Mavericks at Work: Why the most original minds in business win. William Taylor
to the lobby. The words on the screen, which run in a continuous loop, may be the most disruptive message in recent television history: “It’s not TV. It’s HBO.”
Television—has there ever been an industry that’s so glamorous and so desperate for fresh thinking? This is a business where strategy is based almost entirely on mimicry. Think back to June 1994, when NBC’s Today show unveiled its new-look broadcast from a glass-walled studio in Rockefeller Center. Within a year or two, virtually every morning show had a windowed studio somewhere in New York City. A decade later, when Donald Trump attracted big ratings for NBC with The Apprentice, rival networks raced to sign their own billionaires, from Internet bad boy Mark Cuban (ABC) to British magnate Richard Branson (Fox). And so it goes in the vast wasteland: Survivor begets Big Brother, which begets I’m a Celebrity, Get Me Out of Here! Or The Osbournes begets The Simple Life, which begets Growing Up Gotti. All of which beget a sense of resignation among viewers and an air of desperation among TV executives: how does anyone win when everyone is playing the same game?
And then there’s HBO. There’s no denying the network’s glittering financial performance over the past decade. With a subscriber base of nearly 28 million households, HBO dwarfs any and all of its pay-cable rivals. Its parent, Time Warner, doesn’t break out detailed financial results for the unit, but Wall Street analysts report the company’s average earnings growth at 20 percent per year since 1995, and estimated profits of $1.1 billion in 2004 (more than any other network, cable or broadcast) on roughly $3.5 billion in revenue. HBO alone has an estimated market value of some $20 billion.
What has truly distinguished HBO is not its profitability but its programming. As anyone within reach of a TV clicker knows, the network shaped the pop-culture conversation of the early 21st century with a trio of hits: Sex and the City (an antic mix of sex, shoes, restaurants, and relationships that ran from 1998 to 2004), The Sopranos (David Chase’s unstintingly original series about an angst-ridden New Jersey mob boss debuted in 1999), and Six Feet Under (the darkly comic chronicles of a dysfunctional family of undertakers from Oscar-winning screenwriter Alan Ball that ran from 2001 to 2005). The “3S’s,” in HBO parlance, drew prime time–sized audiences to a network that reaches only one-quarter of all TV households, planted fear in the hearts of broadcast executives, and won universal acclaim from critics. At the 2004 Emmys, the highpoint of HBO’s hold on pop culture, it received an unprecedented 124 nominations and won 32 awards.
Even with the retirement of two of the three S’s, HBO’s lineup has remained without peer in its invention, emotion, and overall excellence. In addition to its new-generation weekly series (including Entourage and Big Love), HBO has produced a stream of miniseries, made-for-TV movies, and theatrical releases. The network’s $120 million miniseries Band of Brothers (produced by Tom Hanks and Steven Spielberg) premiered on September 9, 2001, and drew a total audience of nearly 59 million people in the weeks following the September 11 terrorist attacks. The network has committed more than $300 million to two more mega-projects: Tom Hanks’s series about John Adams and a Pacific war series from Band of Brothers producers Spielberg and Hanks. Meanwhile, HBO’s much-acclaimed documentary group, run since 1979 by Sheila Nevins, has won 15 Oscars, 81 Emmys, and 25 Peabody Awards.*
HBO’s track record isn’t just a matter of commissioning smarter scripts or landing better actors than its rivals. It’s rooted in a distinctive point of view about how to create value in the entertainment business—the strangely disruptive proposition that quality and originality, not mediocrity and mimicry, drive long-term prosperity. With HBO, what you see on the screen reflects what the company stands for in the marketplace—ideas that reset the expectations of the viewing audience and set the network apart from decades of conventional wisdom in New York and Hollywood.10
Technically speaking, of course, HBO and the networks are not competitors. HBO sells itself to viewers; the networks sell their viewers to advertisers. But broadcast networks, pay channels, and basic cable are all clamoring for attention in an increasingly cluttered, competitive, and fragmented entertainment marketplace. In a business where originality is often viewed as a risk rather than an asset, HBO’s ability to connect with a big audience, elevate its expectations, and keep pushing cultural boundaries is more than a breakthrough for the network. It changes the game for everyone.
“The name of the game [at the broadcast networks] is whatever gets the largest number of people to watch,” says Alan Ball, a self-described refugee from the network TV “gulag” and the creator of Six Feet Under. “What is that? It’s a car wreck. It’s Fear Factor. It’s getting Playboy playmates to eat sheep’s eyeballs. They’re proud of that! ‘Look at the numbers we got! Supermodels puked on each other and people tuned in!’”
Talk to HBO executives about how they evaluate programming and they almost never mention target demographics or overnight ratings. (And they have never raved about sheep’s eyeballs.) “We ask ourselves, ‘Is it different? Is it distinctive? Is it good?’” explains Chris Albrecht, who left the network in 2007, after a 22-year run. “Ultimately, we ask ourselves, ‘Is it about something?’ By ‘about something’ I mean not just the subject, or the arena, or the location, but really about something that is deeply relevant to the human experience. The Sopranos isn’t about a mob boss on Prozac. It’s about a man searching for the meaning of his life. Six Feet Under isn’t about a family of undertakers so much as it is about a group of people who have to deal with their feelings about death in order to get on with their own lives. The next question is, ‘Is it the very best realization of that idea? Is it true to itself?’”
The truth about HBO is that it took years to hone its competitive strategy and programming formula—and honing the strategy required making an explicit decision to reject the business assumptions and performance metrics that guide traditional TV executives. The network, which began life in Wilkes-Barre, Pennsylvania, in 1972 as a pay channel that featured boxing, theatrical films, and stand-up comedy, had experimented with a touch of original programming from early on. Some of it was truly memorable, like Robert Altman and Garry Trudeau’s campaign mockumentary Tanner ’88. Some of it was downright horrible: the first “original program” on HBO was actually a polka festival special.
The strategic inflection point came in 1995. After a decade of holding different leadership posts at HBO, Chris Albrecht became president of original programming while Jeff Bewkes took over as HBO’s boss. (Bewkes is now president and COO of Time Warner Inc. Albrecht has run HBO since mid-2002.) At that time, HBO’s original programming was confined to two half-hour comedies, Dream On and The Larry Sanders Show, which the network touted as “the best hour of comedy on television.” (Company insiders joked that they should have called it “the only hour on HBO.”)
Albrecht and Bewkes convened the network’s executive committee and key original programming executives. The question before the group: are we who we say we are? The answer came back: not really. “The words we always used to talk about ourselves were ‘different,’ ‘worth paying for,’ ‘better,’” says Albrecht. “In that meeting, we came to the conclusion that we weren’t quite there yet, but that it was a great thing to strive for. The only way to move forward and win is to take chances and to be distinctive.”
At HBO, “distinctive” had meant “not on network TV.” At the 1995 meeting, says Bewkes, the leadership team chose to “jump fully off this cliff.” It was a big leap. The unit didn’t have hoards of cash to invest in programming, and there was no way to measure return on investment for any particular show. “It was a real mess,” he recalls. “But we just said, ‘Forget about it—let’s just do good stuff and we’ll solve it later.’ We decided to take the high road.” As it turns out, taking that road led to a decade of artistic creativity and financial prosperity unlike anything in television history.
Of course, even the high road has its share of potholes and detours. Success on the scale of HBO invariably