Think Tank: HBO wants to get “bigger”

They want to get “bigger and broader” to compete with Netflix – but they use language only a commercial broadcaster would use

If you are a fan of HBO or any premium cable service you have to be concerned about what was reported in the New York Times on July 8.

Blaring the headline “HBO Must Get Bigger And Broader Says Its New Overseer”, executives from the newly-merged AT&T-TimeWarner were talking about the need to better complete with Netflix, who has become the big $13 billion gorilla down the road.  In a recent town meeting for employees lead by HBO President Richard Pleper and his new boss, AT&T executive John Stankey, they both stressed the need to get bigger – meaning more and more new shows – and maybe more hours to program them.

“We need hours a day,” Mr. Stankey said. “It’s not hours a week, and it’s not hours a month. We need hours a day. You are competing with devices that sit in people’s hands that capture their attention every 15 minutes.” Stankey also said: “I want more hours of engagement. Why are more hours of engagement important? Because you get more data and information about a customer that then allows you to do things like monetize through alternate models of advertising as well as subscriptions, which I think is very important to play in tomorrow’s world.”

So in other words, Stankey wants HBO to develop more shows and more hours of programming in response to the Netflix behemoth.

HBO has won a truckload of Emmy Awards and even more Emmy nominations. The programs mentioned are stamped in quality lore… The Sopranos. Game Of Thrones. Westworld. True Blood. Beforehand, HBO had to only contend with Showtime in terms of competition.

But the game has changed – and you can thank Silicon Valley. In addition to Netflix and their dirt-cheap pricing structure, you now have Amazon, Apple, and Hulu doing the same thing. And for the first time, Netflix passed HBO in the number of Emmy nominations it received. There is no doubt HBO, Showtime, and other cable premium services are feeling the heat from the Valley.

The problem is… some of the hundreds and hundreds of hours of Netflix original content…isn’t good. While there have been some gems in the comedy department (Blackjack Horseman and The Unbreakable Kimmy Schmidt), there are others who are bad (Fuller House, The Ranch.) Netflix has plenty of dramas but some were unnecessary (The Punisher) or just plain dumb (Iron Fist).

HBO has produced some flops (Vinyl, John From Cincinnati,  etc.), but their successes outweigh their misses. If HBO is thinking about increasing their original programming input, it better make sure the quality is up to speed – and it isn’t easy.

But here’s what is concerning: the language. “HBO must get bigger” is straight out of the broadcast TV station group playbook, and it’s not a smart idea. There is a current wave of mergers happening in the media business led by Sinclair’s $3.9 billion purchase of Chicago-based Tribune Broadcasting and a bidding war between Disney and Comcast for the rights to purchase most of the assets of 21st Century Fox.

As we all know bigger…is not necessarily better. If that wasn’t the case, iHeartMedia and Cumulus would be a bastion of quality content. And a lot more people would be employed in this business, especially in radio. If HBO were to increase its output just to compete with Netflix, it would do so by throwing a lot of stuff on the wall just to see what sticks. And doing so could harm HBO’s strong reputation for quality.

The race to scale up in order to compete with Silicon Valley has made the media go  business crazy, from television to radio to newspapers. Big Tech has become the go-to excuse for a reason why other media needs “to get bigger” when the real culprit is inept and incompetent management.  Television and radio conglomerates have a friend in the National Association of Broadcasters, who constantly pounds the drum for more and more media consolidation – crying poverty because they “can’t compete” with newer media such as streaming services, whether if its video or audio or Sirius/XM. And HBO is now pounding the same drum and given the quality programming they produce, they should know better.

HBO should stick to what it does best and that’s quality programming. Taking a page from the broadcast TV playbook because of a threat from Netflix and other streaming services in the name of “scaling up” is just plain suicidal. Remember the tagline “It’s not TV…it’s HBO”? It may not be TV, but HBO executives seem to be taking their cues from it.


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