For 50 years, HBO has been a pioneer in television as one of the first paid tv networks that aired uncut movies, live boxing matches, concerts, and comedy specials. Over the last twenty years, HBO become the gold standard in storytelling on television, raking in 546 primetime Emmy wins along with amassing close to 80 million subscribers across HBO and HBO Max in the first quarter of 2022. However, HBO has never been its own standalone business. The network has survived merger after merger with one of the mergers, AOL Time Warner, considered the worst deal in modern American corporate history. In 2023, HBO is now under Warner Bros. Discovery, and its CEO, David Zaslav, is looking at deep cost-cutting measures and the rebranding of HBO Max to chip away at the estimated $55 billion in debt it inherited from AT&T.
Today, when we think of HBO, we typically think of big-budget, award-winning series like Game of Thrones, Succession, The Last of Us, and many more. However, original script programming wasn’t where HBO got its start. The birth of HBO coincided with the modernization of television across the United States with the emergence of cable in the 1960s and 70s. “When Chuck Dolan was basically inventing HBO while he was trying to wire half of Manhattan for cable. It was part of Dolan’s Sterling Communications and Time Inc.,” said James Andrew Miller, journalist and author of “Tinderbox: HBO’s Ruthless Pursuit of New Frontiers.”
HBO debuted on November 8, 1972, and it was one of the first paid television networks with 344 total subscribers in Wilkes Barre, Pennsylvania. A year later, Time Inc. would acquire Sterling Communications, becoming the sole parent of HBO at the time — sparking 50 years of a series of parent companies for the business. Throughout the 1970s and early 80s, a majority of the programming on HBO was simply uncut, uninterrupted, and uncensored movies along with live events from boxing to concerts to comedy specials. Since HBO was a paid service, the company didn’t have to worry about appeasing advertisers in its early years.
It was the only network that anybody had ever tried that got off the ground where it wasn’t supported by advertising. This was in the 1970s when the big three networks, CBS, ABC, NBC, they had 95% of the viewing and basically they had all the money and all of the stars.
Jeff Bewkes
Former CEO, HBO and Time Warner Inc.
For several years, HBO was one of the few places customers were able to watch their favorite films completely ad-free and uncut outside of the movie theaters. However, with the emergence of VHS, Blockbuster, and other video rental stores; HBO’s business was being undercut. “Our number one reason why people subscribe to HBO is now being taken by Blockbuster. And what are we going to do? We’re going to have to do original series,” Bewkes told CNBC.
In 1989, Time Inc. announced a $14 billion deal to merge with Warner Communication, creating the largest media and entertainment conglomerate of its time. The Time Warner era ushered in a multiplex model for HBO to reduce churn and debuted original programming “Dream On” and “The Larry Sanders Show.” “By the late 1990s and early 2000s, the network made big investments into original content. HBO followed up “Dream On” and “The Larry Sanders Show” with bold bets that would turn into critical darlings like “The Sopranos” and “Sex and the City.” The network went on a hot streak of original programming.
We knew we had to be different. It [HBO] had to be, particularly in the early years, simply put, worth paying for.
Richard Plepler
Former CEO, HBO
In 2002, HBO would see itself under another merger, this time, one of the worst mergers in modern American corporate history. The over $160 billion deal was met with a $98 billion net loss for AOL Time Warner at the end of 2002. Its troubled merger took years for Jeff Bewkes to uncouple Time Warner Inc. from AOL but by 2009, Time Warner Inc. spun off from AOL. “After the unwinding of the AOL deal, Jeff Bewkes had to make a lot of decisions about different divisions that were pruned or sold or spun. And ultimately, he made the company a pure content company. I think. What Jeff was very adamant about for my colleagues at Turner and Warner Brothers and HBO was. You guys do what it is that you do — make great programming,” Plepler told CNBC.
In 2009, Time Warner Inc. was spun off completely from AOL. During this turbulent time, HBO carried on. Hit shows like Game of Thrones, True Blood, Veep, Insecure, and many more dominated the zeitgeist in entertainment with 228 primetime Emmy wins between 2009 and 2017. HBO under Time Warner was the most distributed paid tv service in the U.S. However, it came at a time when domestic growth was undercut by cord-cutting and steep competition from other streamers. To combat this, the network set its sights on two major efforts: International growth and streaming.
Another merger was on the horizon for HBO as Time Warner was bought by AT&T for $85.4 billion in 2016. The deal took more than 18 months to complete as it was met with pushback by regulators and the DOJ. Under AT&T, Time Warner became WarnerMedia and it looked to activate HBO’s prestigious brand image to the wider world of streaming to compete with the likes of Netflix. Instead of bolstering HBO’s existing streaming products, HBO Go and HBO Now, Warner Media created a new streamer that combined WarnerMedia’s extensive film and tv catalog with HBO, forming HBO Max.
Watch the video above to learn how HBO Max changed the brand image of HBO and why the streaming service’s rebrand in 2023 could be good for HBO.
