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Speaker 1: Welcome to Tech Stuff, a production from I Heart Radio.

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Speaker 1: Hey there, and welcome to tech Stuff. I'm your host,

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Speaker 1: Jonathan Strickland. I'm an executive producer with iHeart Radio and

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Speaker 1: I love all things tech and it is time for

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Speaker 1: a classic episode. And this is gonna be a doozy

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Speaker 1: because it's actually a three partner. So for the next

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Speaker 1: three weeks, we're going to have some classic episodes play

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Speaker 1: out over a full story and it's one that, uh

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Speaker 1: that you know continues today. This is the HBO story.

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Speaker 1: And obviously a lot has happened with HBO since I mean,

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Speaker 1: there's HBO Max. That alone deserves a full episode. But

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Speaker 1: let's learn about how HBO and the cable industry really

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Speaker 1: were tightly knit back in the early days. And uh,

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Speaker 1: what better way to do it than to jump right

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Speaker 1: in here we HBO Home Box Office. That is what

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Speaker 1: we are talking about for the next three episodes because

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Speaker 1: there's so much history involved and and I never realized

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Speaker 1: it before we started researching this, but if it weren't

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Speaker 1: for some of the people who were working in HBO's

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Speaker 1: early days, we might not have cable TV or or

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Speaker 1: satellite cable as we know it, right, Yeah, For example,

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Speaker 1: all those other basic cable stations that you are familiar

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Speaker 1: with may not have existed had it not been for

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Speaker 1: some of the efforts on the part of multiple players

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Speaker 1: in the story. And also some of the other issues

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Speaker 1: everything from scrambling signals to piracy to streaming online. All

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Speaker 1: of these things come into play with HBO and and

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Speaker 1: original content as many many of you statistically probably know, yes,

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Speaker 1: whether whether you are subscribers or the other type. So

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Speaker 1: we're going to um, we're gonna have to journey back

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Speaker 1: in time. So yeah, I know, we just we just

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Speaker 1: tossed it off recently, but it's gonna getta workout. Let's

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Speaker 1: file into the way back machine. As it turns out,

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Speaker 1: we're gonna have to go back way before HBO was founded,

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Speaker 1: all the way back to nineteen twenty two. So let's

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Speaker 1: let's just set that right here, and uh push the button.

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Speaker 1: Lauren pushed. All right, here we are sunny nineteen two.

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Speaker 1: N's when Henry Loose and Brittain hadn't decided to u,

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Speaker 1: you know, pack it up. They had been working for

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Speaker 1: the Baltimore News and they decided they didn't want to

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Speaker 1: do that anymore. They cut their ties, said their goodbyes

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Speaker 1: and went to the Big Apple. Because if you can

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Speaker 1: make it there, well you know the rest. So they

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Speaker 1: had this crazy idea they wanted together to launch a

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Speaker 1: brand new magazine with the title of Time, and they

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Speaker 1: got about eighty five dollars and startup money from initial

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Speaker 1: stockholders and uh and incorporated in that November of nineteen two.

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Speaker 1: That's right, So the very first issue of the magazine

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Speaker 1: launched on March third, nineteen twenty three. Now, this company

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Speaker 1: would actually debut lots of other titles. It wasn't just Time.

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Speaker 1: Time was the starting point. But then they also launched

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Speaker 1: Fortune in nineteen thirty, which was a year after the

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Speaker 1: great stock market crash of nineteen twenty nine when a

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Speaker 1: lot of people lost their fortunes. UH. They also launched

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Speaker 1: Life in nineteen thirty six. The magazine Life, the actual

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Speaker 1: you know, point of existence, had existed for billions of

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Speaker 1: years we know, yes, at least on Earth, perhaps longer

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Speaker 1: in other places, but the magazine itself didn't come into

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Speaker 1: existence till nineteen thirty six. And then, of course the

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Speaker 1: most important magazine of all time nineteen fifty four, Sports Illustrated.

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Speaker 1: I've never read a single issue I know, of sports.

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Speaker 1: But it's pretty it's pretty big. All of these are

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Speaker 1: pretty big. The company has certainly become a print media giant,

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Speaker 1: and I mean, at the time was a print media

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Speaker 1: giant and would go on to become an other media giants, right,

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Speaker 1: because why why would you limit yourself to print media?

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Speaker 1: They wanted to diversify. So moving into the nineteen sixties,

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Speaker 1: just just come along with us. The nice thing about

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Speaker 1: the way back machines that lets us go forward in

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Speaker 1: time much faster than backward. We don't even have to

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Speaker 1: get into it. So nineteen sixties, Time Incorporated starts looking

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Speaker 1: at a way of getting into this crazy television business

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Speaker 1: to branch out from print media, and so as doing that,

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Speaker 1: they looked at a little company called Sterling Communications and

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Speaker 1: they bought up a twenty steak. In that company, there

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Speaker 1: was a man running that by the name of Chuck Dolan,

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Speaker 1: who um was it was a bit of a visionary, Yeah, oh,

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Speaker 1: huge visionary. He's talked about sometimes. I mean, despite the

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Speaker 1: fact that he's kind of unassuming and and pretty off

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Speaker 1: spoken and doesn't really he's not a public figure the

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Speaker 1: way that some of our other tech visionaries are. I mean,

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Speaker 1: he's not he doesn't have the stage presence of say

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Speaker 1: a Steve job, but nonetheless, without him, we probably would

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Speaker 1: not have cable TV as we know it. Um He

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Speaker 1: was born in Cleveland and served in the Air Force,

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Speaker 1: dropped out of John Carroll University and started up a

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Speaker 1: company that edited sports reels for TV syndication. Eventually he

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Speaker 1: sold that and moved to New York where he founded

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Speaker 1: Sterling in nineteen sixty. Yeah, that little company where he

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Speaker 1: was adding sports footage. He did that out of his home.

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Speaker 1: He and his wife, He and his wife in Cleveland,

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Speaker 1: in their house, ran this entire company UM and and

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Speaker 1: sold it for enough money that he was able to

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Speaker 1: found a cable television company. And at the time, cable

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Speaker 1: was not what it is today, right. Yeah. In fact,

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Speaker 1: cable at that time was really meant to deliver broadcast

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Speaker 1: television as an over the air television. This is the

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Speaker 1: stuff that normally you would put an antenna on top

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Speaker 1: of your TV or perhaps on top of your home

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Speaker 1: or apartment building, and you would get signals over the

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Speaker 1: air which would then run down to your television. A

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Speaker 1: lot of people considered this free television. It's not like

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Speaker 1: you had to subscribe to it. However, it's ad supported TV,

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Speaker 1: I'm sure, and I mean nothing's nothing's free there in

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Speaker 1: its freelance. Yeah, so even public television that exists on

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Speaker 1: on grants and donations, the other commercial TV that existed

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Speaker 1: through ads supported. But anyway, the issue was that in

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Speaker 1: rural areas you couldn't necessarily get a good signal because

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Speaker 1: if you did not live near a transmission tower, the

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Speaker 1: transmission tower might not have enough power to put out

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Speaker 1: there so that you could get the same sort of

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Speaker 1: content that you could if you lived closer. Al Right,

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Speaker 1: So cable stations were really just ways of getting TV,

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Speaker 1: regular old broadcast airway TV out to those rural areas exactly.

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Speaker 1: It didn't exist in big cities like New York, right,

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Speaker 1: because the thing about New York was that you happen

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Speaker 1: to live really close to all those transmission towers. Yeah,

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Speaker 1: everything was being broadcast out of the Empire State Building basically.

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Speaker 1: Except the thing is is that New York has other skyscrapers,

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Speaker 1: and if you lived, say behind a skyscraper, you might

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Speaker 1: not I mean you absolutely wouldn't be able to get

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Speaker 1: that signal from that tower. Right. If you got a

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Speaker 1: signal at all, it would be really weak, so you

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Speaker 1: would have lousy reception, which meant that there were people

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Speaker 1: in New York who might live a few blocks away

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Speaker 1: from the Empire State Building, but their reception on their

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Speaker 1: televisions were worse than what you might see in the

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Speaker 1: suburbs in New Jersey. You can get a better in Jersey.

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Speaker 1: Why why you come on? Look, you gotta pay to

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Speaker 1: get out of Jersey. Why would you have to You

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Speaker 1: know that that was the way they got you. You

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Speaker 1: have to pay to get out. So then you're like, well,

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Speaker 1: I get better TV over here. Anyway, I'll just stay

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Speaker 1: in Jersey. I apologize everyone for starting Jonathan on that.

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Speaker 1: I promise I won't I won't continue. I apologize as

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Speaker 1: well that at any rate, this is exactly the case.

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Speaker 1: So what Dolan thought was, why don't I bring cable

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Speaker 1: into the city. That way we can have the same

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Speaker 1: single over cable and even if you live right behind

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Speaker 1: a skyscraper, you're still going to have great reception. Sure.

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Speaker 1: The thing is that it's really I mean, it was

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Speaker 1: and still is really expensive to late this cave. We

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Speaker 1: we're talking copper cable at the time. By the way,

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Speaker 1: fiber optics wouldn't come into the picturing until the nineteen eighties. Yeah.

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Speaker 1: And not only that, but it was in New York.

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Speaker 1: They had had a blizzard several decades earlier that had

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Speaker 1: wiped out a lot of the power lines and and

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Speaker 1: telephone lines, and as a result, city officials said, hey,

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Speaker 1: you guys, you're gonna have to bury this. Everything has

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Speaker 1: to be buried so that way we will never have

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Speaker 1: an outage on this scale ever again, which meant that

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Speaker 1: the cable that Dolan was gonna lay would have to

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Speaker 1: be underground. Two. This meant that per mile of cable minimum,

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Speaker 1: you'd have to spend ten thousand dollars per mile. Now

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Speaker 1: in New York to get those uh apartment buildings, those

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Speaker 1: high rise apartment buildings wired, you have to build a

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Speaker 1: cable through the apartment building to eat with a branch

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Speaker 1: to each unit, right, that's the only way you could

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Speaker 1: do it. That made it go up to around three

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Speaker 1: hundred thousand dollars per mile. And this is in nineteen

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Speaker 1: sixties dollars. We're not talking about adjusting for inflation here,

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Speaker 1: so this is really expensive stuff. And Dolan, you know,

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Speaker 1: this was a very ambitious plan. And Dolan saw the

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Speaker 1: long tail, right, He saw that this could be profitable,

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Speaker 1: but it was going to require a lot of work,

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Speaker 1: and it perhaps more work than he anticipated when he

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Speaker 1: first got into the business. Yeah, Sterling almost certainly would

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Speaker 1: have gone bankrupt if it hadn't been for times investment

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Speaker 1: in them at that at that time. Exactly, So you're

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Speaker 1: gonna say the word time as many times. There's no

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Speaker 1: way of avoiding it. Uh, just wait till Warner gets

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Speaker 1: in there, because I use that word all the time.

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Speaker 1: Nineteen seventy one. So, still trying to make Sterling Communications

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Speaker 1: a profitable company, Dolan begins to brainstorm ideas that would

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Speaker 1: convince subscribers to join on to this, to to actually

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Speaker 1: willingly become a customer of cable, because again you have

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Speaker 1: to convince people, Hey, I know you could get this

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Speaker 1: free over the air on your antenna, but the reception

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Speaker 1: is lousy. Pay for it on cable, you'll get it.

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Speaker 1: You'll get a great experience. And the people who they

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Speaker 1: were contacting we're saying, but why would I Why what

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Speaker 1: I do that? Yeah? I mean yeah, the stuff I

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Speaker 1: get over the air is lousy. But if it's going

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Speaker 1: to be the same thing, just better quality on cable,

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Speaker 1: I feel like I'm getting the rough end of the

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Speaker 1: deal here if I have to pay for it. So

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Speaker 1: he says, what what can I do to differentiate cable

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Speaker 1: to make it more more attractive? Ah? What if we

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Speaker 1: made a special channel just for cable. It's not for

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Speaker 1: over the air, Only people who are subscribers to the

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Speaker 1: cable will get it. And it has to be something

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Speaker 1: that's really really compelling, something maybe that carries a lot

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Speaker 1: of sports with it. That was his first approach, and

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Speaker 1: he called this idea the Green Channel. He he referred

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Speaker 1: to it and as the Macy's of television. And this

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Speaker 1: was not an entirely new idea. Actually, our CIA had

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Speaker 1: created a radio network specifically to give people a reason

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Speaker 1: to go out and buy our Cia radios. So why

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Speaker 1: would you buy something where there's no content? This is

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Speaker 1: sort of the argument people have about four K televisions

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Speaker 1: right now. Why would you go out and get a

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Speaker 1: four K TV? No? Same argument. That argument has been

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Speaker 1: around ever since we started making this kind of tech.

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Speaker 1: Oh yeah, and and understand that at the time there

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Speaker 1: was some programming on cable stations, but most of it

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Speaker 1: was either extremely load budget or or very local, like

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Speaker 1: a clock streaming the local Time, or just weather reports

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Speaker 1: or at the very best public access, although that didn't

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Speaker 1: become a mandatory thing, uh, you know, branching into the

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Speaker 1: Wayne's World kind of kind of end of the deal

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Speaker 1: until after the FCCS Telecommunications Act of two, wherein they

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Speaker 1: said that any station that had more than subscribers had

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Speaker 1: to have public access content. Yeah at this time, but

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Speaker 1: but not even that. I mean we did not even

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Speaker 1: have Wayne's World, so that it was not Party Time,

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Speaker 1: It was not excellent, it was not and nor Anton jessp.

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Speaker 1: We had no doctor Anton Jessip. That's no. I don't

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Speaker 1: want to imagine a world where there's no Anton Jessip.

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Speaker 1: But so so it was considered a very commercially unviable

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Speaker 1: space exactly. Yeah, this was really again just an alternative

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Speaker 1: to deliver broadcast over the air TV. It wasn't thought

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Speaker 1: of as a way to create new types of content,

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Speaker 1: and also very regionalized, very much spread out and separated.

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Speaker 1: Like we didn't have these massive cable companies that had

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Speaker 1: enormous networks. You had all these different, smaller regional companies

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Speaker 1: that serviced little rural areas. And so even if you

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Speaker 1: wanted to launch a big idea like a big program.

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Speaker 1: Let's say that it's a company that's out in the

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Speaker 1: middle of nowhere, in the in the middle of a

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Speaker 1: state where there's hardly anything else, and they think, we've

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Speaker 1: got a great idea of our show. We're gonna produce

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Speaker 1: a show. They might only be able to deliver that

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Speaker 1: show to a very small audience because it wasn't a

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Speaker 1: nationwide network. So very different world than the one we

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Speaker 1: live in now. So how do you make the Green

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Speaker 1: Channel a must buy product? You know, we had a

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Speaker 1: lot of these attempts to make pay television channels before,

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Speaker 1: but they had failed. And again that over the air

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Speaker 1: for free model was very compelling. Well, nineteen seventy two,

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Speaker 1: Dolan decides to pitch this idea to Time, which had

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Speaker 1: invested in Sterling Communications. Right. He wound up talking with

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Speaker 1: one of their lawyers, a man named Jerry Levin, and

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Speaker 1: the two convinced the company to take on the idea. Yeah,

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Speaker 1: and so, fifty years after the founding of Time Incorporated,

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Speaker 1: remember those back in ninety two. Now we're in nineteen

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Speaker 1: seventy two, Time Incorporated launches a new cable television channel.

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Speaker 1: They had taken the Green Channel idea. They renamed it

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Speaker 1: after a series of long and arduous meetings, and they

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Speaker 1: figured that this name wouldn't really stick for that long

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Speaker 1: because it was pretty lame. Yeah, this was supposed to

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Speaker 1: just be a temporary kind of placeholder home box office.

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Speaker 1: That was the name HBO for short. They thought, will

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Speaker 1: will home box office until we figure out something better.

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Speaker 1: They never figured out anything better, and they went with it.

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Speaker 1: Uh So this was again the idea originally was a

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Speaker 1: paid television premium channel that would carry uncut, uncensored movies

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Speaker 1: that you wouldn't find on broadcast television, plus a few

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Speaker 1: live sports events from Madison Square Gardener Right, So again

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Speaker 1: very new thing. The cable television itself did not have

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Speaker 1: that many subscribers, and they in time, was not ready

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Speaker 1: to commit full on with this, you know, and so

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Speaker 1: they said, well, let's find a test market. Let's look

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Speaker 1: around and see if we can figure out what we can,

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Speaker 1: you know, how to develop the strategy to make sure

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Speaker 1: it works before we really throw in. And they did

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Speaker 1: have on their side the fact that TV execs were

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Speaker 1: eager for a way to make television unfree. I mean,

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Speaker 1: you know, if if you can turn a profit on

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Speaker 1: something that's always better than giving it away for free

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Speaker 1: and UM and stealing cable is a lot harder than

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Speaker 1: it is to steal signals out of thin air, right, Yeah,

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Speaker 1: if you were just broadcasting this over the air, then

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Speaker 1: obviously anyone with an antenna could get at it. There'd

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Speaker 1: have to be some other kind of scrambling thing. And

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Speaker 1: we'll talk about scrambling later on in another episode. Sure,

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Speaker 1: But okay, So, so this test market wound up being

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Speaker 1: UM in Pennsylvania and New York. Yeah, so the very

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Speaker 1: first one was just Wilkes bar Pennsylvania, tiny community like people. Yeah, yeah,

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Speaker 1: we're talking. I mean, I think they had four hundred

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Speaker 1: subscribers at first. I think three five was the estimate,

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Speaker 1: and I saw a title so even even fewer than that.

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Speaker 1: But the reason for that, uh, well, they wanted to

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Speaker 1: do Wilkes Barre Pennsylvania mainly because one of the big

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Speaker 1: partnerships that Time had struck was with the NBA, and

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Speaker 1: the idea was to be able to cover NBA games

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Speaker 1: live so that people who wouldn't have access to that

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Speaker 1: kind of programming could actually watch it live and that

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Speaker 1: would be really exciting and be a good reason to

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Speaker 1: subscribe to the service. However, the NBA, like a lot

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Speaker 1: of different sporting organizations, has blackout rules where where they

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Speaker 1: don't want you to uh to publish too broadcast, broadcast

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Speaker 1: a game within a certain radius of the stadium where

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Speaker 1: it's being played exactly. And so if they had launched

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Speaker 1: in say Alan Town or Philadelphia, that would have been

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Speaker 1: in the radius for all the Philadelphia teams. So they said, well,

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Speaker 1: why don't we do Wilkes Bar. It's just outside that radius.

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Speaker 1: We're not going to be hit by any blackout dates.

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Speaker 1: It'll be the best possible experience and that will give

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Speaker 1: us the test that we need that can be used

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Speaker 1: as word of mouth. So subscriptions six dollars per month

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Speaker 1: for HBO. So uh it goes live on November eighth,

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Speaker 1: ninety two. And the very first movie carried on HBO

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Speaker 1: was titled Sometimes a Great Notion, A fantastic film about logging. Yeah,

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Speaker 1: Henry Fondo was in it and Paul Newman was in it,

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Speaker 1: and it was really a story about individualism and being

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Speaker 1: able to strike out on your own and to survive

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Speaker 1: against odds both from nature and man. And I'm making

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Speaker 1: it sound way more exciting than what it really was.

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Speaker 1: But yes, that's that was the movie. And then the

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Speaker 1: other thing that they aired was a hockey game, not

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Speaker 1: an NBA after all that travel. Yeah, the NBA does

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Speaker 1: not tend to play in hockey games. Uh. This was

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Speaker 1: a game featuring the Rangers against the Canucks. And I

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Speaker 1: know you're all dying to know who won, Rangers five

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Speaker 1: to ALRIGHTMG spoilers. Yeah, well, you know, for those other

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Speaker 1: people who are using way back machineans of their own

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Speaker 1: to go back into nineteen seventy two and watch all

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Speaker 1: those games, forget I said that. So back in these

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Speaker 1: early years, the service would only be on the air

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Speaker 1: for a few hours each day. It was not a

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Speaker 1: twenty four hour channel, all right. They would sign off

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Speaker 1: at a certain point. Yeah. I actually watched the little

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Speaker 1: cartoon that used to play at the very end. It's

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Speaker 1: very cute. This is it's actually like several minutes long.

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Speaker 1: It wasn't like a little twenty second thing. But it's

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Speaker 1: a cartoon showing, you know, lights going out in the

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Speaker 1: city and setting an alarm clock and fluffing a pillow.

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Speaker 1: And this is all cartoonish, right, all cartoons. It was

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Speaker 1: essentially saying good night, good night. Yeah, it was at

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Speaker 1: almost had a night veil moment again there. Boy, it

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Speaker 1: just creeps in, doesn't it. So meanwhile, on the back

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Speaker 1: on the corporate side of things, so so that's what's

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Speaker 1: going on on the actual television. On the corporate side

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Speaker 1: of things, you have Time Incorporated, and they had to

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Speaker 1: carve out space for this new uh, this new enterprise HBO.

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Speaker 1: So originally they started making space in their own office

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Speaker 1: building and Time Incorporated headquarters in New York, which was

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Speaker 1: already a bustling office. Yeah. So that meant that as

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Speaker 1: HBO began to grow, and it grew pretty quickly, Uh,

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Speaker 1: it meant that they had to start getting creative finding

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Speaker 1: places to stick people. So departments wouldn't necessarily be all

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Speaker 1: set together. You might have a department head who's on

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Speaker 1: a different floor from the rest of the office. Uh.

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Speaker 1: There were stories about people having to find an office

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Speaker 1: space in an old broom closet, or or four or

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Speaker 1: five people all sharing a common office area that used

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Speaker 1: to be a meeting room. That kind of stuff, things

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Speaker 1: that we can kind of identify with here at how

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Speaker 1: stuff works. But the interesting thing was that this actually

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Speaker 1: promoted a kind of camaraderie among the office workers. They

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Speaker 1: had a closeness and kind of a party atmosphere too.

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Speaker 1: Is this idea that we're all in it together, We're

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Speaker 1: doing this exciting thing. A lot of the people who

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Speaker 1: were working there were very young. It was. It was

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Speaker 1: a very happening, very startup kind of vibe in despite

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Speaker 1: the fact that it was being owned operated by this

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Speaker 1: very large company exactly that had been in business for

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Speaker 1: fifty years, and yet it had a very start up feel.

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Speaker 1: That's a very good way of putting it. We've got

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Speaker 1: so much more to say about HBO, but before we

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Speaker 1: get to that, let's take a quick break. All right,

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Speaker 1: we're back and it's nine. This was the year that

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Speaker 1: Time bought HBO outright from Chuck Dolan and the rest

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Speaker 1: of the Sterling investors. And poor Chuck Dolan, he must

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Speaker 1: have I mean, he must have really missed out on everything,

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Speaker 1: right that just uh yeah, no, no not but the

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Speaker 1: the the opposite of that. In fact, if we can

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Speaker 1: set the way back machine to be the way forward

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Speaker 1: machine for just a second, I'll just get on in

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Speaker 1: here and you just you keep going, I'm gonna I'm

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Speaker 1: gonna work on this, okay, okay. So Dolan would would

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Speaker 1: use this buyout money to found Cable Vision, which would

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Speaker 1: make him billions. Today, it is the largest cable provider

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Speaker 1: in the New York metro area, along with its spinoffs

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Speaker 1: like AMC and i f C, the two very popular

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Speaker 1: channels which you might know from everything from using your

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Speaker 1: remote control. Yeah, well, walking Dead and etcetera. Madman Um

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Speaker 1: and his resulting properties like Madison Square Garden and the

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Speaker 1: New York Nixon Rangers. This from a guy who had

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Speaker 1: a little business out of his kitchen right in Cleveland. Cleveland. Boy,

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Speaker 1: So he's he's still kicking as at this podcast. He's

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Speaker 1: worth some three point six billion. He has six children

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Speaker 1: who um more or less run a lot of his empire.

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Speaker 1: And it's a huge success story. And someday he's a

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Speaker 1: very interesting person and I would really like to do

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Speaker 1: more on him and or Cablevision and or all of that. Yeah,

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Speaker 1: but okay, back in, I just got this thing fixed

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Speaker 1: to go for Oh forget it, We'll just stay here, Okay, alright, So,

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Speaker 1: uh seventy three, Jerry Levin continues working with the HBO brand,

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Speaker 1: but it only has about eight thousand subscribers, and uh

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Speaker 1: that's spread across maybe fourteen different cable operating systems, all

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Speaker 1: of which are still in Pennsylvania. Yeah, it still hasn't

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Speaker 1: moved into New York yet. So the big, the big

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Speaker 1: irony here is that it was possible because of the

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Speaker 1: stake in Sterling Communications, but that was based solely in

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Speaker 1: New York, and Sterling Communications did not yet carry HBO.

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Speaker 1: It was all still in Pennsylvania. Meanwhile, that same year,

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Speaker 1: nineteen seventy three, you saw several other pay television channels launch.

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Speaker 1: They had names like Star Channel from Warner Cable, Theater

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Speaker 1: Vision and Channel one. And if you're asking yourself, okay,

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Speaker 1: well where did those go? Yeah? Nowhere. Yeah they didn't.

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Speaker 1: They did not succeed. They did not, in the long

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Speaker 1: run survive, so but they it did show that HBO

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Speaker 1: was starting to kind of set a precedent, and other

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Speaker 1: other companies were thinking, how can we also capitalize on this?

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Speaker 1: They just hadn't quite figured out the best way of

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Speaker 1: doing it. Nineteen seventy four, we see HBO clawing its weight,

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Speaker 1: you know, just inch by inch, to fifty seven thousand

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Speaker 1: subscribers in Pennsylvania and finally also in New York, also

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Speaker 1: finally available on Sterling Communications. But now time had bought

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Speaker 1: out the rest of the interest in Sterling and it

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Speaker 1: renamed it Manhattan Cable so nine yeah. Yeah. In an

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Speaker 1: effort to reach an even broader audience, Levin convinced the

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Speaker 1: then president of Time to let HBO begin to deliver

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Speaker 1: content via satellite. And this was crazy. No one, no

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Speaker 1: one wanted to believe that this was going to work

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Speaker 1: at all. This is the very first television station in

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Speaker 1: the United States to use satellite as a means of distribution.

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Speaker 1: And it didn't mean that they were using satellite to

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Speaker 1: beam it two households that had satellite dishes, because because

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Speaker 1: satellite dishes at the time cost some seventy five thousand

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Speaker 1: dollars in that day's money, something your average homeowner probably

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Speaker 1: wasn't going to probably invest in. I wouldn't know. I

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Speaker 1: wouldn't have either. So what they were doing was sending

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Speaker 1: beaming the signal up to a satellite that would then

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Speaker 1: beam down to satellite receiver dishes that were owned by

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Speaker 1: other cable systems, all right, So the cable operator would

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Speaker 1: then send that signal out via cable. Right. Because originally

429
00:23:11,760 --> 00:23:15,439
Speaker 1: what these companies were doing was using microwave transmission, but

430
00:23:15,440 --> 00:23:18,280
Speaker 1: microwave transmission has a limited range and you need line

431
00:23:18,280 --> 00:23:20,919
Speaker 1: of sight for it to work. So in other words,

432
00:23:20,960 --> 00:23:24,480
Speaker 1: if you had even a really powerful microwave radio station

433
00:23:24,880 --> 00:23:27,760
Speaker 1: in say Pennsylvania, it's not going to reach all the

434
00:23:27,800 --> 00:23:30,719
Speaker 1: way out to the other side of the United States,

435
00:23:31,000 --> 00:23:34,800
Speaker 1: not without a bunch of relays exactly between exactly you'd

436
00:23:34,800 --> 00:23:37,840
Speaker 1: have to end line of sight relays. So getting those

437
00:23:37,920 --> 00:23:41,159
Speaker 1: rocky mountains be kind of tricky. But what they decided

438
00:23:41,160 --> 00:23:45,040
Speaker 1: to do was instead use geo stationary satellites. So geo

439
00:23:45,080 --> 00:23:48,600
Speaker 1: stationary orbit it means that the satellite is actually maintaining

440
00:23:48,600 --> 00:23:52,080
Speaker 1: its position above a specific point on the Earth. And

441
00:23:52,119 --> 00:23:55,600
Speaker 1: these satellites are way the heck out there. Okay, So

442
00:23:55,640 --> 00:23:58,399
Speaker 1: our satellites that we tend to think of in our

443
00:23:58,960 --> 00:24:00,719
Speaker 1: you know, the ones that, by the way, in the

444
00:24:00,800 --> 00:24:03,560
Speaker 1: in the biz, they're called birds. Apparently I did not

445
00:24:03,680 --> 00:24:06,159
Speaker 1: know that until I started reading all the information to

446
00:24:06,240 --> 00:24:08,959
Speaker 1: call them birds. So these birds up there, like if

447
00:24:08,960 --> 00:24:12,159
Speaker 1: you're talking about normal ones that just pass over in

448
00:24:12,400 --> 00:24:15,280
Speaker 1: low earth orbit, we're talking to maybe a hundred hundred

449
00:24:15,320 --> 00:24:17,439
Speaker 1: fifty miles out from the surface of the Earth, like

450
00:24:17,440 --> 00:24:21,240
Speaker 1: where the ISS is. Yeah, these these satellites, they don't

451
00:24:21,280 --> 00:24:23,680
Speaker 1: maintain a position directly over a point, you have to

452
00:24:23,720 --> 00:24:26,840
Speaker 1: go much further out. So the geo stationary UH satellites

453
00:24:26,880 --> 00:24:29,840
Speaker 1: that that HBO was interested in, we're twenty two thousand,

454
00:24:29,920 --> 00:24:33,960
Speaker 1: three hundred miles out. Because from that distance they had

455
00:24:34,160 --> 00:24:37,760
Speaker 1: a broadcast footprint that covered all of North America. So

456
00:24:37,920 --> 00:24:40,960
Speaker 1: with one satellite you could then being the signals that

457
00:24:41,000 --> 00:24:44,520
Speaker 1: could be picked up across the United States. Because the

458
00:24:44,520 --> 00:24:46,240
Speaker 1: further out you kind of think of it like a flashlight.

459
00:24:46,240 --> 00:24:49,080
Speaker 1: The further out you go, the more area it covers. Yeah, yeah, absolutely,

460
00:24:49,080 --> 00:24:51,240
Speaker 1: And I mean to put it in perspective, if you

461
00:24:51,240 --> 00:24:53,040
Speaker 1: remember from our A T and T episode, the very

462
00:24:53,080 --> 00:24:56,240
Speaker 1: first active communication satellite had only been launched like twelve

463
00:24:56,280 --> 00:24:59,639
Speaker 1: years earlier, in nineteen sixty two. So so although twelve

464
00:24:59,720 --> 00:25:03,919
Speaker 1: years a long time and technological thinking, that's still this

465
00:25:03,960 --> 00:25:06,480
Speaker 1: is this is cutting edge technology at the time. Exactly

466
00:25:06,720 --> 00:25:08,320
Speaker 1: no one else had done it yet. You know, no

467
00:25:08,320 --> 00:25:10,560
Speaker 1: one else had managed to do the television stuff yet

468
00:25:10,880 --> 00:25:16,200
Speaker 1: like HBO did. So they the technical term for beaming

469
00:25:16,200 --> 00:25:19,320
Speaker 1: it up, that's using the up link satellite to antenna.

470
00:25:19,440 --> 00:25:22,159
Speaker 1: So you're that's the transmission, use the up link to

471
00:25:22,160 --> 00:25:25,040
Speaker 1: send it up to the satellite. The satellite has transponders

472
00:25:25,080 --> 00:25:28,800
Speaker 1: on it, specifically that have been leased by whatever company

473
00:25:28,800 --> 00:25:32,840
Speaker 1: in this case HBO to then beam this amplify that

474
00:25:32,880 --> 00:25:35,160
Speaker 1: signal that it picks up, and then beam it back

475
00:25:35,200 --> 00:25:37,760
Speaker 1: down to the Earth. And then you have the down

476
00:25:37,840 --> 00:25:41,200
Speaker 1: link receiver dishes that capture that signal and then send

477
00:25:41,200 --> 00:25:43,960
Speaker 1: it onto the cable station for transmission. It might do

478
00:25:44,280 --> 00:25:47,199
Speaker 1: that might be transmitted over microwave at that point, depending

479
00:25:47,240 --> 00:25:49,840
Speaker 1: upon whether or not the receiving station and the cable

480
00:25:49,920 --> 00:25:53,399
Speaker 1: station are adjoining or if they're separated by several miles

481
00:25:53,480 --> 00:25:56,960
Speaker 1: or whatever. So that was the basic principle behind it,

482
00:25:57,520 --> 00:26:02,000
Speaker 1: and so on September was able to carry the Muhammad

483
00:26:02,000 --> 00:26:05,439
Speaker 1: Ali Joe Frasier boxing match also known as the Thrilla

484
00:26:05,560 --> 00:26:08,040
Speaker 1: in Manila. They were the only live carrier in the

485
00:26:08,160 --> 00:26:11,520
Speaker 1: US for for this programming, and the organizers time to

486
00:26:11,520 --> 00:26:14,560
Speaker 1: the fight to happen during East Coast prime time, and

487
00:26:14,600 --> 00:26:17,560
Speaker 1: so those Pennsylvania and New York subscribers who could already

488
00:26:17,640 --> 00:26:21,679
Speaker 1: enjoy HBO because it was being transmitted via microwave transmission

489
00:26:21,720 --> 00:26:25,320
Speaker 1: to to cable operators were joined by folks in Florida,

490
00:26:25,440 --> 00:26:28,480
Speaker 1: like fifteen thousand of them who were able to see

491
00:26:28,480 --> 00:26:31,560
Speaker 1: this simultaneously. Because of this, it actually could technically be

492
00:26:31,680 --> 00:26:35,120
Speaker 1: picked up across the entire United States, just whichever ones

493
00:26:35,160 --> 00:26:37,760
Speaker 1: were affiliated with HBO. Three towns in Florida. I think

494
00:26:37,760 --> 00:26:39,959
Speaker 1: we're the only ones that actually had the satellite down

495
00:26:40,040 --> 00:26:42,960
Speaker 1: link at that time. Yeah. So the thing was that

496
00:26:43,000 --> 00:26:45,879
Speaker 1: because HBO was able to do this, and because they could,

497
00:26:46,200 --> 00:26:48,000
Speaker 1: they could back up the claim that they could do

498
00:26:48,040 --> 00:26:50,280
Speaker 1: this to anywhere in the United States that happened to

499
00:26:50,320 --> 00:26:54,159
Speaker 1: have cable service as long as the cable operator carried HBO.

500
00:26:54,720 --> 00:26:56,879
Speaker 1: So if they partner with us, we can let you

501
00:26:57,000 --> 00:26:59,800
Speaker 1: see this stuff too. It ended up being a huge boon.

502
00:26:59,880 --> 00:27:03,480
Speaker 1: In fact, uh there there are reports that if someone

503
00:27:03,560 --> 00:27:06,119
Speaker 1: came out to install cable in a neighbor's house and

504
00:27:06,160 --> 00:27:08,640
Speaker 1: other neighbors notice, they would chase down the cable car,

505
00:27:09,480 --> 00:27:11,639
Speaker 1: don't see HBO on the side of the van, and

506
00:27:11,680 --> 00:27:14,240
Speaker 1: like run down the street and like knock on the side,

507
00:27:14,320 --> 00:27:16,240
Speaker 1: and so could you also hook me up? I would

508
00:27:16,240 --> 00:27:20,199
Speaker 1: love to have that too, So big big boost to HBO.

509
00:27:20,240 --> 00:27:23,240
Speaker 1: If it hadn't been for the satellite move, it probably

510
00:27:23,280 --> 00:27:26,080
Speaker 1: never would have gone much further than the regionalized pay

511
00:27:26,200 --> 00:27:29,240
Speaker 1: TV network that it was. Maybe eventually would have crept

512
00:27:29,359 --> 00:27:31,520
Speaker 1: further along, but it wouldn't be near where it is

513
00:27:31,560 --> 00:27:34,320
Speaker 1: now certainly. And by the end of nineteen seventy five,

514
00:27:34,400 --> 00:27:37,360
Speaker 1: they had more than three hundred thousand subscribers in sixteen

515
00:27:37,400 --> 00:27:41,160
Speaker 1: states to show for it. Furthermore, I mean, this really

516
00:27:41,240 --> 00:27:43,320
Speaker 1: proved that there was a lot of money and space

517
00:27:43,359 --> 00:27:46,399
Speaker 1: in the cable and satellite TV field. Yeah. And not

518
00:27:46,400 --> 00:27:49,720
Speaker 1: only did they prove that to their subscribers, they proved

519
00:27:49,760 --> 00:27:53,560
Speaker 1: it to competitors, all right, because in n Yeah, HBO

520
00:27:53,680 --> 00:27:56,920
Speaker 1: had a rival pop up, a rival known as Showtime.

521
00:27:57,280 --> 00:28:00,400
Speaker 1: Now here's an interesting thing to me, Lauren. Uh. When

522
00:28:00,400 --> 00:28:03,000
Speaker 1: I started doing the research for this episode and we

523
00:28:03,040 --> 00:28:06,720
Speaker 1: started building out these notes, I did not realize that

524
00:28:06,920 --> 00:28:09,080
Speaker 1: HBO dated all the way back to nineteen seventy two.

525
00:28:09,160 --> 00:28:11,600
Speaker 1: Nor did I realize that Showtime dated back to nineteen

526
00:28:11,640 --> 00:28:15,000
Speaker 1: seventy six, probably because I didn't have cable as a

527
00:28:15,080 --> 00:28:18,160
Speaker 1: kid until I was at least seven or eight years old. Uh.

528
00:28:18,320 --> 00:28:20,760
Speaker 1: And and so to me, and and we didn't have Showtime.

529
00:28:20,800 --> 00:28:24,840
Speaker 1: We did get HBO. But to me, I always thought

530
00:28:24,840 --> 00:28:27,080
Speaker 1: of this, why it must have been late seventies, maybe

531
00:28:27,080 --> 00:28:29,119
Speaker 1: early eighties. I didn't realize that it was actually much

532
00:28:29,160 --> 00:28:33,240
Speaker 1: older than that. Now, if you subscribe to HBO, you

533
00:28:33,320 --> 00:28:37,439
Speaker 1: know that there aren't any commercials there. Well, this is

534
00:28:37,440 --> 00:28:39,840
Speaker 1: an HBO, folks. We're going to take an ad break,

535
00:28:39,920 --> 00:28:50,720
Speaker 1: but we'll be right back now. Showtime very similar in

536
00:28:50,800 --> 00:28:54,480
Speaker 1: concept to HBO. It also would run uncut, uncensored movies.

537
00:28:54,760 --> 00:28:58,360
Speaker 1: In fact, HBO and Showtime would often have a very similar,

538
00:28:58,400 --> 00:29:01,480
Speaker 1: if not nearly identical, list of movies that they could

539
00:29:01,560 --> 00:29:04,720
Speaker 1: run at any given time at this early beginning stage, Yes, yea,

540
00:29:04,880 --> 00:29:08,760
Speaker 1: and some would argue moving forward, same thing, um within

541
00:29:08,800 --> 00:29:12,560
Speaker 1: two years, so Showtime would follow suit. It would follow

542
00:29:12,680 --> 00:29:16,880
Speaker 1: HBO's example and go nationwide with a satellite service, which

543
00:29:17,280 --> 00:29:19,680
Speaker 1: at that time had only been done by one other

544
00:29:19,760 --> 00:29:23,880
Speaker 1: channel besides HBO, which was ted Turner's superstation w TBS

545
00:29:23,960 --> 00:29:27,760
Speaker 1: also known as just TVs are Turner Broadcast System. So

546
00:29:27,880 --> 00:29:32,480
Speaker 1: TBS and HBO together were companies that made cable subscriptions

547
00:29:32,480 --> 00:29:35,360
Speaker 1: more attractive. Keep in mind it's still really expensive to

548
00:29:35,520 --> 00:29:38,480
Speaker 1: install cable into cities. It wasn't just New York that

549
00:29:38,520 --> 00:29:41,400
Speaker 1: was a special case. That was an example that was

550
00:29:41,840 --> 00:29:46,760
Speaker 1: mirrored in cities across the United States. So although supposedly

551
00:29:47,440 --> 00:29:50,480
Speaker 1: Ted Turner and and TVs got into the game because

552
00:29:50,640 --> 00:29:55,200
Speaker 1: he heard about HBO mostly after that that big prize

553
00:29:55,200 --> 00:29:58,640
Speaker 1: fight had occurred. Legend has it that someone said, yeah,

554
00:29:58,680 --> 00:30:01,360
Speaker 1: someone convinced time to to use the satellite hook up

555
00:30:01,720 --> 00:30:04,920
Speaker 1: and they're and they're getting the fight live. It's on HBO,

556
00:30:05,080 --> 00:30:08,360
Speaker 1: and he was like, what's an HBO, which was a

557
00:30:08,360 --> 00:30:11,000
Speaker 1: common refrain at the time. Apparently right in those early

558
00:30:11,080 --> 00:30:14,320
Speaker 1: days before that boom, no one had really heard of it,

559
00:30:14,360 --> 00:30:17,560
Speaker 1: but everyone was fascinated once they did, because again, in

560
00:30:17,600 --> 00:30:20,920
Speaker 1: those early days, it was only available to a few

561
00:30:20,960 --> 00:30:24,320
Speaker 1: tens of thousands of people. So if you didn't live

562
00:30:24,320 --> 00:30:26,520
Speaker 1: in one of those regions that that was currently served

563
00:30:26,560 --> 00:30:30,000
Speaker 1: by HBO, why would you have heard of it. So, yeah,

564
00:30:30,000 --> 00:30:32,000
Speaker 1: it was one of those things where Turner ended up

565
00:30:32,080 --> 00:30:35,320
Speaker 1: jumping on that that strategy, even though he had not

566
00:30:35,400 --> 00:30:37,920
Speaker 1: really heard of the the channel that had already done it.

567
00:30:38,480 --> 00:30:41,520
Speaker 1: It's also why we all got to enjoy Georgia Championship Wrestling,

568
00:30:41,640 --> 00:30:45,800
Speaker 1: So thank you, Mr Turner. Um. So, then uh, we

569
00:30:45,840 --> 00:30:48,760
Speaker 1: start seeing some competition showing up with showtime there and

570
00:30:48,800 --> 00:30:51,920
Speaker 1: some actual competition that that lasts. It's not like those

571
00:30:51,960 --> 00:30:54,680
Speaker 1: other channels we mentioned earlier that faded away. Yeah, that

572
00:30:54,720 --> 00:30:57,480
Speaker 1: made it go into it and didn't succeed. So nineteen

573
00:30:57,640 --> 00:31:01,160
Speaker 1: seventy seven, HBO, for the first time since it started

574
00:31:01,200 --> 00:31:04,760
Speaker 1: the nineteen two turns a profit, which not again not

575
00:31:04,880 --> 00:31:08,360
Speaker 1: very surprising. You've got a lot of money that has

576
00:31:08,400 --> 00:31:10,120
Speaker 1: to go out from HBO for it to be able

577
00:31:10,160 --> 00:31:12,640
Speaker 1: to run its business. It had to pay licensing fees

578
00:31:12,680 --> 00:31:15,160
Speaker 1: to movie studios in order to get the rights to

579
00:31:15,200 --> 00:31:18,480
Speaker 1: show the movies on HBO. So it had to spend

580
00:31:18,480 --> 00:31:20,640
Speaker 1: money in order to even have content, and then it

581
00:31:20,720 --> 00:31:23,040
Speaker 1: had to try and make that up in subscriptions. Also,

582
00:31:23,080 --> 00:31:25,760
Speaker 1: all of that infrastructure was certainly not cheap, right, So

583
00:31:25,960 --> 00:31:28,400
Speaker 1: while HBO probably didn't have to put the bill for

584
00:31:28,440 --> 00:31:30,959
Speaker 1: most of that, considering that they would partner with cable companies,

585
00:31:31,000 --> 00:31:33,920
Speaker 1: they had to convince cable companies to go through the

586
00:31:34,000 --> 00:31:38,360
Speaker 1: trouble of installing all that cable into major metropolitan areas,

587
00:31:38,920 --> 00:31:41,920
Speaker 1: uh in order to have a larger subscription base, right,

588
00:31:41,960 --> 00:31:44,520
Speaker 1: I mean, they had to say, like, hey, cable company

589
00:31:44,560 --> 00:31:48,560
Speaker 1: that services Nashville, Tennessee, you want to put cable in

590
00:31:48,600 --> 00:31:50,480
Speaker 1: all your homes. I know that it's a lot of money,

591
00:31:50,560 --> 00:31:53,480
Speaker 1: poor concrete and build a nine foot dish to get

592
00:31:53,480 --> 00:31:56,600
Speaker 1: a satellite down link so that you can run, you know,

593
00:31:57,400 --> 00:32:00,920
Speaker 1: dollars worth of cable per mile these homes. But just

594
00:32:01,040 --> 00:32:02,960
Speaker 1: keep in mind that over the long term you're gonna

595
00:32:02,960 --> 00:32:05,680
Speaker 1: make lots of money. So that was an argument they

596
00:32:05,680 --> 00:32:08,000
Speaker 1: had to make over and over again. They got really

597
00:32:08,040 --> 00:32:11,440
Speaker 1: good at making that argument. Also, in ninety seven, a

598
00:32:11,520 --> 00:32:14,440
Speaker 1: law your name Michael Fooks came over to HBO from

599
00:32:14,480 --> 00:32:19,160
Speaker 1: the William Morris Agency. He'll be pretty important later on

600
00:32:19,240 --> 00:32:22,400
Speaker 1: in the story. That's why I decided to mention when

601
00:32:22,480 --> 00:32:25,640
Speaker 1: he showed up. Sure, absolutely, um, but at the time

602
00:32:25,680 --> 00:32:29,680
Speaker 1: in so, at this point, HBO has about one point

603
00:32:29,760 --> 00:32:35,160
Speaker 1: five million subscribers, but they are losing tens of thousands. Yeah,

604
00:32:35,400 --> 00:32:39,520
Speaker 1: because of a pretty nasty business move on the part

605
00:32:39,600 --> 00:32:43,160
Speaker 1: of Showtime. So here's the thing about the cable business, y'all.

606
00:32:44,080 --> 00:32:49,720
Speaker 1: It's it's not polite. This is it is a competitive,

607
00:32:51,080 --> 00:32:54,800
Speaker 1: cutthroat business, so that the gloves are off. Yeah. No,

608
00:32:55,640 --> 00:32:59,479
Speaker 1: we've seen this in multiple ways, both as consumers and

609
00:32:59,520 --> 00:33:00,960
Speaker 1: on the other side. I mean, there are a lot

610
00:33:00,960 --> 00:33:03,400
Speaker 1: of considerations you have to make when you're running a

611
00:33:03,400 --> 00:33:06,240
Speaker 1: cable business, whether you're an operator, there are a lot

612
00:33:06,280 --> 00:33:09,160
Speaker 1: of of considerations you have to make, or if you're

613
00:33:09,280 --> 00:33:12,000
Speaker 1: a content creator, there are a lot of considerations you

614
00:33:12,040 --> 00:33:15,840
Speaker 1: have to make. Absolutely um and so okay, so so Showtime.

615
00:33:16,160 --> 00:33:20,080
Speaker 1: Showtime's parent company was Viacom. Yeah, big big company, big

616
00:33:20,120 --> 00:33:22,640
Speaker 1: competitor to Time, and they had made a deal with

617
00:33:22,680 --> 00:33:26,080
Speaker 1: a cable provider called Teleprompter, which was the largest cable

618
00:33:26,120 --> 00:33:30,360
Speaker 1: operator in the United States, to be their exclusive pay

619
00:33:30,400 --> 00:33:35,080
Speaker 1: TV movie channel, which meant that any Teleprompter subscriber could

620
00:33:35,120 --> 00:33:37,720
Speaker 1: get Showtime, but would not be able to get HBO

621
00:33:38,320 --> 00:33:40,280
Speaker 1: even if they wanted it. It was not an option.

622
00:33:40,640 --> 00:33:43,400
Speaker 1: So that meant that HBO was suddenly cut off from

623
00:33:43,400 --> 00:33:47,360
Speaker 1: a large portion of potential customers. So what does Time

624
00:33:47,400 --> 00:33:52,200
Speaker 1: Incorporated do? They purchase American Television and Communications Corporation, which

625
00:33:52,240 --> 00:33:54,680
Speaker 1: was the second largest cable system operator in the US.

626
00:33:55,360 --> 00:33:59,560
Speaker 1: They were hoping that perhaps the six thousand or so

627
00:34:00,000 --> 00:34:05,760
Speaker 1: Steamers would also subscribe to HBO, and HBO also continue

628
00:34:05,800 --> 00:34:08,880
Speaker 1: to add premium films to its collection, making some pretty

629
00:34:08,920 --> 00:34:13,760
Speaker 1: interesting business deals. They were able to negotiate a block

630
00:34:13,920 --> 00:34:18,000
Speaker 1: of forty MGM and United Artists titles for about thirty

631
00:34:18,040 --> 00:34:21,200
Speaker 1: five million dollars. Now, these were titles that were movies.

632
00:34:21,239 --> 00:34:23,239
Speaker 1: Some of them hadn't come out yet, so this was

633
00:34:23,280 --> 00:34:25,840
Speaker 1: just kind of a you know, here's thirty five million,

634
00:34:26,000 --> 00:34:29,400
Speaker 1: we want to be able to grab forty titles that

635
00:34:29,440 --> 00:34:32,239
Speaker 1: you guys come up with, right right. They were investing

636
00:34:32,280 --> 00:34:35,520
Speaker 1: in pre production in return for exclusive rights to these films,

637
00:34:35,680 --> 00:34:38,600
Speaker 1: um and it was a huge gamble because you don't

638
00:34:38,600 --> 00:34:40,280
Speaker 1: know if that film is going to be a flop

639
00:34:40,360 --> 00:34:41,799
Speaker 1: or not. You you don't know if people are going

640
00:34:41,800 --> 00:34:45,000
Speaker 1: to want to subscribe to your service. Right right, You

641
00:34:45,080 --> 00:34:47,520
Speaker 1: might be like, wow, HBO has exclusive rights to some

642
00:34:47,600 --> 00:34:52,160
Speaker 1: of the worst movies I've ever had in fever. That's great. Yeah, sorry,

643
00:34:52,200 --> 00:34:55,200
Speaker 1: Cabin Fever. I'm not sure where that came from, but yeah,

644
00:34:55,480 --> 00:34:57,840
Speaker 1: sometimes it paid off, sometimes it didn't. And in fact,

645
00:34:58,120 --> 00:35:00,400
Speaker 1: they also began to learn lessons down the line. One

646
00:35:00,400 --> 00:35:02,440
Speaker 1: of the early lessons they learned, actually I guess it

647
00:35:02,440 --> 00:35:04,320
Speaker 1: wasn't that early. One of the lessons they would eventually

648
00:35:04,400 --> 00:35:07,640
Speaker 1: learn is that they could set minimums for how much

649
00:35:07,680 --> 00:35:09,960
Speaker 1: money they would spend for a title. This was something

650
00:35:10,000 --> 00:35:12,640
Speaker 1: that was negotiated with the movie studio. So they might say,

651
00:35:12,960 --> 00:35:16,880
Speaker 1: all right, at minimum, will pay you fifty dollars for

652
00:35:16,920 --> 00:35:19,080
Speaker 1: this title. That's I'm just pulling a number out of

653
00:35:19,120 --> 00:35:21,640
Speaker 1: the air. By the way, that's not necessarily a real number.

654
00:35:22,000 --> 00:35:24,680
Speaker 1: But what they didn't think to do is set a

655
00:35:24,760 --> 00:35:29,560
Speaker 1: cap on how much ultimately a movie might be valued at.

656
00:35:29,960 --> 00:35:32,239
Speaker 1: And if they entered an agreement ahead of time to

657
00:35:32,320 --> 00:35:35,040
Speaker 1: purchase a certain number of movies from a certain studio,

658
00:35:35,640 --> 00:35:38,879
Speaker 1: and one of those movies becomes a runaway hit and

659
00:35:38,920 --> 00:35:42,240
Speaker 1: they are obligated to purchase the rights to that movie,

660
00:35:42,360 --> 00:35:46,000
Speaker 1: and the movie studio is in the the bargaining position

661
00:35:46,000 --> 00:35:48,280
Speaker 1: where they can demand huge amounts of money for that.

662
00:35:48,280 --> 00:35:52,200
Speaker 1: That became a huge, uh expense for HBO. We'll talk

663
00:35:52,239 --> 00:35:54,319
Speaker 1: about a specific example of that a little bit later

664
00:35:54,360 --> 00:35:57,880
Speaker 1: on in another episode. So yeah, yeah, big risks, but

665
00:35:57,880 --> 00:35:59,759
Speaker 1: it also what meant that it was paying off and

666
00:35:59,760 --> 00:36:03,480
Speaker 1: helping differentiate HBO from Showtime. Now we move up to

667
00:36:03,560 --> 00:36:06,080
Speaker 1: nineteen seventy nine. This is where we're going to conclude

668
00:36:06,120 --> 00:36:09,279
Speaker 1: this episode. But nineteen nine, we see a man named

669
00:36:09,320 --> 00:36:12,400
Speaker 1: Jeff Bukes who had started as a trainee at City

670
00:36:12,400 --> 00:36:15,479
Speaker 1: Bank in their law department, and also, by the way,

671
00:36:15,600 --> 00:36:18,800
Speaker 1: is rumored to have had a very what's HBO response

672
00:36:18,840 --> 00:36:21,319
Speaker 1: when he first heard about the network and figured out

673
00:36:21,320 --> 00:36:24,680
Speaker 1: what the network was, and and left his entire career

674
00:36:24,800 --> 00:36:27,040
Speaker 1: in order to go be a part of this new

675
00:36:27,080 --> 00:36:29,680
Speaker 1: media company. Yeah, he had worked, he had entered City

676
00:36:29,680 --> 00:36:31,920
Speaker 1: Banks trainee program. He worked there in the law department

677
00:36:31,920 --> 00:36:34,200
Speaker 1: for two years and then said I'm going to HBO.

678
00:36:34,719 --> 00:36:36,520
Speaker 1: And I'm sure some of the people at that time said,

679
00:36:36,960 --> 00:36:40,760
Speaker 1: what's HBO? So he would end up doing pretty well

680
00:36:40,760 --> 00:36:43,759
Speaker 1: over at HBO. We'll talk more about Bukes throughout the

681
00:36:43,840 --> 00:36:45,880
Speaker 1: next few episodes, but in general, just to give you

682
00:36:45,960 --> 00:36:49,720
Speaker 1: a little preview. In n he became president of HBO,

683
00:36:49,840 --> 00:36:55,080
Speaker 1: so pretty good, became the CEO's that's even better, and

684
00:36:55,120 --> 00:36:57,680
Speaker 1: into those night he became CEO of the parent company

685
00:36:57,760 --> 00:37:01,920
Speaker 1: Time Warner than now, granted Time Warner itself is still

686
00:37:01,960 --> 00:37:04,680
Speaker 1: off in the future. It's back in nineteen seventy nine,

687
00:37:04,680 --> 00:37:07,759
Speaker 1: it was still just Time Incorporated. But yeah, he he

688
00:37:07,880 --> 00:37:10,799
Speaker 1: became the head honcho. And the same year, back in

689
00:37:10,880 --> 00:37:15,000
Speaker 1: nineteen HBO decided to experiment with launching a complementary pay

690
00:37:15,080 --> 00:37:19,240
Speaker 1: TV channel that ran more kid friendly PG rated movies

691
00:37:19,320 --> 00:37:21,359
Speaker 1: and was priced at a lower price point because some

692
00:37:21,400 --> 00:37:24,440
Speaker 1: people were saying, you know, it's too expensive or I

693
00:37:24,440 --> 00:37:27,480
Speaker 1: don't really want all this sex and violence on my television,

694
00:37:27,760 --> 00:37:29,960
Speaker 1: and so they thought, oh, well we'll we'll caeter to this.

695
00:37:29,960 --> 00:37:32,040
Speaker 1: This group of people will be able to get people

696
00:37:32,040 --> 00:37:35,600
Speaker 1: who can't justify the expense of a monthly subscription to

697
00:37:35,680 --> 00:37:37,960
Speaker 1: HBO or who wants something that's kid friendly. Well we'll

698
00:37:38,000 --> 00:37:40,200
Speaker 1: give them this and it'll be terrific. We'll call it

699
00:37:40,280 --> 00:37:43,840
Speaker 1: Take two, which if you start searching for it's gonna

700
00:37:43,960 --> 00:37:48,040
Speaker 1: take you a while to find, because terrific. It didn't know, Yeah,

701
00:37:48,280 --> 00:37:52,439
Speaker 1: no one really cared. It died out pretty quietly. Um so, yeah,

702
00:37:52,800 --> 00:37:56,000
Speaker 1: finding finding mentions of Take two somewhat challenging. I mean,

703
00:37:56,080 --> 00:37:59,320
Speaker 1: I'm pretty sure Wikipedia has a short little entrigue about

704
00:37:59,480 --> 00:38:01,520
Speaker 1: not not an entry on Take two, but I think

705
00:38:01,520 --> 00:38:04,160
Speaker 1: it mentions it in the overall article for HBO. It's

706
00:38:04,160 --> 00:38:06,319
Speaker 1: a little red link. Yeah probably. Yeah, one of those

707
00:38:06,320 --> 00:38:09,160
Speaker 1: things where like you've you may have heard of it

708
00:38:09,200 --> 00:38:13,080
Speaker 1: if you worked for HBO. That's how how oscure we're talking.

709
00:38:13,920 --> 00:38:17,319
Speaker 1: That wraps up part one of the HBO story. So

710
00:38:17,520 --> 00:38:20,360
Speaker 1: next week we will jump right to part three, and

711
00:38:20,360 --> 00:38:22,640
Speaker 1: then we'll come back to part two. No, no, no,

712
00:38:22,760 --> 00:38:27,000
Speaker 1: I'm kidding. We're going to do them in order because reasons.

713
00:38:27,760 --> 00:38:29,799
Speaker 1: But I hope you enjoyed it. If you have any

714
00:38:29,800 --> 00:38:33,319
Speaker 1: suggestions for future topics I should cover, or perhaps a

715
00:38:33,400 --> 00:38:36,480
Speaker 1: topic that I have covered that requires an update, let

716
00:38:36,520 --> 00:38:39,319
Speaker 1: me know. Reach out on Twitter. The handle we use

717
00:38:39,440 --> 00:38:42,160
Speaker 1: is tech stuff h s W and I'll talk to

718
00:38:42,200 --> 00:38:50,520
Speaker 1: you again really soon. Tech Stuff is an I Heart

719
00:38:50,640 --> 00:38:54,359
Speaker 1: Radio production. For more podcasts from my Heart Radio, visit

720
00:38:54,400 --> 00:38:57,480
Speaker 1: the I Heart Radio app, Apple Podcasts, or wherever you

721
00:38:57,560 --> 00:39:01,080
Speaker 1: listen to your favorite shows. Eight