WEBVTT - Ep6 - HBO CEO Richard Plepler on Winning the Streaming Wars 0:00:06.360 --> 0:00:09.799 Welcome to another episode of Strictly Business, the podcast where 0:00:09.800 --> 0:00:12.920 you'll hear the brightest minds working in the media business today. 0:00:13.119 --> 0:00:16.520 I'm Andrew Wallenstein, co editor in chief of Variety. It 0:00:16.600 --> 0:00:18.880 was my pleasure to sit down with HBO chairman and 0:00:18.920 --> 0:00:21.840 CEO Richard Plepler on May four from the stage of 0:00:21.920 --> 0:00:25.720 Variety's annual Entertainment and Technology Summit in New York. We 0:00:25.840 --> 0:00:28.120 enjoyed a wide ranging discussion on the state of the 0:00:28.240 --> 0:00:31.760 HBO business as Plepler navigates the brand through what's probably 0:00:31.800 --> 0:00:35.600 the fiercest competitive environment he's seen since he came aboard 0:00:35.640 --> 0:00:39.160 way back in but I sh'll hear from him. HBO 0:00:39.280 --> 0:00:42.120 is confident about its position in the marketplace thanks to 0:00:42.200 --> 0:00:44.760 a well stocked cupboard of hit series like Game of 0:00:44.840 --> 0:00:48.040 Thrones and a direct consumer business that is making HBO 0:00:48.159 --> 0:00:52.400 widely available via digital platforms. I hope you enjoy our conversation, 0:00:52.560 --> 0:00:54.840 and if you like this episode, make sure you subscribe 0:00:54.880 --> 0:00:59.760 to Strictly Business. Now here's Richard Plepler. I want to 0:01:00.000 --> 0:01:03.920 are with the elephant in the room, which I know 0:01:04.000 --> 0:01:05.960 you're going to be limited in what you could say 0:01:06.160 --> 0:01:09.920 about a actually less than limited, less than limited about 0:01:09.920 --> 0:01:13.640 a certain court case about a certain pair of companies, 0:01:14.080 --> 0:01:16.040 one trying to acquire the other. All right, so let 0:01:16.080 --> 0:01:19.320 me let me at least ask this. A T and 0:01:19.400 --> 0:01:22.920 T is no stranger to HBO. You guys struck a 0:01:22.920 --> 0:01:29.200 pretty interesting distribution deal in conceptually, what does what do 0:01:29.280 --> 0:01:33.720 these two companies bring to each other? Look, I think, um, 0:01:33.760 --> 0:01:38.000 it's quite axiomatic. Right. They have a hundred and ten 0:01:38.200 --> 0:01:43.360 hundred and twenty million connections with consumers. They have a 0:01:43.480 --> 0:01:47.600 huge data analytics reservoir which I think will be very 0:01:47.680 --> 0:01:51.600 useful to us in terms of subscriber acquisition. Um, the 0:01:51.680 --> 0:01:54.360 more information we have, we think, the better we can 0:01:54.360 --> 0:01:57.720 serve the consumer and better serve our customers currently in 0:01:57.800 --> 0:02:02.800 potential customers. And the deal that we did that HBO 0:02:02.920 --> 0:02:05.840 did in the summer two thousand sixteen, which was a 0:02:05.920 --> 0:02:12.480 multilateral deal broadband wireless direct TV, is really kind of 0:02:12.800 --> 0:02:16.919 a microcosm of our distribution strategy at large, right, which is, 0:02:16.960 --> 0:02:20.040 we wanted to make HBO available whenever, however, wherever people 0:02:20.880 --> 0:02:24.720 want it, And we built a multilateral distribution network for 0:02:24.919 --> 0:02:28.000 cable Partner's, satellite partners, Telco Partners, and now Digital Partners. 0:02:28.400 --> 0:02:31.640 And as you well know, because We've spoken about this before. 0:02:32.480 --> 0:02:35.519 When we announced that we were going to build a 0:02:36.520 --> 0:02:40.760 digital platform. The whole concept was we saw the broadband 0:02:40.800 --> 0:02:43.120 owned the universe. When we made that announcement on Investor 0:02:43.200 --> 0:02:46.959 Day in October fourteen, that were probably about three and 0:02:46.960 --> 0:02:50.079 a half million broadband only subs United States. We sit 0:02:50.120 --> 0:02:55.200 here today, uh, there's twenty million, and we knew that 0:02:55.200 --> 0:02:57.480 that was growing, and we wanted to be available to 0:02:57.520 --> 0:03:01.600 people who just had broadband. And it has been a 0:03:01.720 --> 0:03:06.960 terrific addition um to our to our distribution model because 0:03:07.560 --> 0:03:11.359 we now are approaching uh, folks who don't have a 0:03:11.960 --> 0:03:16.960 traditional cable subscription. That said, we're growing in the ecosystem 0:03:17.000 --> 0:03:20.360 as well, for all kinds of different reasons. Ecosystem meaning 0:03:20.360 --> 0:03:24.680 the linear channel traditional distribution system as well and parenthetically, 0:03:24.720 --> 0:03:28.320 and this is interesting. Remember the broadband platforms that Comcast has, 0:03:28.440 --> 0:03:30.799 or that Spectrum has, that A T and T has 0:03:31.320 --> 0:03:34.480 UM they can bundle us as well. So there's all 0:03:34.760 --> 0:03:38.520 different means of getting to the customer and we wanted 0:03:38.520 --> 0:03:41.080 to maximize those, which is why we did what we did, which, 0:03:41.160 --> 0:03:44.480 as you know, UM resulted last year in our biggest 0:03:44.520 --> 0:03:47.280 year of sub revenue growth ever. So I think it 0:03:47.360 --> 0:03:49.440 was a good decision that we did it. We didn't 0:03:49.440 --> 0:03:52.200 think it was going to be cannibalistic, which was uh. 0:03:52.240 --> 0:03:54.280 Some people's dig on us was a we wouldn't. We 0:03:54.280 --> 0:03:56.080 didn't have the tech DNA, We couldn't do it and 0:03:56.120 --> 0:03:58.720 be if we did do it to be cannibalistic, yes, 0:03:58.760 --> 0:04:02.160 we could know it wasn't. And our proposition was pretty simple, 0:04:02.160 --> 0:04:04.320 which was the pie was going to get bigger and 0:04:04.360 --> 0:04:05.800 that was going to be good for the consumer. It 0:04:05.800 --> 0:04:07.400 was gonna be good for distributors, it was gonna be 0:04:07.400 --> 0:04:10.000 good for us. So when you say you've got this 0:04:10.080 --> 0:04:13.160 subscriber growth, forgive me for being a little skeptical. Is 0:04:13.160 --> 0:04:16.360 it possible that, Okay, you guys have tapped now a 0:04:16.480 --> 0:04:19.280 market that you were never able to tap, that always 0:04:19.320 --> 0:04:22.359 needed to buy basic cable before they got Hbo. Now 0:04:22.440 --> 0:04:25.080 they can go directly to Hbo. Okay, so you got 0:04:25.120 --> 0:04:27.320 I don't know, three four or five million. How many 0:04:27.320 --> 0:04:29.840 more of those people could there be left? So we 0:04:29.920 --> 0:04:34.320 think um our penetration, which has always been about a 0:04:34.320 --> 0:04:37.360 third of the country, we think we can get and 0:04:37.480 --> 0:04:40.720 that's ambitious, it is ambitious. But we we look at 0:04:40.760 --> 0:04:45.880 our better performing affiliates and those better performing affiliates UM 0:04:45.920 --> 0:04:49.600 are close to that, and so for us, when we 0:04:49.680 --> 0:04:53.320 looked at the opportunity in the marketplace, basically what we 0:04:53.360 --> 0:04:55.599 said was pretty simple, which is, you know what, there's 0:04:55.600 --> 0:04:58.400 a huge undecided vote out there, and we've shored up 0:04:58.400 --> 0:05:00.360 our base pretty well. There's obviously there going to be 0:05:00.400 --> 0:05:03.840 people who aren't going to subscribe because either they feel 0:05:03.960 --> 0:05:06.479 they have enough or they don't like the programming. But 0:05:06.680 --> 0:05:10.080 there is a big market of an additional fifteen or 0:05:10.120 --> 0:05:12.680 twenty million homes out there that we're going after in 0:05:12.880 --> 0:05:16.200 both the broadband ecosystem in the traditional ecosystem. So we 0:05:16.320 --> 0:05:17.839 think there's a lot of growth left and we're going 0:05:17.880 --> 0:05:20.120 to attack it. And the key to doing that is 0:05:20.200 --> 0:05:23.719 to continue to make great content, curate that content, and 0:05:23.800 --> 0:05:26.800 make sure that our brand promise of excellence continues to 0:05:26.839 --> 0:05:29.360 be sustained. If we do that, I think last year 0:05:29.400 --> 0:05:33.479 is an indicator of of what's ahead. We'll get to 0:05:33.520 --> 0:05:36.720 that content in a bit. But you know, another distribution question, 0:05:37.160 --> 0:05:39.720 what is the primary growth driver? I know there is 0:05:39.880 --> 0:05:42.440 HBO now as a standalone. I know I could get 0:05:42.440 --> 0:05:46.800 it through Amazon or Hulu. Is there any one of 0:05:46.839 --> 0:05:49.640 those that's going to be the real driver. It's multifaceted, 0:05:49.720 --> 0:05:52.719 and I would say this over the course of the 0:05:52.800 --> 0:05:56.320 last five years. Just to your point about growth, a 0:05:56.400 --> 0:05:58.719 couple of things. Over the course of the last five years, 0:06:00.160 --> 0:06:05.400 HBO has realized thirty five For companies forty five years old, 0:06:05.680 --> 0:06:08.040 we've realized thirty five pc of our growth in the 0:06:08.120 --> 0:06:11.320 last five years. So I think that shows how robust 0:06:11.520 --> 0:06:15.360 the brand is. Also, over the last five years, as 0:06:15.440 --> 0:06:20.559 multi channel homes have declined seven percent, excuse me, we've grown. 0:06:22.240 --> 0:06:26.800 And so the fact is we were under penetrated over 0:06:26.839 --> 0:06:29.440 the course I think of of the last decade, and 0:06:29.480 --> 0:06:31.840 we want to get that penetration up to what we 0:06:31.920 --> 0:06:35.520 think is an appropriate level, which is about half the country. 0:06:35.720 --> 0:06:38.360 That's I mean, you sound incredibly confident that you could 0:06:38.360 --> 0:06:40.560 do this, which is interesting. GIF. I'm not telling you 0:06:40.560 --> 0:06:44.520 it's easy. I'm just telling you that, uh, we're we've 0:06:44.560 --> 0:06:48.119 seen the momentum of our sub growth. We believe that. 0:06:48.440 --> 0:06:50.680 You know, here's an interesting I think this is an 0:06:50.720 --> 0:06:56.480 interesting paradox about what's happening out there in this very 0:06:56.600 --> 0:07:01.320 rich content driven culture of ours, which is there there's 0:07:01.400 --> 0:07:05.760 somewhere around nine thousand hours of programming. There's about four 0:07:06.240 --> 0:07:09.600 eighty seven hours of scripted programming, which accounts to five 0:07:09.600 --> 0:07:12.600 thousand hours. It's about seven hundred and fifty hours non 0:07:12.640 --> 0:07:17.000 scripted programming, it's about four thousand hours. Uh, there's only 0:07:17.040 --> 0:07:19.520 eight thousand, seven d and sixty hours in the year. 0:07:20.120 --> 0:07:22.760 So what does that mean. It means you can't keep 0:07:22.800 --> 0:07:27.760 track of everything. And brands matter more than ever because 0:07:27.840 --> 0:07:31.679 when people a brand, essentially as a promise. Our promise 0:07:31.800 --> 0:07:34.440 is the curation of quality. Other people are going to 0:07:34.560 --> 0:07:37.440 do good work. That's fine. As long as we continue 0:07:37.440 --> 0:07:40.200 to curate excellence, and we do it across a lot 0:07:40.240 --> 0:07:43.680 of different categories, we're going to continue to grow. So 0:07:44.080 --> 0:07:46.360 that's what we think about. How do we make sure 0:07:46.520 --> 0:07:50.880 that inside the HBO brand, whether it's docues, whether it's sports, 0:07:50.880 --> 0:07:54.160 whether it's half hours hours mini series, we are putting 0:07:54.200 --> 0:07:58.000 together in an array of quality that can become addictive 0:07:58.200 --> 0:08:01.360 to an even broader part of the consumer ration and 0:08:01.400 --> 0:08:03.760 so and that's what we're doing for them. I understand 0:08:03.760 --> 0:08:06.680 your bullishness, but let's take a step back and say, 0:08:06.720 --> 0:08:11.200 the reality is the undeniable. The undeniable reality is is 0:08:11.280 --> 0:08:14.119 the competitive landscape you're facing right now is like nothing 0:08:14.120 --> 0:08:19.040 you've ever seen Netflix alone spending at probably, you know, 0:08:19.080 --> 0:08:22.520 possibly double what you guys are doing on just original content, 0:08:22.640 --> 0:08:26.640 not talking about licensing. Amazon right behind them, Apple coming. 0:08:27.160 --> 0:08:31.800 Your incumbent competitors like Showtime and Stars aren't fading fast 0:08:31.840 --> 0:08:36.000 anytime soon. So how are you going to be able 0:08:36.040 --> 0:08:39.199 to compete, especially when you're being outspent by a lot 0:08:39.240 --> 0:08:43.880 of these new players, not a lot, you know, our 0:08:44.040 --> 0:08:48.920 brand um is a magnet for talented people in the 0:08:48.920 --> 0:08:51.920 creative community. I feel like Ted Surrando says the same 0:08:51.960 --> 0:08:56.440 thing he he he does, and he's welcome to say it, 0:08:56.880 --> 0:08:59.280 and there's some truth to it, and they do very 0:08:59.280 --> 0:09:02.800 good work. And I've said publicly and I'm I've said 0:09:02.800 --> 0:09:04.960 it to them directly. Anybody who doesn't tip their hat 0:09:05.040 --> 0:09:08.839 to what those guys have accomplished in the last seven 0:09:08.840 --> 0:09:11.520 ten years just isn't being fair. They've done a terrific job. 0:09:11.880 --> 0:09:15.400 Our job is to play our game to our fullest capacity. 0:09:15.720 --> 0:09:20.240 And so the blessing of our brand, the blessing of 0:09:20.880 --> 0:09:25.640 u HBO, is that the line at our door in 0:09:25.640 --> 0:09:29.240 in in May of two thousand eighteen is even bigger 0:09:29.280 --> 0:09:31.360 than the line at our door when I was co 0:09:31.520 --> 0:09:34.319 president in two thousand seven to two thousand twelve. The 0:09:34.360 --> 0:09:38.720 line was pretty big that so it's it's interesting despite 0:09:38.880 --> 0:09:43.320 all this surfeit of content, we have more extraordinary writers 0:09:43.760 --> 0:09:47.679 and producers and directors who want to work at HBO 0:09:47.760 --> 0:09:52.640 than ever before, and so we we have that embarrassment 0:09:52.679 --> 0:09:57.360 of riches. And you know, every Friday we know of 0:09:57.480 --> 0:10:00.240 three or four different projects that Monday morning when we 0:10:00.280 --> 0:10:03.120 came in we didn't know about. And that's very exciting. 0:10:03.160 --> 0:10:06.839 So our job is pick well, work with people with 0:10:06.880 --> 0:10:10.080 whom we have a shared vision. We have more programming 0:10:10.120 --> 0:10:13.240 coming next year than at any time in our history, 0:10:13.640 --> 0:10:17.840 working with a wide range of people, um from you 0:10:17.880 --> 0:10:21.360 know j J Abrams to Issa to a prequel of Thrones, 0:10:21.440 --> 0:10:24.040 which were uh, we're looking at a range of different 0:10:24.040 --> 0:10:27.440 pilots right now, uh damon. Linda law from has come 0:10:27.480 --> 0:10:31.559 back with a project called Watchman. There is absolutely no 0:10:31.679 --> 0:10:35.640 shortage of extraordinary work being done for us. Our job 0:10:36.400 --> 0:10:39.120 make the right bets and if we do that then 0:10:39.320 --> 0:10:42.640 this is not binary. Doesn't mean there isn't going to 0:10:42.760 --> 0:10:45.160 be a good show on Netflix or a good show 0:10:45.200 --> 0:10:49.080 on Amazon. None of that has interfered with our growth. 0:10:49.559 --> 0:10:54.280 And I think the proof is in the pudding. Um. Again, 0:10:54.600 --> 0:10:58.720 despite the intensity of this competition, we grew more last 0:10:58.800 --> 0:11:01.680 year than in any year in our history, and we're 0:11:01.720 --> 0:11:05.360 growing and on track for terrific double digit sub revenue 0:11:05.360 --> 0:11:08.040 growth this year as well. So wouldn't you say, our 0:11:08.400 --> 0:11:11.560 game well and curate quality, and we will continue to grow. 0:11:11.760 --> 0:11:14.360 It's not a zero sum game. I was exactly the 0:11:14.400 --> 0:11:16.800 exact phrase I was going to use. Don't you think 0:11:17.200 --> 0:11:19.679 even if you manage to do well while competitor B 0:11:19.880 --> 0:11:23.760 does very well, that competitor F, G and H may 0:11:23.840 --> 0:11:27.800 actually fall out. Aren't we, in this consolidating world coming 0:11:27.840 --> 0:11:30.600 to a place where well, the lower brands are not 0:11:30.640 --> 0:11:34.240 going to make it? Listen, I do think that. Um, 0:11:34.320 --> 0:11:36.920 if you just look at your own lives and you 0:11:36.960 --> 0:11:39.880 look at you know, you have only a certain amount 0:11:39.880 --> 0:11:41.880 of leisure time, a certain amount of time you can 0:11:41.920 --> 0:11:45.640 watch movies, watch television beyond the computer you make, you make, 0:11:47.080 --> 0:11:51.040 you make judgments, you make picks, and Um, the key 0:11:51.120 --> 0:11:53.840 for us is to keep the halo on our brand 0:11:54.320 --> 0:11:58.240 so that when people do have discretionary time, they are 0:11:58.320 --> 0:12:01.120 comfortable that we are fulfilling our honest to deliver excells 0:12:01.120 --> 0:12:03.319 and they come they might not love everything but they 0:12:03.400 --> 0:12:06.760 certainly think that for fifteen dollars a month, three thousand 0:12:07.040 --> 0:12:10.000 hours of library, the wide range of programming which we 0:12:10.080 --> 0:12:13.160 make for Hollywood movie studios, people end up saying, you 0:12:13.160 --> 0:12:16.320 know what, that's a pretty good price value proposition. And 0:12:16.440 --> 0:12:18.439 they're delivering what they say they're going to deliver. And well, 0:12:18.480 --> 0:12:21.080 I and I can't watch everything. There's three or four 0:12:21.120 --> 0:12:24.120 things on every month on HBO that I think are terrific. 0:12:24.120 --> 0:12:26.640 Maybe they're in love with John Oliver, maybe Bill Maher, 0:12:26.880 --> 0:12:29.760 Maybe it's Vice, Maybe it's our docuse, maybe it's the movies, 0:12:29.800 --> 0:12:32.280 maybe it's Silicon Valley, whatever it is. I want to 0:12:32.280 --> 0:12:35.040 be a part of this because it's worth it. That's 0:12:35.080 --> 0:12:37.520 what we think about all the time. Are we building 0:12:37.559 --> 0:12:42.800 addicts and are we developing and enhancing our curation making 0:12:42.800 --> 0:12:45.920 more and more consumers um decide that they want to 0:12:45.960 --> 0:12:49.760 be a subscriber. So you know, job one, of course, 0:12:49.840 --> 0:12:54.320 is putting on the hits. You just mentioned Game of Thrones. Uh, 0:12:54.360 --> 0:12:58.360 these prequels that are in in development, Where do things 0:12:58.400 --> 0:13:00.640 stand there? I mean, is that going to be the 0:13:00.640 --> 0:13:04.280 next big hit? Well, look, as you well know a 0:13:04.480 --> 0:13:06.719 student that nobody knows what the next big hit is 0:13:07.000 --> 0:13:12.000 you know the the when I when I started, uh 0:13:12.160 --> 0:13:14.320 back in oh seven and the Sopranos was going off 0:13:14.320 --> 0:13:17.960 the year. Um, the first question when I sat up 0:13:17.960 --> 0:13:20.200 at the tc A you may have even been there, was, 0:13:20.240 --> 0:13:23.320 oh my god, Sopranos is up there? What's the next Sopranos? 0:13:23.400 --> 0:13:25.600 And I answered it then by saying, there is no 0:13:25.679 --> 0:13:29.640 next Sopranos. There's the next great range of programming. And 0:13:29.800 --> 0:13:32.560 in came Alan Ball with True Blood, and in came 0:13:32.640 --> 0:13:35.000 Lean had done him with Girls, and in came you 0:13:35.040 --> 0:13:38.199 know this, this this British writer named Amandui and Nuci 0:13:38.480 --> 0:13:41.520 satirizing American politics would be. And these two guys who 0:13:41.600 --> 0:13:44.200 had never really done television, who nobody had heard of, 0:13:44.280 --> 0:13:47.040 David benny Off and Dan Wise with Thrones. So what 0:13:47.120 --> 0:13:49.839 you want to do is create an environment, which we're 0:13:49.960 --> 0:13:53.080 very proud of, UM, where talent wants to work. And 0:13:53.120 --> 0:13:57.680 if you do that, UM, it's it creates a certain 0:13:57.720 --> 0:14:02.680 catalytic momentum because talent shows up and m and then look, 0:14:04.280 --> 0:14:08.840 we're pretty damn good brand ambassadors. We believe in our brand. Um, 0:14:09.000 --> 0:14:11.760 we're very proud of it. But the best brand ambassadors 0:14:11.760 --> 0:14:15.640 for us are the talent themselves because Nicole Kidman has 0:14:15.640 --> 0:14:18.080 an experience, or Reese Witherspoon has an experience, or David 0:14:18.120 --> 0:14:22.880 Kelly has an experience. They're then repeating that to their colleagues, 0:14:23.160 --> 0:14:26.160 and they're saying, you know, uh, look, I've worked in 0:14:26.200 --> 0:14:28.360 a lot of places. I've never had the kind of feedback. 0:14:28.400 --> 0:14:30.760 I've never had the kind of response. I've never been 0:14:30.800 --> 0:14:35.080 treated that way. My product is marketed beautifully, it's promoted beautifully. 0:14:35.120 --> 0:14:38.040 That's an experience I want to repeat so well. People 0:14:38.080 --> 0:14:41.000 can say a lot of different things, and everybody is 0:14:41.600 --> 0:14:44.960 perfectly within their rights to celebrate and brag about their brands. 0:14:45.560 --> 0:14:48.120 We've delivered on it for a long time, and I 0:14:48.160 --> 0:14:52.200 think the talent speaks about it authentically and and that 0:14:52.200 --> 0:14:55.000 that has its own virtuous circle. But as we saw 0:14:55.120 --> 0:14:59.400 with Big Little Lies, the cost of that talent is 0:14:59.440 --> 0:15:02.720 going up. The cost of production has been driven up 0:15:02.800 --> 0:15:05.920 dramatically for a lot of different genres, and then you've 0:15:05.960 --> 0:15:08.600 got I hate to go back to the Netflix of 0:15:08.640 --> 0:15:11.320 it all, but when you see the Ryan Murphy's and 0:15:11.360 --> 0:15:15.320 the Shonda Rhymes getting sort of just peeled out and 0:15:15.480 --> 0:15:18.800 put back into that streaming service, I mean, don't you 0:15:19.160 --> 0:15:22.640 have to worry about holding onto talent on both sides 0:15:22.680 --> 0:15:25.240 of the camera when it seems like they can get 0:15:25.240 --> 0:15:28.720 more easily poached than ever. Well, look, we understand that 0:15:28.760 --> 0:15:32.720 the cost of content has gone up, and we understand that, um, 0:15:32.760 --> 0:15:34.920 there's a premium on that, and there's a multiple, and 0:15:34.960 --> 0:15:37.080 we have to pay it. But we're more than willing 0:15:37.120 --> 0:15:39.640 to do it because the return on that investment is 0:15:39.680 --> 0:15:42.040 as strong as it is. You know, we are operating 0:15:42.040 --> 0:15:45.680 income last year, I think report he was somewhere very 0:15:45.680 --> 0:15:48.760 close to two and a half billion dollars. We were growing, 0:15:49.080 --> 0:15:51.920 and we're making money, and we're investing, and we're going 0:15:51.960 --> 0:15:54.480 to continue to invest more and more in content because 0:15:54.680 --> 0:15:56.840 that's the heart and soul of the brand. So we're 0:15:56.920 --> 0:16:00.440 perfectly comfortable making the kinds of invest monts and the 0:16:00.480 --> 0:16:04.680 kinds of bets we need to make to have a 0:16:04.760 --> 0:16:07.080 panoply of shows on our network that are going to 0:16:07.200 --> 0:16:10.840 be compelling. And I think talent knows, because this is 0:16:10.960 --> 0:16:13.960 a whole different conversation. There are back end opportunities for 0:16:14.000 --> 0:16:18.720 talented HBO UH people who come and have uh a 0:16:18.880 --> 0:16:21.800 full and rich experience at HBO. From the creative side, 0:16:22.040 --> 0:16:26.160 if the show does well, they do very well. And 0:16:26.320 --> 0:16:28.640 you know, if you go talk to people who have 0:16:28.720 --> 0:16:30.640 worked with us, who have a lot of options to 0:16:30.640 --> 0:16:33.080 go a lot of different places, they're coming back over 0:16:33.120 --> 0:16:35.240 and over again to work at HBO. I think that 0:16:35.280 --> 0:16:39.240 speaks volumes about our brand in the experience that people 0:16:39.280 --> 0:16:42.240 have there. So is it competitive? Of course it's competitive. 0:16:42.400 --> 0:16:44.320 Are we more than up to the competition? I think 0:16:44.360 --> 0:16:46.520 we are. Do you how do you you know when 0:16:46.560 --> 0:16:49.080 you're in the room wooing the biggest and best talent 0:16:49.160 --> 0:16:53.440 and those talents are getting wooed elsewhere, you know, do 0:16:53.040 --> 0:16:55.160 you do you point out things like kind of look, 0:16:55.200 --> 0:16:57.600 Netflix has this, They have so much volume there they 0:16:57.600 --> 0:16:59.440 don't even know how to handle it, whereas maybe we 0:16:59.520 --> 0:17:02.120 take a little more of a and in Glover pro 0:17:02.360 --> 0:17:06.679 what I don't think it's necessary to you know, we 0:17:06.720 --> 0:17:10.760 don't get into speak in derogation of Netflix or of Showtime. 0:17:11.480 --> 0:17:16.000 People come to HBO because they know that we are 0:17:16.119 --> 0:17:20.560 very good at adventizing programming. Our marketing is superb. Our 0:17:21.040 --> 0:17:24.440 communications team is superb. We know how to take things 0:17:24.480 --> 0:17:28.440 and lift them up into a very crowded culture. And again, 0:17:29.440 --> 0:17:32.800 don't listen to me about this. Don't listen to my 0:17:32.960 --> 0:17:35.920 colleagues about this, listen to the talent talk about this. 0:17:36.240 --> 0:17:41.159 So what we do is again the line at the 0:17:41.200 --> 0:17:44.400 door is a long one and that is a blessing 0:17:44.480 --> 0:17:48.080 for us. And when people come in, they're very enthusiastic 0:17:48.200 --> 0:17:51.600 from the first hour about developing with us because our 0:17:51.640 --> 0:17:54.760 development team is also fantastic and people know what it 0:17:54.840 --> 0:17:58.840 is to work inside UM. You know, with our development teams, 0:17:58.840 --> 0:18:01.240 whether it's on a half hours or hours or minis 0:18:01.320 --> 0:18:04.119 so a lot of the pedigree that we bring to 0:18:04.160 --> 0:18:07.800 the creative process UM, I think is a great advantage 0:18:08.520 --> 0:18:11.960 to to to our competitive side. Let's go back to 0:18:12.000 --> 0:18:14.880 the distribution side of the house, because I think one 0:18:15.000 --> 0:18:20.440 under appreciated piece of the HBO business is international, and 0:18:20.720 --> 0:18:23.480 I think people don't even buy a large understand how 0:18:23.520 --> 0:18:26.280 big a footprint that is. And that also is making 0:18:26.280 --> 0:18:29.840 this sort of streaming evolution and lots of different interesting ways. 0:18:30.119 --> 0:18:33.760 So where's that all going. So we have just as 0:18:33.800 --> 0:18:40.520 our distribution strategy domestically is multilateral, it is uh internationally multilateral. 0:18:40.560 --> 0:18:43.520 So we have owned and operated networks in sixty countries 0:18:43.560 --> 0:18:46.440 as you know, in Latin America, in in Eastern Europe 0:18:46.480 --> 0:18:51.680 and Asia. We have directed consumer products in Nordics and 0:18:51.720 --> 0:18:54.840 in Spain and now in Poland and and and uh, 0:18:54.880 --> 0:18:57.720 and we're thinking about other markets as well. And then 0:18:57.760 --> 0:19:00.440 we have what we call home of HBO, which are 0:19:00.760 --> 0:19:05.800 licensing deals with Sky, with Foxtel, with Bell Media, which 0:19:05.840 --> 0:19:10.080 are very very very um uh you know, high marginal, 0:19:10.080 --> 0:19:14.160 lowris revenue deals. And the question for us, uh, you know, 0:19:14.280 --> 0:19:18.000 has always been with those don't get counted as subscribers, 0:19:18.040 --> 0:19:22.399 even though we have you know, eighty five million subscribers internationally. 0:19:22.760 --> 0:19:27.439 Those don't get counted. But Sky Sky Italia home of HBO, 0:19:27.480 --> 0:19:30.800 Sky Deutscheley and home of HBO, um Sky Atlanta home 0:19:30.840 --> 0:19:34.960 of HBO Bell Media in Canada, those are all HBO subs. 0:19:35.000 --> 0:19:38.200 They're just put under an overall licensing deal. So we've 0:19:38.200 --> 0:19:41.440 made up till now the decision to do those kinds 0:19:41.440 --> 0:19:44.520 of licensing deals home of deals. UM. Whether that evolves 0:19:44.520 --> 0:19:47.439 in the future is an open question. I hate to 0:19:47.440 --> 0:19:51.200 sound like a broken record, but Netflix, Amazon full Court 0:19:51.240 --> 0:19:55.119 Press globally. UM. It's interesting hearing you guys take this 0:19:55.200 --> 0:19:59.399 customized approach region to region. At some point, though, do 0:19:59.480 --> 0:20:02.560 you need to go head to head with Netflix and 0:20:02.600 --> 0:20:07.640 Amazon and others in the same way that you're doing domestically. Well, 0:20:07.680 --> 0:20:10.040 I wouldn't look at it as are we going to 0:20:10.119 --> 0:20:12.040 go head to head with Netflix or head to head 0:20:12.040 --> 0:20:13.800 with the Amazon. I would look at it, what is 0:20:13.840 --> 0:20:17.760 the proper way to maximize um our brand over a 0:20:17.800 --> 0:20:22.560 ten year time rising. Remember we have been UM you know, 0:20:22.680 --> 0:20:28.000 managing our our business and and tethered to a corporation 0:20:28.440 --> 0:20:31.679 which was running uh an earnings model for you know, 0:20:31.720 --> 0:20:33.159 a long time. And when you're at that end of 0:20:33.160 --> 0:20:35.480 Pennsylvania Avenue, you have one set of demands. When you're 0:20:35.560 --> 0:20:38.600 my inde Pennsylvania Avenue, you know, you may be thinking 0:20:38.640 --> 0:20:41.399 slightly differently. So I think the good thing is that 0:20:41.440 --> 0:20:46.159 our technology has evolved. UM we now have one global platform. 0:20:46.440 --> 0:20:49.880 We've merged our tech stacts between HBO Go and HBO now. 0:20:50.080 --> 0:20:52.600 And what's exciting for us is if we wanted to 0:20:52.640 --> 0:20:55.880 pivot internationally like we did in Nordics, like we did 0:20:55.880 --> 0:20:58.720 in Spain, like we just didn't, we can do that 0:20:59.040 --> 0:21:00.680 and that will be a decision and that we make. 0:21:00.920 --> 0:21:02.760 You know, over the coming years. What I wanted to 0:21:02.760 --> 0:21:04.840 make sure that we had and what thankfully we have 0:21:04.960 --> 0:21:09.080 built is optionality and UM you know, where we pivot 0:21:09.080 --> 0:21:12.920 and how we pivot, stay tuned, got it. Uh. Also 0:21:12.960 --> 0:21:16.879 wanted to talk about technical infrastructure, what you're doing through 0:21:17.240 --> 0:21:21.920 you know, HBO's digital expression. I mean, you guys went 0:21:22.040 --> 0:21:25.080 through an evolution there where you know there was some 0:21:25.160 --> 0:21:29.480 trial and error bam tech. Uh, bam Tech wasn't trial 0:21:29.520 --> 0:21:33.200 and error before that. Well, we were building from a 0:21:33.320 --> 0:21:35.359 stand I wouldn't even call that trial in here. We 0:21:35.359 --> 0:21:41.480 were building from a standing start, a a tech strategy. 0:21:41.520 --> 0:21:46.320 And what we concluded very quickly was the fastest way 0:21:46.359 --> 0:21:49.520 for us to build digital capacity was to rent our 0:21:49.560 --> 0:21:52.000 back end. And that's what we did with BAMTech. I 0:21:52.000 --> 0:21:55.440 think it was proved to be um the right decision. 0:21:55.480 --> 0:21:58.000 They did a terrific job for us, and as we 0:21:58.000 --> 0:22:03.639 were doing that, we a proficiencies. We built our engineering team, 0:22:03.720 --> 0:22:06.159 and we created the capacity for us to move on 0:22:06.240 --> 0:22:08.800 our own. But we couldn't have done that and moved 0:22:08.840 --> 0:22:11.320 as fast as we did into the digital space. So 0:22:11.520 --> 0:22:14.679 we rented what we needed to. We grew and we built, 0:22:15.200 --> 0:22:18.440 and we are where we are now, which is independent 0:22:18.720 --> 0:22:20.960 with our own with our own tex stat I mean, 0:22:21.000 --> 0:22:24.679 as you look across the media landscape, do you see 0:22:25.400 --> 0:22:30.080 that brands like yourselves are sort of like ingesting that 0:22:30.200 --> 0:22:32.800 technical DNA and that's what's necessary to get to the 0:22:32.840 --> 0:22:36.639 next level. Well, you certainly want the kind of tech 0:22:36.680 --> 0:22:41.199 proficiency and engineering proficiency to improve your I improve your US, 0:22:41.320 --> 0:22:44.800 be able to do customization, personalization, all those things. It's interesting. 0:22:44.800 --> 0:22:47.640 I had one of our senior engineers um in from 0:22:47.640 --> 0:22:51.439 Seattle yesterday and I said to him, when when you 0:22:51.480 --> 0:22:55.440 talk about recruitment, which is obviously very competitive in the valley, 0:22:55.480 --> 0:22:58.960 what is the number one recruitment tool for you when 0:22:58.960 --> 0:23:02.320 you're bringing people into our house, Because you know there's 0:23:02.359 --> 0:23:05.280 there's obviously many many places for talented engineers to go. 0:23:05.320 --> 0:23:09.320 And you said, the brand, And it's a terrific opportunity 0:23:09.480 --> 0:23:12.640 um for engineers to come into HBO and to move 0:23:12.720 --> 0:23:16.960