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It's amazing to think that the television megahit The Sopranos was turned down by all the major TV networks before Home Box Office decided to back the series. And what happened to the network executives who nixed one of the best, most influential TV shows ever? Nothing. They're still fully employed -- and as befuddled as ever.
With the Sept. 15 debut of The Sopranos' fourth season approaching, rival TV execs still seem to have no idea how HBO consistently finds gold where they see only lead. Need more proof? HBO programs were nominated for an incredible 93 Emmy awards this year (NBC received 89 nominations, the second highest number) and 94 the year before.
MOXIE AND MAGIC. Look for HBO's influence to spread rapidly. Its parent company, AOL Time Warner, recently promoted the pay-TV unit's top exec, Chairman Jeff Bewkes, to chairman and chief operating officer of its entire entertainment group -- clearly hoping he can import some of HBO's moxie and programming magic to its other divisions. ABC has signed up HBO to help it develop new programs. Everyone, it seems, wants to know HBO's secret formula.
I'm going to save everyone a lot of trouble. As a devoted fan, I can identify the keys to HBO's success. It may cause a lot of consternation among media execs to have such valuable information published. The truth is, if American companies generally adopted HBO's guiding principles, tens of thousands of high-paid management consultants would be forced to find real jobs. Madison Avenue would crumble. The nation's business schools would have to be shuttered, and millions of MBAs would have to forget everything they learned. But, hey, we journalists are paid to take big risks on behalf of others.
Herewith, the four keys to HBO's success:
Go with your gut, not market research: These days, most network shows and Hollywood movies are the product of focus groups. At HBO, programming decisions are largely based on the gut reaction of Bewkes and programming guru Chris Albrecht (who, with Bewke's promotion, has been named HBO's chairman and CEO). Audience research on The Sopranos, for example, wasn't impressive.
Bewkes and Albrecht committed to the series anyway because they thought it was good and they believed the creative people involved could sustain the quality over dozens of episodes. They were right. That's it. Now there's a high concept!
Be original: The trouble with audience research is that if you ask a focus group if they would like a series on, say, a dysfunctional family of funeral home owners (which is Six Feet Under's premise), they're going to say no. That's because audiences have never seen a series like Six Feet Under before and have nothing with which to compare it to. Same with The Sopranos, The Wire, Sex and the City, and the other series for which HBO is known. These are originals.
Of course, HBO operates five channels around the clock so not all its programming is so good. And it sometimes backs losers for too long -- as I think it's doing by giving the mediocre series The Mind of the Married Man another season. But on average, the quality of its programs is remarkably high.
Respect the intelligence of your audience: The values behind HBO's best shows are basically literary. Much is implied rather than overtly stated, as it is in network programs. HBO's shows may seem quirky, but they deal with big themes. Six Feet Under, for instance, is about facing death, being gay in a buttoned-down profession, and dealing with narcissistic parents and troubled siblings.
HBO's top shows are tough to get into because the plots are complex, and characters and stories develop over time. But once you start watching them, they're addictive. I watch The Wire and Six Feet Under twice a week because I miss so much in just one viewing.
Americans aren't prudes. HBO now has 27 million subscribers and is adding about one million per year. Yet its programming contains frontal nudity (male and female), graphic discussion of every kind of sex act you can imagine, and endless repetition of the "f" word and other profanity. Late in the evening, there's even a fair amount of soft-core porn. Nobody out in Dubuque seems to be batting an eye.
Cultivate your natural talent: The creative freedom HBO gives writers, actors, and directors is luring in big Hollywood names. Last year's Band of Brothers, a $120 million World War II drama produced by Steven Spielberg and Tom Hanks, is a good example.
It's the unknowns HBO bets on that make it distinctive, however. For instance Alan Ball, the creator of Six Feet Under, was hardly a household name before the show became a hit, even though he won an Oscar for writing the 1999 movie American Beauty. Ever hear of Sonja Sohn, Idris Elba, Dominic West, Wendell Pierce, Andre Royo, or Michael K. Williams? I hadn't either until I became a devoted fan of The Wire, the new HBO series about cops and drug dealers shot on location in Baltimore.
The powerful ensemble acting by relative unknowns makes the show work. Many of the actors got their first big break in Oz, HBO's gritty prison series, and then were given expanded roles in the new series.
PG version? Of course, HBO is a pay channel so subscribers who object to its graphic programming can always cancel. The networks, which are beamed into nearly every home and depend on nervous advertisers for their bread and butter, probably do have to be more mainstream. But I also suspect a lot of people (like me) watch HBO programs in spite of -- not because of -- the profanity, violence, and sexual content. (Oz, for one, is just too violent for me.) And my guess is that Bewkes and Albrecht could create a successful PG-rated version of HBO if they set their minds to it.
O.K., so those are HBO's secrets: Create a compelling and original product, respect the audience's intelligence, cultivate talented employees, and don't let market research overrule gut instincts. Adhering to these guidelines has brought HBO critical acclaim, another important element in successful programming.
HBO is now more profitable than any of the networks: Last year, it generated an enviable $725 million in operating income on revenues of $2.6 billion. When you look at the results, you have to wonder why more of the networks don't even try.
Peterson is a contributing editor at BusinessWeek Online. Follow his weekly Moveable Feast column, only on BusinessWeek Online Edited by Douglas Harbrecht
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Copyright 2002, Bloomberg L.P.
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