Why HBO continues to thrive

Company co-president Richard Plepler says it's all about giving consumers fair value

Life is good if you’re Richard Plepler, co-president of HBO. While conventional networks scramble to find cost-cutting ways to get through the recession, the preeminent U.S. pay service, which turns 38 in November, has not felt the pinch. That’s because HBO’s model – and that of Canadian partners The Movie Network and Movie Central – is recession-proof: while ad dollars are often the first thing to go in an economic downturn, statistics indicate that even in hard times, consumers will retain their cable services.

Plepler was in Toronto recently along with Charles Schreger, HBO programming sales president, and Bill Maher, the troublemaking host of the channel’s Real Time with Bill Maher, to celebrate the one-year anniversary of HBO Canada with Astral Media’s TMN and Corus Entertainment’s MC. Those services licensed the HBO name and launched the Canuck version on Oct. 30 last year at no additional cost to subscribers as part of their multiplex packages, providing a valuable add-on one year after the pay-TV duopoly faced the arrival of new rival Super Channel.

Of course, TMN and MC subscribers had been getting key HBO programs for years, and HBO Canada does not exactly mirror its Time Warner-owned U.S. counterpart, incorporating into its schedule Cancon series such as The Line and Durham County. But it’s close enough, bringing viewers enduring water-cooler favorites like True Blood, Entourage, Flight of the Conchords and Curb Your Enthusiasm as well as new buzz shows Hung and Bored to Death.

Plepler, who shares his title at HBO with Eric Kessler, spoke to Playback about the service’s Canadian rollout, and how a former communications exec and amateur politician got to the top.

How involved are you in the way the HBO Canada brand is handled?

[Astral Media president and CEO] Ian Greenberg’s in charge. We are essentially selling our programming to [Astral and Corus] and there is an understanding that the way in which we market and advertise and present has worked very well for us, so with the slight tweaks for your audience, I think there is very much a shared vision about how to sell that.

TMN and Movie Central subscribers had already been getting HBO programs, yet there was still interest from viewers and cable and satellite companies to bring HBO into Canada directly. What made you ultimately opt instead for licensing the HBO name to Astral and Corus?

We were invited. It’s like somebody said, ‘Come over for dinner,’ and we said, ‘Well, we’ve always wanted to come over for dinner.’ And here we are, and our hope when we all heard about this was, ‘Great – our brand will be separated out and people will have a chance to see very clearly on their multiplex dial what the HBO programming slate and oeuvre is. It made sense to us.

So that’s more attractive than trying to get your channel piped in directly to Canadian viewers?

The truth is that it’s very, very hard to come in [on our own]. We don’t own our movie rights here, and movies are 70% of our schedule. So it’s impossible, really, to build a full network without a movie partnership. So this dynamic with [Canadian] movie channels and our programming is a perfect marriage.

The ad-based networks in the U.S. and Canada are going through a difficult period. Have you guys felt the recession in a tangible way?

We’ve been very resilient in this economy – I think for a simple reason: we give very good value; we give a lot of product. I think people intuit that it’s a fair and wonderful deal to get all this stuff – much of it up on-demand, for a very fair price: in the United States, $15 to $16 a month. So we believe that if you give people a quality product at a fair price, they’re not going to cord-cut. They are going to make the investment.

HBO has a history of embracing digital innovation. What’s next?

Technology for us has always been a wonderful friend. When the [cable and satellite] multiplex arrived, we had the product and the range to take advantage. When on-demand arrived, we were the most successful. A few years ago people used to ask, ‘Where’s your digital strategy?’ And we would say, ‘It’s called HBO on Demand.’

We’re going to present something next year called HBO Go, which will allow our subscribers, for the same subscription price, to stream 600 hours of our programming onto their PCs. All these things say to our customers: ‘Value, quality, what you want, when you want, where you want, how you want.’

It’s often said that when The Sopranos ended, many viewers cancelled their subscriptions. Is there any validity to that?

There’s not only no validity to it, but throughout the odyssey of The Sopranos, which was a wonderful and transcendent show, subscribers never went up when it was on, and they never went down when it was off. Two out of three of our subscribers never watched the show.

It was a great brand show, but True Blood is a great brand show; Hung is a great brand show; Big Love is a great brand show; Curb Your Enthusiasm is a great brand show. All those shows have more than carried their weight in lifting up our brand, as [the Atlantic City drama] Boardwalk Empire will I think, as Treme [about New Orleans musicians] will, as the other new shows will.

So, expensive, high-quality dramas are still a good business?

They’re a great business, particularly for our brand, and, frankly, as the networks cut back on those things and put more reality programming on and you have a Jay Leno filling five nights a week at 10 o’clock, those creative voices who were looking to the networks in addition to our own have fewer places to go, which is to our enormous benefit, and we welcome them wholeheartedly.

The route of ascending to the top of a broadcaster through the communications stream is not typical.

A lot of my career is an accident. I started in politics and I came to HBO to work for Michael Fuchs in the early days. My role was often as an honest sounding board for whoever my boss was at that particular time, whether it was Michael, or Jeff Bewkes or, later, Chris Albrecht. And while I held the title until 2002 of EVP of corporate communications and then EVP of HBO from ’02 to ’07, I had a multifaceted role. I always had a seat at the table because I had a close relationship with those CEOs. I was humbled [to be named co-president] and now I feel very privileged, but I was very comfortable with it.

You’re involved on a lot of committees, many of which have to do with foreign relations – Asia in particular. Where did that interest start?

My amateur passion is global politics. I read an inordinate amount of publications about world affairs. While I didn’t get involved in those things thinking it would have business resonance, it has of course informed my understanding about sensibilities, about business opportunities, about different contemporary ideas in places that I would not have had any insight into.

But being on the board of the Asia Society, being on the Chairman’s Advisory Council and the Council of Foreign Relations has given me access to some of the smartest people in academia and in politics to pick their brains. While I didn’t enter into it to get something, it has been very helpful to me and, I think, to the company.