HBO’s CEO on Growth, Sexual Harassment, and Life After ‘Game of Thrones’
Richard Plepler, chairman and chief executive officer of HBO, was interviewed on Nov. 13 in New York by Bloomberg Businessweek Editor Megan Murphy. Following are excerpts from their discussion, which appear in the Nov. 27, 2017, edition of the magazine.
Megan Murphy: HBO is now entering, as you call it, a “golden age” for the brand. Describe what you’re doing.
Richard Plepler: Fortunately, we have a lot of momentum with talent. We have this embarrassment of riches where every Friday in our company we know of something exciting from the creative world that we didn’t know about on Monday. I sometimes say we’re a bit like a great art gallery, and we want the best artists to hang their work inside. If you want to use the art metaphor, you have the grandmasters, you have contemporary painters, you have emerging artists. We want all of those people to think of HBO first and to bring their great work inside the company.
When I was growing up, HBO was one of the few premium outlets where you could go to expect consistently high-quality programming. During the 25 years you’ve been there, and the last five years in particular, the marketplace has added Netflix, Hulu, Amazon, and other “over the top” providers. Are you concerned that you’re going to stop getting first dibs on certain projects?
First of all, I’ve never thought that this was a zero-sum game. I’ve never believed that because The Crown is a good show on Netflix, that somehow diminishes Westworld or Big Little Lies or True Detective. It doesn’t. It just means there’s an additive amount of quality out in the landscape. Our job is to play our game, continue to deliver on what we do.
I say, over and over again, our North Star is: Let’s make sure that we’re guaranteeing that the consumer is not only getting the best quality of content inside the HBO offer but that we’re making our product available whenever, however, and wherever our consumer, current and future, wants it. That’s why we built a multilateral distribution strategy, and that’s why we’re continuing to stick to the core values of the way we think about the creative process, which is coming in here and doing great work. The line at our door today in the fall of 2017, is longer than it was five years ago and much longer than it was 10 years ago. For us, the metric is quality, and if we adhere to that, talent recognizes it, and it becomes a virtuous cycle.
When you talk about HBO now, there’s two phrases that come up quite frequently: “multilateral distribution” and “traditional ecosystem.”
We are going to grow multilaterally—digitally and among our traditional partners. We looked at the market and realized we were totally underpenetrating both. We knew that the cord-cutter audience was growing. When we made the decision to build our standalone streaming service at the beginning of 2013, there were only probably 5 million broadband-only homes. When we stood on the stage in March 2015 in Cupertino [Calif.] to announce that HBO would stream exclusively on Apple, there were probably eight-and-a-half to 10 million. Today, it’s close to 20 million broadband-only households.
On the other hand, we also knew we were underpenetrated in our traditional ecosystem. So our job was to design deals that incentivized our traditional partners, because we saw a lot of growth in that market, and to make sure we provided an option to our consumers so that they could get HBO if they had a broadband-only service. Both.
We knew it wasn’t going to be cannibalistic. There are some people who prefer a traditional bundle—maybe it’s a skinnier bundle and doesn’t have 180 channels in it. But for HBO, skinnier bundles have been a good thing, because if you take the average price of a cable or a satellite or a telco subscription down from $100 to, say, $65 or $70, that means HBO—which has always been a la carte—is a much more digestible purchase. Skinny bundles allowed the cable, satellite, and telcos to package us more effectively.
Opportunistically for us, we’ve been able to parallel-process and to grow digital. One has not been at the expense of the other. As I like to say, nobody is doing us a favor when they sell HBO, whether it’s digitally or whether it’s in the traditional ecosystem. They’re selling HBO because it’s a great product and it helps make their bundles stickier—and because they know their consumers want it.
You just needed to explain what was inside the HBO package to what we called the undecided voter, the persuadable voter—because people didn’t know. You needed to explain to them that there’s a library of thousands of hours of programming. That we have four Hollywood movie studios in addition to our terrific original programming. And you needed to remind people that HBO GO meant that you could get HBO on whatever device you wanted.
As our partners began to market that more effectively and efficiently, we began to see tremendous subscriber growth. You saw our third-quarter numbers, which was 12 percent subscriber revenue growth. We’re on track to have our biggest year of subscription revenue growth in the history of the company, so I think we’ve been proven right.
So much of the media focuses on the original programming, Game of Thrones, the stuff that’s created exclusively, the stuff that wins awards. But the penetration numbers in terms of movies is still so high and so much of the driver. Are you surprised that some people don’t seem to be aware of the full package that HBO has?
If you look at viewership, 79 percent of consumers are watching movies on their linear channels; and somewhere around 72 percent across all platforms. Movies continue to be incredibly popular. Even people who have seen a movie in a theater are watching it a second time or even a third time on HBO. That’s a big additive piece of our offering. We’re starting to market our movie advantage more aggressively than we have in the past, just to remind the consumer how many great movies are on HBO in addition to the library. You can go back and watch The Wire. You can go back and watch Sopranos. You can go back and watch Sex and the City. If you missed Big Little Lies, go back and watch it. If you missed True Detective, go back and watch it. Catch up, get familiar with the product and the show. Come back to the next season or the next offering. On Demand is a tremendous advantage. It came to HBO first. All of our streaming services add to the beauty. For consumers, it’s a huge advantage for variable options.
Back in 2007, when you were named co-president in charge of programming, The Sopranos was ending, Sex and the City was gone, and people in Hollywood were saying that HBO was over.
There was some truth to it. I think we had become a little hubristic. We rode that Sopranos-Sex-and-the-City tiger, and we thought we had the secret sauce. And I think we lost a little bit of our insurgent voice, which we had brought to the dance for so many years.
The job of my colleagues and myself was to refocus on that insurgent voice, to trust the writers who were coming in with new ideas. I remember saying over and over again in 2007, “There’ll never be another Sopranos. What there’ll be is the next terrific show. And let’s just go back to our essence, which was trusting the voice of great artists and auteurs who have a vision for what they want that show to be.” And in came Alan Ball with True Blood, and Lena Dunham with Girls, and Armando Iannucci with Veep, and Mike Judge and Alec Berg with Silicon Valley. And these two guys, of course, who had never done television before, David Benioff and Dan Weiss, who had this idea to adapt George R.R. Martin’s books.
Time Warner CEO Jeff Bewkes has been a mentor of yours and a friend. How much did you learn from him?
Jeff had my job from 1995 all the way to 2002, and I had the privilege of working for him and next to him. He did a few things very well that I learned a lot from. One of them was, he was a great cheerleader, and I watched him pick up the phone over and over again and call different colleagues and say, “Well done, couldn’t have done that without your input.” Sometimes I would watch him do it, and I didn’t even know he had been aware that this particular individual had done what they did. But he made it his business to know that that was the case. When you create that kind of esprit de corps inside your company, it’s infectious, it’s invaluable, and he was terrific at that.
The other thing Jeff did is he made big bets. Remember, when we chose to do From the Earth to the Moon in 1996, it was an $80 million miniseries, and you know, telling the story of the Apollo space program, that wasn’t a given. But it brought Tom Hanks into the family, it created a certain idea that we would take on big, bold projects. That brought about Band of Brothers, where Tom and Steven Spielberg came in and we did this miniseries based on Stephen Ambrose’s book. Those were big bets. Band of Brothers did $120 million, unheard of at that time. It ended up creating tremendous brand elevation for HBO.
We’ve seen a wave of harassment claims across the media industry and politics involving people HBO has collaborated with, including Harvey Weinstein and Louis C.K. What’s been your reaction to it? What are you doing at HBO? Is this a game-changing moment for women in this industry?
If there’s a silver lining in any of this, it’s that it will be a demarcation point for zero tolerance for willful ignorance or turning a blind eye to questionable activities. That’s a good thing, because I think there was probably a lot of willful ignorance going on in different environments because a lot of people had commented on the behavior of some of the people who you named for a long time, and people just didn’t look too closely. That ended with all the revelations about Harvey Weinstein. I’m proud to say that under my tenure, my predecessor Bill Nelson’s tenure, it’s been zero tolerance, nothing but zero tolerance.
Have you been surprised by just how powerful some of these women were that kept these stories secret for so long?
Two things have surprised me. The horrific extent of some of the behavior; and that people felt so intimidated and fearful that even women in positions of power, who were successful by any metric, felt compunction about raising their voices. They deserve an enormous collective thanks for being brave enough to come forward. It’s changed the landscape forever.
How do issues such as the partisan divide and disenfranchisement inform choices HBO makes over content and the diversity of voices out there?
I worked for Chris Dodd when he was senator from Connecticut. He used to tell a fantastic story. After Franklin Roosevelt died, people were watching the funeral train go by. One person was crying. Another asked, “Did you know the president?” The answer: “No, but he knew me.”
Chris always thought about that line as the core value of what it meant to be a United States senator. Do your constituents feel that you know them? And that really translates to, do you see them? Are you listening? Those of us who are privileged to have a small role in popular culture have an opportunity to tell stories that can help people see what different lives look like. Still be entertaining, still be engaged. It doesn’t need to be didactic, but you can do something that opens up people’s eyes.
Take a show like Insecure, Issa Rae’s wonderful show about growing up African American in Los Angeles. She is opening a world up to people who probably had no idea what it felt like to be in that demographic at this moment in history. She’s telling a story. That’s very important. Sonja Sohn just did this wonderful documentary for us called Baltimore Rising about the city’s extraordinary resilience and grit in making its way back after the Freddie Gray murder. You see the dignity of the city in all its dimensions as citizens try to find their voice and their equilibrium again.
Those are things that we value. Look, we’re not here to educate. We’re here to entertain, and we are, first and foremost, an entertainment network. But in doing so, you can occasionally do something that is illuminating at the same time that it’s entertaining. Because we have such a broad canvas to paint on, we have an opportunity to do that.
The president is frequently described as entertaining. Is he illuminating? In your opinion, is he part of the problem in terms of the culture of divisiveness?
David Brooks wrote a wonderful column a while ago. He said that there are three different reflexive go-to places in American history. One is religious. One is tribal. And one is ideals. He argued, Isn’t it much better when we go to our ideals? This isn’t about whether we should support tax reform. This isn’t about where do you stand on [Trans-Pacific Partnership]. This isn’t about whether we are handling the Iraq situation with the right level of judgment. That’s not what this conversation’s about. This conversation is about making sure we don’t turn into a tribal country where we demonize people who disagree with us and we turn complicated subjects into Manichean ones, where there’s good and evil and you’re on one side or the other. When you work through difficult problems, there are no easy solutions. Real, quality decision-making requires a little bit of compromise, and it requires your ability to be in the other person’s shoes. Wherever you are on the political spectrum, go to the best ideals of what the Constitution and the Bill of Rights emphasize about the core values of the country.
You probably hate it when people ask what you and HBO are going to do now that Game of Thrones is coming to an end.
I don’t hate the question at all because what I said earlier has the virtue of truth, which is, the line at our door is huge. Whether it’s five prequel ideas from different artists on Thrones. Whether it’s Succession, Jesse Armstrong’s fantastic show about the media business. Or the next season of True Detective, the next season of Big Little Lies, whether it’s Lovecraft Country, Misha Green’s extraordinary script, which is a kind of horror genre film set in the 1950s, or Watchmen, Damon Lindelof’s new idea loosely based on the movie but with Damon’s extraordinary take. I’m not concerned about it at all, because the enormity of talent that wants to work at HBO is larger today than ever. So the thing that’s so exciting, if you’re in our chairs, is that you see that line forming. That’s what gives us the confidence to know that the next great show and the next great idea is waiting out there.
Our job is to make sure we pick right and choose right and work with the right people, but that’s actually a high-class problem because of the talent that we have who are excited about being part of the network.