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How HBO’s creatives survived corporate chaos

Authors Felix Gillette and John Koblin explain how your favorite shows kept HBO afloat.

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Felix Gillette and John Koblin look at the camera.
Photo by Carter Mathisen; Photo illustration by Will Joel / The Verge

HBO started as an experiment. It was a way to get people to switch from getting TV over broadcast antennas to cable by offering events you’d otherwise need tickets to see: sports, plays, movies. That’s where the name Home Box Office comes from.

But it grew from there in surprising ways: HBO was a major innovator in satellite distribution, in working with cable operators around the country, and of course in programming. The company’s taste and style have influenced and shaped culture for a generation now. And importantly, HBO did it without any real data: the cable companies owned all the subscribers, so HBO made decisions through instinct and experience.

The amazing thing about HBO is that it has stayed true to itself through an absolutely tumultuous set of ownership changes and strategy shifts. If you’re a Decoder listener, you know about the chaos of AT&T and HBO Max and the sale to Discovery to create Warner Bros. Discovery, but it’s so much twistier than that.

I talked through all of those twists with Felix Gillette and John Koblin, authors of the terrific book It’s Not TV: The Spectacular Rise, Revolution, and Future of HBO. Felix and John also peeled back the curtain on your favorite HBO shows, from Sex and the City to Game of Thrones.

Before we get into the episode, I have to do our usual set of disclosures: I’m a Netflix executive producer. We made a Netflix show called The Future Of. You should watch it. I’m hopelessly biased in favor of the show we made. Also, Vox Media has a minority investment from Comcast. They don’t like me very much. And I worked at AOL Time Warner. I quit to start The Verge

Okay, that’s that. Let’s get into the interview — it’s a good one.

Felix Gillette, you are an editor and writer at Bloomberg News.

FG: That’s correct.

And John Koblin, you are a reporter at The New York Times.

JK: Hi.

Collectively, you are authors of It’s Not TV: The Spectacular Rise, Revolution, and Future of HBO. Welcome to Decoder.

JK: Thanks for having us.

I am really excited about this episode. I loved the book. I am completely obsessed with whatever is happening with Time Warner, the company that gets passed around from company to company over time. It seems like if you buy Time Warner, you’re doomed. Something very bad has gone on. But HBO is this shining jewel that seems to persist regardless of that noise. I think that’s a really interesting thing to unpack, and the book does a really good job of that, so thanks for coming on. I also want to commend you. Bloomberg and the Times are pretty fierce rivals, yet you came together to write a book.

FG: Well, we’re long-time buddies. It did take a little smoothing over, but it worked out well in the end.

We’re doing a media episode of the show, but there’s also a media subplot here, which is that you guys had to smooth that over. It’s good. 

Let’s start with the beginning of HBO. I think most people listening to Decoder think of HBO as a legacy brand, as this thing that gets passed around that has to make the shift to streaming in the context of Netflix and all this other stuff. It’s actually a much more interesting story. It basically started out as a value-add to a local cable system in New York. Take us through the genesis of HBO.

FG: In the early days, it was basically Charles Dolan, who went on to Cablevision fame and owning the New York Knicks and the New York Rangers. It was Dolan’s idea originally. He got backing from Time Life, which at that point was a magazine empire that was attempting to diversify. Dolan’s idea was basically like, “I’m trying to build out the first cable system in lower Manhattan.” 

There were neighborhoods in New York that just couldn’t get good broadcast television coverage because the buildings would block the signals. They were like, “Oh, we’re going to build cable in the city,” but it was a huge mess. It was struggling and losing a lot of money. 

While on vacation in France, he thought, “What’s a way to entice people to actually pay for TV when most people are already getting it for free?” He thought that maybe people would pay if they started a channel where you could get Hollywood movies and some sports from Madison Square Garden. That was its humble origin, and it really did not work for many, many years. It almost died immediately, so it’s kind of incredible it survived.

What’s the turn that made it work in those early cable days?

JK: I mean, as Felix put it before, it was a novel concept to pay for a TV network. Even going back to the days of radio, you expected that to come into your home for free. HBO decided, “All right, let’s just look at that name: Home Box Office. Let us offer something where a viewer or a subscriber will get access to something they can’t get at home,” whether that’s a ticket to a movie that was in theaters just a few months earlier, a boxing match, a concert, or a standup special. 

HBO started programming that content really aggressively in the late 1970s and into the mid-1980s. That included making their own original movies as well. That’s sort of the thing that really started to turn HBO into a viable business by that point.

FG: It also couldn’t have happened without this big technological leap forward, which I thought was really interesting and didn’t know about before we started working on this book. Originally, for the first couple years after they launched HBO, there was really no way to distribute it. Only with the advent of satellite-distributed channels did that happen, and HBO was the first cable channel that made the leap onto satellite. Without that, it never would have been able to reach subscribers across the country. That happened in the mid-1970s, when HBO was about to be put down to death because it just wasn’t going anywhere.

At that point, Time Life made one last investment and said, “You know what? Okay. We’re going to rent some space on this new RCA satellite that, in theory, could beam moving pictures to anybody around the country that puts up a little satellite dish.” They tested it with the “Thrilla in Manila” boxing match in the Philippines, and it ended up being this great success. They could, in fact, distribute it around the country. 

“Once they made that leap onto satellite, everyone else followed.”

Once they made that leap onto the satellite, everyone else followed. That was really the advent of all of these other cable channels that we’re all so familiar with, like MTV, BET, and Comedy Central. They all followed HBO’s lead to go onto satellite.

I actually thought that was an utterly fascinating component of the book. A theme that comes up on Decoder over and over again is how your distribution affects what you make. The content is always inevitably and completely shaped by its distribution method. What’s really interesting about that to me is that in the internet age, we think about distribution as being pretty direct, right? There’s a creator, there’s a viewer, and there’s the YouTube algorithm that will shape what you make because that’s the distribution. At the end of the day, there’s a pretty direct relationship there.

That’s not what you’re describing with HBO on satellite; it’s not a DirecTV consumer satellite system. They’re wholesaling out to other cable networks, who are effectively their customers, who then retail it out to their cable subscribers. They had to invent this whole system and put up these huge satellite dishes. This is a business that didn’t exist, but HBO manages to create it. How did they get through that? That’s a business model innovation and a very serious technical innovation. It seems like they lost the ability to do that later on. I’m curious, where did that culture come from at HBO in the beginning?

FG: I think they made a really smart decision early on. They decided, “If we’re going to charge people, say, $10 a month to get this channel of Hollywood movies in their home, we’re going to split that 50 / 50 with the cable operator. For anyone that is incentivized to go out and invest $100,000 or whatever to buy a big satellite receiver and then wire it into people’s homes, here’s something else you can offer them besides what you’re just going to see on broadcast television. Here’s a channel of Hollywood movies.” It was something else they could sell customers to get them into the cable ecosystem when it was really a new concept to pay for TV, and they would get to keep half the money. 

That really made HBO into something that these nascent cable operators wanted to sell to their customers. It also created this interesting dynamic that played out for the next several decades, where HBO was removed from the customer. They were a wholesaler, and they never had a direct relationship with the customers. That was good and bad in many ways and really shaped the network’s history all throughout and up to the day when the streaming era was born. We saw that play out in several other interesting ways.

“They didn’t really know much about their subscribers, so HBO’s executives basically just had to wing it.”

JK: The good of it is, they didn’t really know much about their subscribers, so HBO’s executives basically just had to wing it. They had to decide, “Okay, here’s what we think is good. We think they want this George Carlin special, we think they want to see Robin Williams, and we think they want this movie about the Exxon Valdez disaster.” By trusting on their own core instincts, it really helped influence HBO’s programming efforts throughout the 1980s.

I think this is a good time to bring up Netflix. I don’t want to start talking about HBO versus Netflix quite yet, but what you’re describing is a culture of creativity, of unbound artistic, subjective decision-making. Netflix is a totally data-driven organization. The HBO culture came up in a very different way. With Netflix, you get three episodes, they look at the streaming numbers, and then they cancel your second season before you even started. HBO is saying, “Here’s a group of executives. We trust them to make cultural decisions.”

FG: I think when we got into the book, even really from the beginning, we realized that this would be an amazing opportunity not just to contrast these two different companies as a New York-based company versus a California-based company and the cable and satellite era versus the streaming era, but also to do exactly what you mentioned. A company like Netflix, from its very origin, was so direct-to-consumer and really using the internet to figure out the data and patterns. 

Even before streaming happened, when they were just mailing out the DVDs to you by mail, they were looking at all the choices that you made through their website. What did you want to watch? What time of year was it? All those patterns were guiding them. It was such an incredible contrast to HBO, which never had any data on customers, could never rely on anything, and had to come up with some other way of figuring out what it was that people would watch — and they did. Over the course of several decades, they created this very instinctive way of trusting artists and not really worrying at all about data and signals in the marketplace. I thought this part of the book was so much fun, contrasting those two different methods, those two different institutions, and the strengths and weaknesses of both models.

That piece of the puzzle, where their customers are the cable networks, creates a lot of opportunities. HBO gets really good at selling to those networks, and those networks get really good at selling to the customers. But it also creates this blind spot, where HBO doesn’t really know its viewers. It also creates another pretty major blind spot, which is that there were just a lot of boobs on HBO at the beginning, because they thought only men were going to buy cable. 

It seems like that has maybe diminished now, but it’s just a part of HBO’s culture. I actually want to start at the beginning and trace it back to that lack of data, which created some enduring cultural opportunities for HBO and its creative culture, but it also created this pretty massive blind spot.

FG: Yeah, in the beginning, they were trying to figure out the format and the mix. “What is it we’re going to put on the air in addition to Hollywood movies?” One of the early executives was this guy named Michael Fuchs, who was the head of programming in the early days and became the CEO of HBO. He had this idea — and again, this wasn’t really based on data, it was just his own reading of the landscape — that the broadcast networks were very focused on female viewers. His idea was, “Well, they are ad-supported, and commercial sponsors want to reach women in their households. They want to sell them household goods. So if you look across the whole landscape, it’s slightly skewed towards female viewers.” 

Because the broadcast networks were so powerful — this was during the era of ABC, CBS, NBC — they had to figure out, “Well, what can we do differently?” I mean, the whole idea of HBO was basically counter-programming against the networks. One idea was, “Okay, if they’re skewing the programming towards women, then we’re going to focus on men and do things that will attract male viewers.” 

That idea was very explicit at the beginning. HBO’s original programming mix included things like late-night documentaries that had tons of sex in them — Real Sex was the franchise eventually — and boxing, which the broadcast networks were growing wary of because of the violence. And yeah, it involved a lot of female nudity. 

In those early days, there was a code word inside of HBO for, essentially, more female nudity: ‘cable edge’

In those early days, there was a code word inside of HBO for, essentially, more female nudity. These writers and producers of shows would get a script back and say, “Yeah, it’s a great script and we really like it, but could it include a little more ‘cable edge’?” That was the code word. The idea was that they were pandering to male viewers, and they could include things that you couldn’t see on broadcast television, like nudity, bad language, violence. HBO’s early original programming was just littered with that stuff. It turns out that alone wasn’t really enough to create great programming.

The book is very much structured era by era of HBO, and every era of HBO has its set of signature shows. One era that I think breaks away from this legacy of very male HBO is the Sex and the City era, when that was HBO’s dominant product. How did they make the turn from, “All right, we need more ‘cable edge’ to attract male heads of household to buy this product,” to, “Actually, what we are known for is Carrie Bradshaw”?

JK: In the spirit of winging it, it was basically an accident. In the mid-1990s, Demi Moore was at the height of her celebrity, and she wanted to produce a movie about abortion. It was called If These Walls Could Talk, and it was going to be unflinchingly pro-choice and it was going to examine abortion through three different periods of American history: the 1950s, the 1970s, and the then-present day of the mid-1990s. 

She had originally made the deal to do the TV movie with TNT, and TNT got skittish just as they were about to begin production. They were like, “Ugh, our advertisers might not like this pro-choice abortion movie.” Again, it was the mid-1990s. It was the height of the culture wars at that point and abortion was a red-hot topic.

Once HBO heard this, they swooped in and they said, “We’ll make it.” They did not think that their mostly male viewers were going to stampede to come and watch a movie about abortion. They wanted Demi Moore on their airwaves. And the cast also included Sissy Spacek and Cher, so this was just like a win-win. “Why not? Let’s do it.” Then it aired and the ratings came in the next day, and they were the highest ratings HBO had ever seen for an original production. 

HBO executives were floored. They were like, “Wait, are there female viewers out there who are watching HBO and want to watch a show or movie about the female experience? What is out there right now?” What was out there was Darren Star, a former top producer on Beverly Hills, 90210 and Melrose Place. He was shopping a project with Candace Bushnell, who was adapting her book from a series of columns that she wrote for the New York Observer, called “Sex and the City.” Within 10 weeks of If These Walls Could Talk debuting, HBO made a deal to do Sex and the City.

This is another theme that comes up on Decoder all the time, which is that data can only tell you about the past. The data that HBO had would’ve never told them that these things would be successful in the future. How did that culture change around the sudden influx of data, both from Nielsen ratings and from the internet? Did anything happen inside of HBO to make it more expansive?

FG: Yeah, there was the issue of data and how it was going to be used. I think one way it changed HBO a lot was actually through a misunderstanding. In 2000, when the internet was taking off, AOL came in and acquired Time Warner. It was a famously disastrous merger of cultures, and at the time, it was the biggest merger in American business history. Part of what was driving that, weirdly, was AOL wanting more information on customers themselves.

In the book, we talk about how it took a long time for the merger to go through regulatory issues. When it was finally consummated and the AOL managers were showing up, we tell the funny story of the first time they arrived at HBO’s sales and marketing offices. They came in and they were very excited. “We love HBO. It’s an incredible brand. It has all these customers that love it. So the first thing we want to know is if you can just give us all your customer data?” 

Everyone was looking around this conference room nervously like, “Customer data? What are these guys talking about? You just paid $100 billion. I hate to break it to you, but we don’t have that information. It’s the cable operators who have that.” That was one of the fundamental misunderstandings: that somehow there would be this synergy — that you could use HBO’s knowledge of what customers wanted with the internet, and that was going to turn into this incredible vortex of new synergy in this new world of the internet and entertainment.

I’m sorry, “vortex of synergy” is actually a great phrase. It’s perfectly accurate to what happens.

FG: The whole thing was just such a mess, and it obviously didn’t work out. That story has been told a lot of times, and we tell it through the HBO lens. It left this incredible hangover within Time Warner. I think that’s one thing that became apparent in our book, and it was really interesting to me. I had no idea beforehand. 

It was just a disastrous experience for all of these television executives within Time Warner, at HBO, and for all these cable brands that had to deal with these AOL managers. They had this famous culture clash. Eventually, the stock price craters and everyone gets tossed out. They say, “Okay, the AOL guys didn’t know what they were doing. It was a total mess, so we’re going to go back to letting the TV people run this company.”

That was great, except it left them with this incredible distaste for the idea that people from the internet knew what the hell they were talking about. The problem with, “Oh, the internet is full of phonies and doesn’t matter,” was that it was really not a great lesson to be learning for a huge media company in the 2000s. 

With each passing year, the internet was becoming more important and the technology was getting better in streaming. Time Warner, I think in many ways, got left behind because of that. We call it internet PTSD in the book. It was like that experience with AOL was so bad that they just rejected anything in the coming years that said, “Oh, maybe you should be investing in streaming technology, data acquisition, and in understanding what new modes of distribution are coming down the pipeline, because at some point it is going to happen.” That was a really fascinating dynamic to watch play out.

This brings us to Netflix and that PTSD hangover about the internet where the distribution was changing. Netflix was the classic disruptor there, right? They were mailing DVDs to people, and then they were starting their streaming service, which wasn’t very good. It really had no original shows and no movies, but everybody looked at it and said, “Okay, that is going to happen. This is going to get better.” HBO looked at it and said, “No, we’re good,” for quite some time. But Netflix was cheaper and more convenient. This is just a very classic disruption tale. What happened there?

FG: Well, even before Netflix launched the streaming service in 2007, there was this incredible moment in like 2005, where there was a group of HBO business development executives on the West Coast watching Netflix. This is the era where Netflix was really locked in this battle with Blockbuster. 

Many people have forgotten this particular era, but Blockbuster, in addition to ruling the home video market, saw Netflix coming up. At one point, they basically launched their own Netflix rival service, where you could go to Blockbuster and get DVDs sent to you via mail. They priced that lower than Netflix, and people were like, “Oh, is Netflix on the ropes?”

The HBO executives were watching all of this. They thought, “You know what? That little company in California, they’re pretty good with customers. They have a really good direct relationship with customers. Why don’t we buy them? They have the thing we don’t have. We have this huge wholesale distribution model through the cable operators, but if we bought Netflix, we would have this direct relationship with the customers. We would control another window for movies, and it would be a great combination of services.”

In 2006, HBO execs put together a 35-page proposal for their bosses: “Here are all the reasons we should buy Netflix.”

So in 2006, they put together this 35-page proposal, and they went out to meet with their bosses in New York and said, “Here are all the reasons we should buy Netflix.” They basically couldn’t even get through the presentation before their bosses said, “Are you kidding me? Netflix? What is this thing? It’s worth $1.5 billion? That’s crazy! It’s not worth that. We’ve seen this with AOL. This thing is going away. Get out of here. Just throw that thing away.” It was really this remarkable missed opportunity. 

It’s fun to think of the counterfactual history of what the streaming wars might have been like if Time Warner had acquired Netflix. Which again, was worth about $1.4 billion market cap at the time they wrote this proposal. AOL Time Warner had a fund that easily could have paid for that. Of course, if they had acquired it, they probably would have screwed it up. It wouldn’t have been great. 

That’s kind of the classic innovator’s dilemma. They were so wedded to this model of the cable satellite and they were making so much money. In truth, I think Comcast at that point was a quarter of their business, billions of dollars of revenue every year. They worried, “If we even make a little move towards going direct-to-consumer and cut out the middlemen, cut out the cable operators like Comcast, they’re going to be pissed. They could just shut down their marketing of HBO. Our churn rate would go up immediately and we would start to lose customers. It’s not worth the risk, so let’s not even entertain that idea.” 

So it is, again, an amazing classic innovator’s dilemma of this company being wedded to the previous technology and not being able to take advantage of these opportunities that people inside the company sought. It was not surprising. They really did see the opportunity early on.

Again and again, it really just comes back to how much power your distributors have over you in the WarnerMedia story. HBO can’t really do HBO Go because Comcast is going to get mad. Later on, Jason Kilar is going to try to go direct-to-consumer on HBO Max, and all the movie theaters and Hollywood get mad. That’s his distribution, the money that everyone has raced to accept. HBO is always in the middle of that. When it’s making shows, how is it attracting all of this talent over and over again, even as it’s always at war with its distribution or always trying to move on to the next kind of distribution?

JK: If you’re a top producer or a top writer in Hollywood, you’re not paying so much attention to the distribution challenges. You’re paying attention to the executives who you’ve known for years. HBO has always really prided itself on cultivating a great writer or a great producer and having them come back again and again. 

Use Mike White as an example. He had a show on HBO that was a cult classic 10 years ago. They canceled it because it wasn’t watched, but they always checked in with him. “What are you working on? What are you thinking about?” By the time COVID-19 hit, HBO was like, “Okay, productions everywhere are completely ruined. We need a show that can be done quick, cheap, and preferably over Zoom so that we can get it on the air in four or five months.”

They went to Mike White saying, “Do you have a Zoom show?” Mike White said, “Let me think about it.” Then he was just like, “I am not doing a Zoom show because that sounds so depressing. What’s also depressing is sitting at home watching CNN all day, with terrible headlines about the pandemic. Maybe I can come up with an idea for a show where there could be a COVID-19 bubble.” That’s when he suddenly thought, “Let’s do a show at a hotel in Hawaii.” 

The reason HBO went to Mike White is because they knew he’s a quick writer, he could work cheap, and he would come up with something. All of a sudden, out of nowhere, HBO has The White Lotus. It was because of the executives’ relationship with the talent, and vice versa, the talent relationship with the executives. Mike White told us for the book that he had had meetings with Netflix over the years, and he was just like, “What is this? This is just way too weird. I want my regular HBO people.” One of the producers we quote in the book said that is the reason why HBO “always has been a cut above.”

That relationship and that dynamic is classic Hollywood. It’s totally relationships-based. No one ever says no to anything, and the door is always open for the next thing. It’s weird because HBO is famously in New York, and then they move. In the early, pre-internet days, those location differences seemed to shape the culture more than you would think.

JK: Yeah, HBO has a New York presence, much more so than any other rival studio or network, but HBO’s programming team is located in Los Angeles. The New York operation, where that was best deployed, didn’t have to pay attention to the Hollywood trades. All the top executives are in New York, particularly Richard Plepler, who had grown up as this real East Coast guy, worked in the US Senate for a few years. Before he came to HBO, he also worked on publications like The Atlantic as a PR person. He wanted to cultivate relationships with the New York press corps and the Washington press corps.

That elevated HBO throughout the 1990s, throughout the 2000s and the 2010s. Felix and I used to joke about this. Any time we went to an HBO premiere party five or six years ago, I would see no fewer than 25 reporters and editors from The New York Times, 23 or 24 of whom did not cover television and did not cover culture. They were just there because they were invited, because maybe there will be a time when Maureen Dowd wants to dedicate a Sunday column to a new HBO original series or a new HBO original movie. It was sort of this bicoastal element that HBO had to it, where you had this amazing programming team in LA, and you had these incredible communications officials and marketing people in New York that really helped bring HBO to another level.

The core of that — and this is really what I think of as the Plepler era — is that HBO is a hits business. There’s no brand there, really. It just stands for, “There’s going to be another incredible show that will last for however many seasons. When that’s over, we’ll just roll you into the next thing.” But there’s no formula or system to make that next thing. They’re just taking these shots. I’ve watched Richard Plepler hold court in New York City before. It feels like he positioned himself as the ringleader of this fantastical army of creatives that would just do this over and over again. Was there a system, or was it pure chaos and they just got lucky over and over again?

FG: I think with the system that they came up with, you really have to go back to the most pivotal change in HBO’s history, which took place in the mid-‘90s. HBO stood for Home Box Office, and the original idea was like, “Anything that you would have to buy a ticket for in the real world, we’ll show you at home.” So initially it was sporting events like boxing, Hollywood movies, music concerts, and comedy performances. They didn’t make much classic TV in the early days because they were thinking, “Well, the TV networks give it away for free. That’s not our thing. We’re giving you something in your house that you would have to buy otherwise.”

In the mid-’90s, they finally decided, “Okay, we’ve taken this about as far as it can go. We really want people coming back week after week. We need to start doing episodic television in a really serious way.” When they did that and made that decision, they had to think, “Okay. Well, how can we do episodic television or serialized shows that are different from what’s on broadcast networks?” 

I think the most pivotal decision they made in their history was the formula HBO came up with. Before, they’d give them things like female nudity, bad language, and violence that you couldn’t see on TV, but that wasn’t enough to make these shows really, really great. What they came up with over time was, “Well, we can’t offer these seasoned TV show writers and creators as much money as broadcast television, but we can offer them a level of creative freedom that they could never have on broadcast television.”

“All the rules that you’ve always butted your head up against in broadcast television, you can toss those out and do whatever you want on HBO’s air.”

Their pitch in the early days was like, “Okay, bring your show to HBO. You’re not going to have a bunch of commercial sponsors looking over your shoulders. You’re not going to have a ton of network executives telling you to make all the characters more likable and make the subtext more obvious. All the rules that you’ve always butted your head up against in broadcast television, you can toss those out and do whatever you want on HBO’s air.” 

People that had spent their careers making shows on broadcast television, like Darren Star, whom John mentioned earlier, were so sick of the rules of broadcast television and these fights with the network executives like, “Can we do an episode about teenage pregnancy? Well, can we do one about abortion?” “No, it’s too controversial.” The appeal of coming over to HBO and making a show where you didn’t have all of those restrictions was incredibly appealing.

When Darren started Sex and the City, he didn’t think it was going to be any kind of commercial success. He was basically thinking of it as an independent film project, but it ended up being incredibly powerful. From the time that they decided they were going to take off the guardrails and that was going to be their sales pitch and their formula for these Hollywood creators, they had this incredible run. I mean, it was Sex and the City, Oz, The Sopranos, Six Feet Under, The Wire. If you look at all of those shows, what do they all have in common? They all had these really seasoned veteran creators who had come from that broadcast television world, who spent decades learning those rules and then came over to HBO to break them. 

In some ways, I think that still is really the HBO method. “We’ll give you the creative license, we’ll give you the creative freedom, we’ll give you the money to make your project, and we’ll leave you alone.” That’s incredibly powerful, weirdly.

We have been talking about Netflix as the competitor, and I think that makes a lot of sense. People understand it. There is this other period, though. I don’t know if you want to say it’s where Peak TV began, but where HBO’s competitors were other cable networks that were basically making the same pitch. So you end up with Mad Men or Breaking Bad on AMC, and you end up with Billions having an incredible run over on Showtime. How does HBO feel about those competitors, and do they have the same kind of challenges as HBO? It seems like the Showtimes and the AMCs shaped HBO much more than Netflix, and now we’re in the Netflix versus HBO era.

JK: I mean, I think you could actually trace the origins of Peak TV to 2010. That’s when you already see the body count of these climbing scripted adult television series rising and rising each year. But 2010 is when Netflix was still just licensing other people’s content, but everybody was showing a willingness to license them. Disney was giving them ABC’s Lost. Mad Men was beginning to show up on Netflix. And Netflix really desired the pooh-bah, the top game in town. They wanted HBO’s content. 

They knew asking for The Sopranos or Sex and the City would probably be a hard ask, so they went lower. Netflix’s Ted Sarandos, then the chief content officer, said, “What about Mr. Show? What about Six Feet Under? What about Deadwood?” He made a huge offer, like a ton of money, which was not only supposed to get HBO sweating, but also get Alan Ball’s agents — Alan is the creator of Six Feet Under — into fits saying, “You have to make this deal,” but HBO refused. 

HBO saw Netflix as a rival even then, so they wouldn’t give them their content to put on their nascent streaming service. They didn’t want that HBO logo on it. And that is right around the time when Netflix was like, “Oh, so if HBO’s not going to sell us this stuff, when are the other traditional Hollywood studios going to wise up and realize they shouldn’t be selling us their stuff? That’s not going to be good, because then we’re going to have nothing. We’re going to have to go out and start making our own stuff.” 

It was a few weeks later that they had the deal to make House of Cards, which stunned Hollywood. So simultaneous to that, yes, you have FX, you have Showtime, you have AMC. You have other networks that are doing the HBO thing: gritty antiheroes, subversive TV. 

It was a tough transition for HBO. For 15 years, they realized they were the only game in town. Then all of a sudden, if it’s HBO versus somebody else, they’re not going to choose HBO. They’re going to choose FX or AMC. It was a difficult transition, but look where we are 10 years later. 

Just in the last few weeks, AMC has basically conceded that they have to cut back their original programming ambitions. They’re laying off a lot of people. Very recently, Showtime, at 47 years old, is no longer Showtime. It is now Paramount Plus with Showtime. That is a diminishment of a fabled brand that is stunning. When you have that in the context of HBO currently broadcasting The Last of Us, a huge hit, on the heels of The White Lotus, a huge hit, on the heels of House of the Dragon, a huge hit, it’s really stunning to see what has become of HBO’s rivals of just a decade ago. They’re starting to disappear.

All right, let me make the counterargument to what I almost always say. I can’t believe I’m going to say this. Maybe all the mergers were good? Is that the lesson here? I don’t know if I believe that. I feel like I have to say it just to make the middle of the podcast really exciting. These other rivals did not get swept up. They were not the crown jewels of these gigantic media mergers that basically killed the host and then had to move on. They tried to be independent businesses. 

I’m looking at HBO versus Showtime versus FX versus whatever, and they have the same business model. Netflix comes so that the game is fixed. You’re kind of playing on the same board. Netflix comes in with a bunch of VC money, a totally different business model, and no cable systems to make happy. They flip the board, everything gets radically more expensive because Netflix will just shovel money at people, and only HBO emerges from that — I would not say victorious, but intact.

FG: I think for all the crazy culture clash that happened when AT&T acquired Time Warner and all the bludgeoning that went on inside that company, the one thing that did come out of that, that they needed to do for a long time, was that they broke down all those barriers between the different brands within Time Warner. They got all the programming in one place, and they did create a streaming service, that for all its glitches in the early days and for all its problems, has an enormous library and the scale that can compete with Netflix and Disney — at least in the United States. Overseas, I think, is another matter.

If you didn’t become part of a huge platform, then I think you really are left out. Probably the best example of that now is AMC Networks, which for a while there with Mad Men, The Walking Dead, and Breaking Bad, really had this moment where it was like, “Oh, they’re on the same footing as HBO, FX, and these other channels in the cable world.” But they never made the transition to a big streaming service. So like John said, now they’re withering on the vine. 

For all the negatives that we could go through that happened with HBO under AT&T, the positive is that there is a big giant streaming service called HBO Max, and you can get the entire library of HBO’s history now more or less streaming in your home.

JK: Can I push back on both of you?

Yes. I can’t believe we’re going into the AT&T deal on a positive note. Please push back.

JK: By the skin of their teeth, HBO is still going and doing what HBO did. By the skin of their teeth. If HBO had not been on the roll that it has been on for the last three or four years, in terms of programming… Every network usually goes into some sort of swoon. HBO did it around eight, nine, 10 years ago. Around the time FX and AMC were running hot, HBO ran a little cold, especially when it came to dramas. Now HBO has been running hot left and right. Had they not, it would’ve been a lot easier for AT&T to say, “Just give us more Game of Thrones or give us a Sopranos series.” They could be mining HBO for IP the way so many other media companies are doing. They could have mucked with HBO’s business.

It is because HBO’s programming team has delivered such outstanding results that I think that they have been left alone. David Zaslav is not immune to this either. If HBO was in a slump and he hadn’t given a five-year deal to Casey Bloys — HBO’s chief content officer currently, and for the last seven years — HBO’s programming, the surprise hits that just keep coming around the corner, might not exist. It really is the original programming executives at HBO. They are the people who are keeping this going and if they disappear, HBO’s in a world of trouble.

It’s hard to measure a thing that you can’t take away. If not for the pressure and the sense of existential dread like, “If we don’t hit another home run, this whole thing comes crashing down,” do you think they would perform at that level? You can never really tell, right?

FG: It’s hard to say, but it is interesting that throughout HBO’s entire history, the one constant has always been some threat of looming disaster hanging over their heads. I mean, it really is. In the 1980s, the first thing was the Hollywood studios all teaming up and saying, “Why are we letting this middleman creator take all this value out of our ecosystem? We’ll just create our own HBO service. We’ll call it Premiere, we’ll all feed it our movies, and HBO will die.” Luckily for HBO, the Department of Justice intervened and said there were antitrust issues, so they shot it down.

Can you imagine such a thing happening in 2023?

FG: Then the VCR came along and people were like, “Why would you go to HBO to watch a home movie? Now you can just go to the Blockbuster video and get something.” That was a huge threat that people thought was going to kill HBO. The Time Warner-AOL deal, which we already mentioned, people thought was going to kill it. The advent of streaming was going to kill it. AT&T was going to kill it. The latest is the cost of Wall Street losing their faith in streaming services is going to kill it. The whole time, the threat of death has been hanging over it. I think maybe that is part of the key to success, you have to be worried that you’re going to die.

I feel like you could reframe this entire book as an ‘80s movie about a hockey team that has to save their local hockey building. 

So I covered AT&T from the tech perspective. I’m a tech reporter. This was stupid on its face. Only the people inside of AT&T thought they were making a good decision. I think even Time Warner’s management was like, “I cannot believe we hoodwinked AT&T into buying this company.” 

When you boiled the pitch all the way down to the bottom — and when I read the arguments they made in the antitrust case filed by the Trump administration — it was just, “We sell a lot of mid-range Android phones. We’re going to preload them with a CNN icon and some Game of Thrones clips, and that will keep people from switching to Verizon.” 

It’s like, “Your idea is garbage.” First of all, your customers with money buy iPhones, and Apple is not going to let you do this. The people who buy Android phones also hate this shit and they will just delete it. There was no other rationale that I could tell. It was, “We’re going to merge the pipes and the content, and that will keep you from going to our competitor.”

FG: I think the only other rationale — which in retrospect was almost as dumb — was this idea that their stock price was going to get a nice bump out of it. I think they looked at Netflix and thought, “Wow, look. Wall Street loves streaming. Wall Street loves data. We’re going to buy this thing, throw it up there, and it’ll juice our stock price.” That obviously did not happen, and I think that contributed to the realization after a couple of years that, “Whoops, we really bought this thing at the very, very peak of the market and overpaid for it. Now we have to get it off our books somehow.”

So they offloaded it to Zaslav and it became Warner Bros. Discovery. Right after AT&T bought it and was trying to integrate it, there was this famous town hall meeting between AT&T CEO John Stanke and HBO CEO Richard Plepler, which was leaked immediately. Plepler looked like he just wanted to run off the stage, because he was like, “You have to increase the volume of HBO.” He was openly threatening the creative culture. 

Why didn’t that have any ripple effects? AT&T showed up, and it was like, “All right. We’re going to do mini Game of Thrones on Android phones,” and it just never happened. HBO just rejected the host. How did that happen? You would expect AT&T to kill this thing a lot faster than it was ever actually able to do.

JK: When Felix and I first set out to write this book, it was spring of 2019. At that point, AT&T had been the stewards of HBO and Time Warner for eight or nine months. We thought they were going to kill it, and that was one of the reasons why we set out to write this book, but a couple of things happened. AT&T mucked with Richard Plepler’s purview a lot in terms of business affairs and in terms of technology, but the one thing they would not touch was programming. 

AT&T was terrified of being known as the place that killed HBO. So kind of miraculously, they left the programming department alone. Despite Randall Stevenson publicly talking about mini Game of Thrones, they never acted on it. And then, to quote Frank Rich, a top producer at HBO, “and then they were gone.” 

I think there was a lot of fear within HBO’s offices, especially in those months leading up to the announcement that they were spinning off the company and going to merge it with Discovery, in May 2021. There was a lot of fear in the month or two or three leading up to that. Jason Kilar was starting to say things that were a little weird. It suddenly seemed like AT&T wanted to get in there and get under the hood, but it was a very short period that they owned the place. So yeah, HBO rejected the host, but the parasite just didn’t go after HBO’s bread and butter, which is its programming.

It’s funny to think of AT&T as both the host and the parasite in this metaphor. It’s perfectly apt, by the way.

FG: I mean, HBO was lucky that AT&T had so many other problems to deal with. First of all, the regulatory issues, getting targeted by Trump, and getting caught up in this whole antitrust suit delayed the acquisition for a couple years. Then there was the advent of 5G, and AT&T feeling like they had to build out a new network and put tons of money into it. There was the issue of their dividend and continuing to keep that dividend up, and investors being like, “You’d better not be wasting my dividend on that little Hollywood adventure over there.” There was the pandemic. There were so many things going on. 

I almost feel like HBO just luckily ran out the clock because the AT&T bosses were just fixated on one disaster after another. There was also the DirecTV acquisition that preceded the Time Warner acquisition, which was just colossal mess over there. I think they were kind of protected by all the other carnage going on.

I always say on the show that a workable antitrust policy in America is to just make it illegal for AT&T to buy anything. Then you’ll probably be fine. It’ll just work itself out. 

AT&T did do one thing that we should talk about really briefly. They went through a succession of heads of WarnerMedia in different structures, and they finally settled on Kilar. He made the big sweeping decision to shut down the movies going to theaters during the pandemic and put them all on HBO Max, which really kickstarted the service in a real way. Then everyone hated him, they sold it to Discovery, and he got axed. It feels like he played this pivotal short-term role, where he did the hard thing that everyone hated and he got knifed, but that was the thing that needed to happen.

JK: Yeah, it gave them a nice pop after they got off to a very slow start. HBO Max was born right in the belly of the beast of the pandemic, in May of 2020. By the end of that year, Kilar had been in charge for a few months when he decided to release all those movies on HBO Max. It gave it a nice pop, but it’s funny. I mean, what is the legacy of Kilar at this point, beyond giving it that initial pop? 

Discovery has come in and basically undone everything that he did, saying, “We love the theater and we love the theatrical window,” and not prizing original projects that are solely for HBO Max. So unquestionably, one of the reasons why Euphoria has more than 20 million viewers, according to HBO’s estimates, is because Jason Kilar helped supercharge the service. But I’m not sure how long-lasting this legacy is, because again, everything that he set out to do is being undone. Felix, your thoughts?

“When HBO Max launched, it was crickets.”

FG: Well, I also think that it was kind of a Hail Mary pass that had to be done. Look at the launch of HBO Max and compare it to the launch of Disney Plus. When Disney Plus launched they had The Mandalorian, a new Star Wars franchise that you had to go see. People were passing around Baby Yoda pictures on the internet, and you were like, “What’s going on? I have to go check out this Disney Plus thing. They have a baby Yoda!” When HBO Max launched, it was crickets. It was like, “What?” They had an origami show, with kids making origami.

JK: Perry Mason.

FG: Yeah.

One of the first times I opened it, their recommendation algorithm was like, “Do you want to watch Head of the Class,” the ‘80s TV show? That was a shock. I was like, “I kind of do, but this is not what I was expecting.”

FG: Part of it was the pandemic. They were supposed to have a Friends reunion, and maybe they were going to have a J.J. Abrams thing. But it’s like, how do you launch an HBO Max streaming service without your Game of Thrones sequel or prequel at launch time? They kind of screwed up that whole thing. 

Yeah, it was partly because of the regulatory challenge and partly because of the pandemic, so there were other problems. But they were just so desperate for something to give life to that service that I think Kilar made the right call in the end, which was Project Popcorn. It was like, “Well, the movie theaters are still half open. People are still worried about seeing movies in the theater. Let’s just take the whole Warner Bros. slate for a year and throw it on the service.” 

I think in retrospect, that was a smart move. But it was a smart move following a series of dumb moves, that they were even in that position where they had to do it.

I mean, that’s very generous. It was a series of catastrophically stupid moves. Let’s wrap up with Discovery. HBO is a storied brand and gets passed from owner to owner. It is now in the hands of Warner Bros. Discovery. David Zaslav seems like a cost-cutter. He seems like he has a vision, which is more than can be said for most of HBO’s previous owners. That vision is going to take it in some new direction. What is this new company? How should we think about it?

JK: I mean, it’s a company saddled with a lot of debt, that is merging an enormous library of nonfiction, nature documentaries, and really trashy reality shows with the huge Warner Bros. library. They’re saying, “It’s totally complementary. When we come up with our big streaming service, they have the fiction and we have the non-fiction. This thing can’t lose.” 

The jury’s very much out on that. It is a company saddled with a lot of debt that cut a lot of jobs last year. There was a lot of anxiety in the HBO hallways in the last two or three months of last year, like, “Uh-oh, is this really going to impact us?”

Since the beginning of January, the Warner Bros. Discovery stock has gone up. It went down a lot last year, but it went up a lot this year. It’s now up something like 30 to 40 percent. There is very much this narrative that they’re putting out of, “We’ve turned the page. We did all the gnarly difficult work last year. Now, Casey Bloys and Channing Dungey, the head of Warner Bros. Television Studios, go do what you need to do. Go out there and create great stories.” 

This company has $50 billion in debt. Something’s got to give.

So there’s a little bit more optimism within HBO right now, but it’s a lot of debt. This company has $50 billion in debt. Again, something’s got to give. We will see what happens, but they are trying to put out a more positive story. Now it’s chapter two in the WBD future.

As a company, this whole thing is still kind of addicted to declining cable revenues. All of those Discovery channels are cable channels. They all have to move to streaming. Do they know that they have to make this big disruptive shift, or is it still, “We’re trying to thread the needle while we build the new thing”?

FG: I think they’re taking a less radical streaming-first approach, in some ways, than their predecessors, than Kilar. Part of it is that for so long, Wall Street, in the home entertainment space, was all about growth at any cost. “Netflix, we just want you to get more customers and take more market share. Don’t worry about your profits.” That era kind of came to a crashing halt last year and Netflix’s stock went plummeting. 

The new mantra from Wall Street is, “We want profits. We don’t care as much about gaining market share for the sake of gaining market share.” I think that’s difficult, particularly with Warner Bros. Discovery, because the US market is quite saturated in terms of streaming services. I mean, you may pick up some customers here or there, depending on if you have a hit show, but the big challenge now is overseas. That is where you can pick up a lot of customers. That’s where the growth is going to come from. But Netflix has such a huge head start overseas. They have spent the past decade investing in offices around the world, cultivating local programming communities, building infrastructure, and building that brand that means something in Asia and Central America.

Warner Bros. Discovery is really far behind in that world, and it’s going to cost a lot of money to launch those efforts to try and build that brand up for their streaming service overseas. How do you do that in the short term when you have $50 billion in debt and your share price is still not anywhere close to where it was a year ago? 

They say they’ve moved through this gnarly phase, but the reality of it is that they’re going to have to figure out ways to optimize the revenues domestically in order to make those investments overseas. That’s going to probably mean licensing more of their content to other streaming services; it’s going to mean being a little bit more ruthless about how they invest in programming and different genres. So I don’t think they’re in any way out of the woods.

All right. Let me end with a big-think Decoder question. If we were having this conversation about any other brand that was this storied, we would have talked about the founder like 5,000 times by now. If we were talking about Netflix, we would have talked about Reed Hastings 1 million times by now. If we were talking about Meta, we would have talked about Zuckerberg 1,000 times by now. On and on it goes. 

We have not really talked about that many characters inside of HBO. There are some heads of programming, there are some people who have led it, and there are a lot of ancillary characters. HBO is a brand that is primarily a culture. It’s this culture that persists, and it’s very creative. There are a lot of characters in your book, and there are some very important stories about accountability for those characters’ actions in the book. People should go read it. 

Taking one step back, the secret to HBO is this culture that persists regardless of all these changes. Where does that come from and how does it persist so effectively?

JK: It’s kind of an amazing thing, and you’re right. We’ve mentioned Richard Plepler and Casey Bloys in passing. I don’t even know if we’ve mentioned anybody else. But what’s funny… Consider HBO’s current crop of programming executives. These are folks who have been there 15 to 20 years — all the top executives. That means they’ve only been at HBO since, let’s say, 2004. That means they weren’t there when The Sopranos, Sex and the City, The Wire, Six Feet Under, or Oz got programmed. 

The thing that sort of separates HBO from a Netflix, an Amazon, an AMC, or whatever network you want, is that all those executives who have been there, even though they weren’t there at the beginning, were all trained by the people who were. If you isolate what HBO’s programming department has looked like over the last four decades, there has basically been two generations. There was the mid-1980s to mid-2000s group and the mid-2000s group to the present day. 

When you have that level of continuity, and through repetition and seeing one genre of show after the next, you start to learn what the HBO playbook is. When you are a producer or a writer and you get within that HBO fold, this is why it’s very difficult to leave. Yes, HBO will give you a ton of money and a lot of creative freedom, that was the promise to those Darren Stars in the mid-1990s. But there is also an editorial direction. It’s like a really good magazine editor. They’re not going to gum up the works, they’re not going to destroy your copy, but they will give that good suggestion or two that will just unlock the world for you. This is what so many writers have said. 

So yes, HBO does not have a Reed Hastings, a Jeff Bezos, or a Steve Jobs, but they have kept that culture because there really have just been a couple generations of these programming executives.

All right, that’s a good place to end it. I have to go think about how to become a more effective magazine editor now. John, Felix, this was great. Hope to have you back soon.

JK: Thanks so much.

FG: Thanks so much for having us.

Decoder with Nilay Patel /

A podcast from The Verge about big ideas and other problems.

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