, but not through any failing on the part of HBO. One of the company’s biggest challenges going forward is that it is no longer the only tall tree in the forest.
The only thing we know about the future is that it will be different.
Home Box Office has dodged more bullets than Wyatt Earp at the OK Corral. Going on the satellite in 1975 turned the company from a regional possibility into a national success; then came “hitting the wall” and the challenge of VCRs in the 1980s; and then there was the late 1990s course correction which turned the service into an original series king; and then there was the struggle of the Chris Albrecht years and the WGA strike.
Today, HBO has its big hits – Game of Thrones and True Blood, and its second tier, buzz-making winners like Girls, The Newsroom, Veep and Treme. Medical dramedy Getting On, and Looking – often described as a gay Sex and the City – show the service hasn’t gotten any shyer about trying to tackle provocative subject matter in risky ways.
And it’s worked. HBO is available in a good part of the world, and here, in its domestic market, the company has more subscribers than Showtime and Starz combined.
But success in television can turn on a dime: at this writing, True Blood and The Newsroom are looking at final seasons, Treme has wrapped up its run, and Getting On and Looking have yet to prove themselves. If HBO successfully fills those newly-made holes in its line-up, the media coverage will be about the resiliency of the leading pay-TV company. If the service doesn’t, it’s “Has HBO lost its mojo?” all over again.
HBO’s challenges – both in the near- and long-term – are compounded by a massive reconfiguring of the TV game board. A decade ago, what made HBO’s programming Big Three – The Sopranos, Sex and the City, and Six Feet Under – so damned big was they were close to being the only trees in the forest. HBO regularly dominated certain Emmy categories because the broadcast networks couldn’t compete against a programmer creating content without worrying about pleasing mass audiences, advertisers, and the FCC, and cable channels couldn’t or wouldn’t spend the money to make HBO-caliber shows. That forest has a lot more trees these days.
AMC has turned out three monsters – Mad Men, The Walking Dead, and the recently concluded Breaking Bad, this last getting the kind of huzzahs during its brilliant final season the industry hasn’t seen since the days of The Sopranos. FX’s winners include The Shield and Sons of Anarchy, off-the-wall It’s Always Sunny in Philadelphia, and the critically heralded comedy, Louie. USA has a full stable of fun stuff like Burn Notice and Suits, and the 2009 finale of its quirky cop show Monk was the highest-rated scripted episode of a cable show in the industry’s history, not broken until 2012 by The Walking Dead. Starz has had Spartacus, and, at this writing is rolling out the Michael Bay-produced pirate extravaganza, Black Sails. Showtime scored with Dexter, Nurse Jackie, Weeds, and has a bona fide hit in Homeland, IFC has Portlandia and Maron, Sundance can brag about Top of the Lake and French undead import The Returned. HBO no longer sweeps the Emmys not because of any qualitative falloff in its programming, but because it now has to fight against a slew of worthy contenders, some of whom also have the benefits of having a reach of over twice as many viewers, and who don’t charge extra fees for their service.
HBO’s oncoming challenges aren’t only the comparatively simple one of other programmers now making a lot of great and adventurous TV. The very concept of what constitutes a programmer is also changing.
HBO may have more subs than the next two pay-TV services combined, but, in 2013, sub numbers for subscription streaming service Netflix surpassed those of HBO. Netflix has a movie library infinitely deeper than HBO’s (although HBO has a substantial edge in original programming), it’s monthly subscription fee is significantly less, and it’s an entirely on-demand service; watching what you want to watch when you want to watch however many times you want to watch. Netflix has also entered the original programming arena and in impressive fashion with, among other offerings, Orange Is the New Black, and the Emmy-winning political drama, House of Cards.
In 2013, according to a February 2014 Variety story, HBO took in almost $5 billion in revenues, so the service is hardly suffering from the competition. But, during the last quarter of ’13, Netflix revenues were running only $100 million behind those of HBO, and growing faster than those of the pay-TV channel. No wonder other outfits – Amazon, for one – are looking to horn in on Netflix’ streaming territory with their own slate of original programming (Amazon has the Garry Trudeau-created political comedy Alpha House starring John Goodman among others).
But, as I said, success in TV turns on a dime. Breaking Bad is gone and Mad Men is winding down at AMC which puts them in the same boat HBO was in when its Big Three folded up their tents. Netflix has started its original programming campaign with a bang, but the Netflix programming model fosters binge viewing, and it remains to be seen if the service can supply enough programming of Orange/Cards caliber on an on-going basis to keep subs interested year round, and do it on a cost-effective basis (the tab for House of Cards first two seasons is reportedly somewhere around $100 million, while Netflix’ monthly subscription rate runs about half the typical HBO monthly subscription). And that rapid Netflix growth rate we were just talking about? HBO’s been around for over 40 years; Netflix has the growth room of any newbie upstart, but at a certain point, it’s inevitable that they’ll plateau, too.
The service, with what I like to think is typical astuteness, saw the reconfiguration of the pay-TV landscape coming, and, also typically, adapted. In 2010, HBO introduced HBO Go, an online streaming service whose reach has since expanded from subscriber homes to a spectrum of portable devices including the iPad, iPhone, Android, Kindle Fire, Xbox 360, and others. HBO Go provides unlimited on-demand mobile access to the service’s original programming library as well as current movies under license. In other words, if you like HBO’s brand of TV, you’re not stuck watching it in your living room.
But HBO Go is not a stand-alone service, and it’s still tied to a conventional cable or satellite TV subscription. Stand-alone would be the next evolutionary step, but that raises a host of conflict issues with HBO’s cable affiliates which still provide the bulk of HBO’s business. Still, it shows the service hasn’t lost its eye for exploiting whatever new and viable technology comes down the pipe.
But what all this widening, mobile access promises in the way of programming is an open question. Back in 1992, Bruce Springsteen released the song, “57 Channels (And Nothin’ On), which, as I recall from my early complaint-taking days, was not an uncommon cable subscriber complaint. Well, there’s a lot more than 57 channels out there, and now there’s cell phone apps and online streaming services, all feeding what has shaped up to be a bottomless consumer appetite for content. This expansion of the entertainment universe has fractured what used to be a comparatively monolithic mass audience into a thousand thousand shards, and it’s an open question about whether this reconfiguring playing field is going to be the cornucopia of engaging content providers and users fantasize it to be.
Bob Zitter, one of HBO’s hardware execs, gave a prescient warning in a speech at the Cable and Satellite Summit in Hong Kong in December of ’94:
…Despite the attention given these days to technology, we must remember the fact that consumers do not buy technology. Consumers seek out and buy entertainment and information…Will all (these new technologies) lead to new programming? The common wisdom is that these technological changes will increase the number of niche services…I expect that many services will contain “recycled” programming…Because vast amounts of money are required to produce compelling, interesting programming that people want to watch, it is not likely that companies will risk millions of dollars to produce attractive programming that will have uncertain transaction revenues as their only source of income.
Actually, Zitter was a bit off in his prediction. He was right in that all these new content providers – Netflix, Amazon, etc. – recognize that their business is content-driven and the last thing consumers need is yet another platform that deals in movies and TV shows that have already been recycled countless times. But he was wrong that these companies wouldn’t risk millions on new, original content. Their business – as Zitter said – depends on doing so.
Here’s the problem. You smash the mass audience into little slivers. Each sliver wants quality content, but quality content costs big bucks, and what do you do if there’s not enough big bucks in your sliver to pay for the quality content your sliver of the audience wants?
We’ve already had a taste of what happens in that dynamic.
I’m writing this about the time Jay Leno made his goodbyes (for the second and presumably final time) from The Tonight Show after a 22-year run to be replaced by Jimmy Fallon. When I was a kid, late night talk TV was Johnny Carson and that was it. According to a 2/4/14 Los Angeles Times story by Scott Collins on Leno’s Tonight Show departure, there are now “…more than 20 late-night talk shows on broadcast and cable, including (Conan) O’Brien’s TBS show, Comedy Central’s The Colbert Report and E!’s Chelsea Lately.”
That’s what TV programmers call “clutter,” and in the need to break through the clutter of too many choices, and audience segments too slender to support Game of Thrones and Breaking Bad caliber programming, more than one programmer has taken the low road: the exploitative, the sleazy, the lurid and prurient, the condescending and mocking. Think The Jersey Shore and Keeping Up With the Kardashians and Here Comes Honey Boo Boo and Teen Mom. In a world of small audience slices, these kinds of shows are cheap and they draw enough of a viewing crowd to be an asset to their respective cable networks. It’s hard not to see the trend getting worse. If you draw an ancestral line backward from The Jersey Shore to its MTV great-grandparent, The Real World, which debuted in 1992, it’s clear it already has.
Look, TV – like any other entertainment medium – has always turned out more crap than good stuff. The success of HBO opened the floodgates to more TV, and more TV means more good stuff but a whole lot more crap.
What the success of these kinds of shows also suggest (keeping in mind that at its peak The Jersey Shore viewership was producing viewing numbers higher than those of a lot of broadcast network prime time shows) is a changing viewer sensibility, particularly among young viewers; the boys and girls that HBO and other programmers are counting on to keep them in business when they grow up. I think the chief worry for HBO and its competitors, basic and premium, is a new generation of audience that may not particularly like TV.
In every class I teach, no matter the subject, I always start the semester with an informal poll, asking my students where they get most of their information, how much they read, how much time they spend with their various technologies. As a Baby Boomer who grew up glued to the Boob Tube, I’m startled at how low the numbers are when I ask, “How many of you watch TV for at least an hour every day.”
Among my 18-twenty-somethings, it tends to run 10-20%. But when I ask them how much time they spend online/texting/tweeting/videogaming, I’ll get 60-80% admitting to three-four hours a day, and some even more.
Ok, this is anecdotal, but the research shows a major shift in how the next generation of audience watches TV, and what they like to watch. Oh, they still watch a lot of TV, they just don’t watch it on TV. They prefer on-demand viewing to traditional “appointment” viewing, the convenience of watching anywhere to watching the home set, and – as the extravagant rates of music and video piracy suggest – they don’t particularly like paying much for their entertainment…or even paying anything.
Growing up in a universe of hundreds of channels and TV entertainment available through alternative on-demand pipelines like Netflix and Hulu, it’s an open question whether the next cohort of viewers will recognize network brands the way earlier generations of traditional viewers did, or give any particular network or service any more weight than others. I grew up watching TV when the Big Guys were still the three major broadcast networks – ABC, CBS, NBC – and when HBO came along, it was this “other thing” that stood apart and alone. But Millennial viewers have grown up with a mouse in one hand, a cell phone in the other, and hundreds of cable channels at their disposal. The brand names NBC and HBO may carry no more than equal weight to them with Comedy Channel and Nickelodeon.
Does this matter?
Well, if you’re a broadcaster or basic cable channel staying entirely or partially alive on advertising dollars, it matters a whole hell of a lot. No brand recognition, no network loyalty, and that’s a drain on viewership. When on-demand viewing outstrips appointment viewing, what kind of appeal can a network offer an advertiser? “Eventually a lot of people will see your commercial,” isn’t as enticing as, “We can deliver 13 million viewers to you for a Tuesday at 8:30 p.m. spot.”
Brand recognition may be even more important to pay-TV services like HBO and Showtime. Premium services recognized that two decades ago; that’s why they started putting self-identifying “bugs” on-screen during programs, so people would know they were watching what they were paying for. Will viewers devouring great gulps of programming from a variety of sources, watching stuff on the way to work on their phones, on their Kindle while on vacation – are they going to attach shows to networks to justify those monthly payments?
In 2012, I wrote a piece for Sound on Sight responding to a Forbes.com article by one of the site’s regular contributors, Paul Tassi, in which he seemed to be putting forth the idea that younger viewers wouldn’t steal so much content if content providers didn’t charge so much. Reading between the lines, I got the impression that any price providers could live with would be considered too high. As it happens, I came across Tassi’s piece about the same time I saw a 2/19/12 Associated Press story by Martha Irvine which cited a Columbia University survey showing that 70% of 18-29 year olds had availed themselves of illegally obtained video and/or music content. So, you put those two observations together, and what do you get?
Speaking in admittedly broad terms, you get a generation growing up that doesn’t want to pay what content providers want to charge. Considering these young consumers are just as willing to while away a couple of hours watching dancing cat videos and tweeting about what they’re having for dinner at that moment, the challenge for a premium service like HBO in continuing to drum up new subscribers at a not-cheap monthly rate in the numbers required just to stay even seems – to my eyes – to grow steeper in the next few years. There may not be a more resilient and flexible programmer than HBO, but primacy in TV programming is not eternal. Forty years ago, the broadcast networks held over 90% of TV viewing. Now, there’s nights they don’t even get half, and a cheap show about twenty-somethings getting vomit-on-themselves drunk in a beach house can outdraw a $2-3 million per episode of network drama.
One more thing, and this doesn’t really have anything to do with Home Box Office other then they were the outfit that led the TV industry to this point.
For as long as TV has been popular, going back over a half-century there have been critics, guardians of the public morality, sociologists, spiritual leaders and everyday moms and dads complaining about the myriad ways TV was the mental equivalent of junk food: bad for you. It made people intellectually lazy, kids spent time watching it when they should’ve been doing homework or out in the open air playing, it hypnotized husbands during sports seasons, wives during the daytime soap operas.
With only three major networks, there was still something cohering about it. TV – for all its junk food aspects – could, at least at times, act as a pop culture glue holding us all together. As I’m writing this, it’s the 50th anniversary of The Beatles’ arrival in America. Everybody and his brother, mother and sister watched their U.S. debut on The Ed Sullivan Show, the same way that just a few months earlier, we had all mourned together when a sniper’s bullet took the life of John Kennedy. We all watched the news footage from Vietnam, the Watergate hearings that ultimately brought down Richard Nixon. We all watched The Day After and shared what, at the time, may have been the country’s worst nightmare: nuclear destruction.
And, ok, let’s get a little less momentous. There were only three networks. We even knew the shows we didn’t watch. We all got the same pop culture references/jokes/catch phrases. There was a certain cultural/sociological unity to the place where we lived. What we experienced on TV we often experienced, more or less, as one people.
With more choice came less sharing. All that choice – on TV, on the Internet – fosters a separateness. People find the news they agree with, prefer distraction over discourse, and are capable of tailoring a media bubble suited to their specific tastes and wants.
Let me give that to you in practical terms. Back in The Day, we may have thought coverage of political campaigns boring, but they took up prime time on the only three networks we had; we couldn’t help but know what was going on.
During the last presidential primaries, I tried to have a conversation about the Republican Big Tuesday primary contests with two Public Administration majors in a class I was teaching at one of my state’s largest universities. I asked them who’d done well on Big Tuesday. Not only did they not know, but they didn’t know it had been Big Tuesday, they didn’t know what Big Tuesday was, and they didn’t know who any of the Republican contestants were. And these were two young people hoping to eventually get jobs in government.
HBO’s Michael Fuchs, whose company launched the modern cable age, took a dim view of where all this was going back in 1993 at a conference on the “Future of Television” sponsored by Harvard’s John F. Kennedy School of Government. “We run the risk of the technology sort of dehumanizing television,” he said, “of it outstripping the content…I feel a cumulative drop in the IQ of our audience. There’s a drop in the concentration spans.”
The syndrome is not distinctly or solely American. The French love Dallas and the Japanese like pie-in-the-face comedy. Give the world pay-TV and what we’ve seen so far is that while they do have an interest in news, either before or just after they get that, they invariably want music videos, sports, and movie channels filled with American movies.
While some may draw comfort from this homogeneity saying it proves that we are all brothers and sister under the sun, that we are more alike than different, again, the evidence indicates otherwise. Yes, maybe we all like to watch the same frothy stuff on TV, but you don’t need to be a Harvard grad in International Studies to leaf through any newspaper and understand that the world isn’t getting any friendlier, gentler, or more peaceful. Whatever people both here in The States and abroad are learning from TV, it’s not how to get along.
Still, the only thing certain about the future is that it is uncertain. You never know what it’ll be like until you get there. I could be all wrong about this. I’d like to be. I really would.
– Bill Mesce