WEBVTT - The Warner Story Gets Messy 0:00:04.400 --> 0:00:07.800 Welcome to Tech Stuff, a production from I Heart Radio. 0:00:12.039 --> 0:00:14.440 Hey there, and welcome to tech Stuff. I'm your host, 0:00:14.640 --> 0:00:17.760 Jonathan Strickland. I'm an executive producer with I Heart Radio 0:00:17.800 --> 0:00:20.919 and I love all things tech and it's time for 0:00:21.000 --> 0:00:24.799 us to continue our exploration of the history of Warner Media. 0:00:26.000 --> 0:00:28.800 So in our last episode, I talked about the founding 0:00:28.960 --> 0:00:33.159 of two major parts of Warner Media, which was a 0:00:33.360 --> 0:00:38.519 Time Incorporated, a magazine publisher, and Warner Brothers as in 0:00:38.600 --> 0:00:42.239 Warner Brothers Studios, the film and then later TV and 0:00:42.360 --> 0:00:46.360 record label studios. I focused a lot on Warner Brothers 0:00:46.360 --> 0:00:49.440 in that last episode for pretty obvious reasons, but it's 0:00:49.479 --> 0:00:54.240 time to go back to Time Incorporated. That is for 0:00:54.280 --> 0:00:58.000 a moment anyway. Now. In the last episode, I said 0:00:58.040 --> 0:01:02.280 that Time grew as a publisher, adding more publications to 0:01:02.320 --> 0:01:05.319 its name as it evolved, and that it continued to 0:01:05.440 --> 0:01:08.600 do so right up to nine nine, when it would 0:01:08.600 --> 0:01:12.520 begin the process of merging with a company that at 0:01:12.560 --> 0:01:15.679 that point was called Warner Communications. And I'm not going 0:01:15.720 --> 0:01:19.560 to go all over that again because it's crazy complicated, 0:01:19.600 --> 0:01:22.480 and you know, I just did that in Monday's episode. 0:01:22.760 --> 0:01:25.759 But one thing I did not cover was Times own 0:01:26.000 --> 0:01:29.480 multimedia empire. See, Time wasn't just in the business of 0:01:29.520 --> 0:01:33.440 publishing magazines or even those Time Life books. You might 0:01:33.480 --> 0:01:36.480 remember if you grew up in the seventies and eighties 0:01:36.520 --> 0:01:38.759 like I did, and you saw the commercials all the time. 0:01:38.920 --> 0:01:41.280 You know, I never did get that series about ghosts, 0:01:41.319 --> 0:01:45.480 but I always wanted it. Anyway, we're backtracking a bit 0:01:45.920 --> 0:01:49.440 to the nineteen sixties to talk about another element of 0:01:49.480 --> 0:01:53.760 the Warner Media empire, and it came to Warner Media 0:01:54.000 --> 0:01:57.600 through Time Incorporated. And it's a very important piece of 0:01:57.640 --> 0:02:01.040 that empire. In fact, it's a composent that would end 0:02:01.120 --> 0:02:04.600 up being transformational, so much so that I've done a 0:02:04.600 --> 0:02:09.640 full series about this company, or rather this channel, and 0:02:09.680 --> 0:02:14.080 I'm talking about HBO or Home Box Office, the subscription 0:02:14.160 --> 0:02:17.840 cable channel best known today for like original series like 0:02:17.960 --> 0:02:20.560 Game of Thrones and stuff. So since I did a 0:02:20.600 --> 0:02:23.399 full treatment of this company in the past in full 0:02:23.440 --> 0:02:26.440 episodes of tech stuff, and in fact have aired some 0:02:26.520 --> 0:02:29.000 of those episodes as classics, not not in the not 0:02:29.120 --> 0:02:33.080 too distant past, I'm not going to dive into excruciating detail, 0:02:33.720 --> 0:02:35.519 but we do need to cover some of it because 0:02:36.080 --> 0:02:40.720 HBO is a really important part of Warner Media today. Alright, 0:02:40.760 --> 0:02:44.280 so let's put ourselves in the mindset of the typical 0:02:44.360 --> 0:02:49.240 American consumer, uh, someone who watches television back in the 0:02:49.320 --> 0:02:54.080 nineteen sixties. This person has spent a not insignificant amount 0:02:54.120 --> 0:02:57.520 of money to purchase a television set, and they most 0:02:57.560 --> 0:03:00.919 likely get their television using an end anna to tune 0:03:00.960 --> 0:03:05.480 into over the air broadcasts from nearby TV stations. Now, 0:03:05.600 --> 0:03:09.560 maybe if they live in a rural area, or if 0:03:09.600 --> 0:03:13.000 they're in a really dense urban area with lots of skyscrapers, 0:03:13.600 --> 0:03:17.239 they would actually be using cable. It's more likely to 0:03:17.280 --> 0:03:19.800 be in a rural area in the nineteen sixties because see, 0:03:20.280 --> 0:03:23.760 over the air broadcasts have a limited range, and once 0:03:23.760 --> 0:03:26.600 you get far enough out from where there's a transmitter, 0:03:27.000 --> 0:03:30.000 the signal you pick up might be so weak that 0:03:30.240 --> 0:03:33.200 you can't see or hear anything on a given channel, 0:03:33.800 --> 0:03:36.440 or it's just you know, a really poor quality, like 0:03:37.400 --> 0:03:40.720 a lot of static or whatever. So cable was a 0:03:40.760 --> 0:03:44.920 way to deliver television signals to distant locations over a 0:03:44.920 --> 0:03:48.800 physical wire or cable rather than over the air, and 0:03:48.920 --> 0:03:52.120 by the nineteen sixties there were more than six hundred 0:03:52.240 --> 0:03:56.520 cable systems in the United States. Mostly serving rural areas 0:03:56.560 --> 0:03:59.400 that were not or you know, small towns that were 0:03:59.440 --> 0:04:03.040 not close to transmitters. And the way most of these 0:04:03.080 --> 0:04:06.240 worked was that you would have a dedicated antenna in 0:04:06.280 --> 0:04:08.960 a location that could get a pretty good signal. So 0:04:09.440 --> 0:04:11.800 you might build a really tall antenna at the top 0:04:11.800 --> 0:04:14.640 of a hill, for example, and then you would pick 0:04:14.720 --> 0:04:17.840 up signals using that antenna, and you'd send that signal 0:04:17.960 --> 0:04:21.320 down cables to various households, which had to pay a 0:04:21.360 --> 0:04:25.800 fee to access the cable feed. But the alternative was 0:04:25.880 --> 0:04:30.039 to either get really cruddy TV signals or go with 0:04:30.120 --> 0:04:33.880 nothing at all. So for some regions, cable TV was 0:04:34.000 --> 0:04:38.400 really the only option if you actually wanted to watch television. Now, 0:04:38.400 --> 0:04:41.520 it was a guy named Charles Dolan who really pioneered 0:04:41.640 --> 0:04:44.960 cable for dense urban environments. Like I said, it was 0:04:44.960 --> 0:04:49.080 already being done out in rural areas, but Dolan was 0:04:49.120 --> 0:04:52.640 looking at places like New York City. Dolan had started 0:04:52.640 --> 0:04:55.640 out as a film editor. He was splicing together stuff 0:04:55.680 --> 0:04:59.760 like sports films and industrial films in Cleveland, Ohio. But 0:05:00.120 --> 0:05:03.000 he got a lucrative offer to sell his business and 0:05:03.040 --> 0:05:05.799 he took it. Then he relocated to New York City, 0:05:06.040 --> 0:05:08.919 and that's where he saw the opportunity to potentially create 0:05:08.960 --> 0:05:11.560 a cable system to serve the needs of folks who 0:05:11.600 --> 0:05:15.599 were living in Downtown Manhattan and Lower Manhattan. Many of 0:05:15.600 --> 0:05:18.839 these people, because of skyscrapers, weren't able to get a 0:05:18.880 --> 0:05:22.599 good signal just using you know, antenna. Meanwhile, folks in 0:05:22.680 --> 0:05:26.640 New Jersey could pick up signals from Manhattan without a problem. 0:05:26.760 --> 0:05:29.600 So it was really a disconnect, right. You had people 0:05:29.960 --> 0:05:33.600 living miles away who were picking up signals there were 0:05:33.640 --> 0:05:36.800 just a few blocks away from Lower Manhattan, and the 0:05:36.800 --> 0:05:40.479 folks at Lower Manhattan couldn't see anything. Well. Dolan decided 0:05:40.520 --> 0:05:43.960 to start up a business called Sterling Information Services in 0:05:44.040 --> 0:05:48.400 nineteen and the company's focus was to provide cable TV 0:05:48.480 --> 0:05:53.320 service for Lower Manhattan. But while the demand for television 0:05:53.600 --> 0:05:57.600 was there, the actual reality of wiring up customers was 0:05:57.640 --> 0:06:01.599 another matter. Because after a mass of blizzard that happened 0:06:01.600 --> 0:06:03.680 in the late nineteenth century, the city of New York 0:06:03.720 --> 0:06:08.200 had made a decision regarding infrastructure. You know, back then, 0:06:08.839 --> 0:06:12.440 numerous utility poles were destroyed in that blizzard, so New 0:06:12.520 --> 0:06:16.880 York decided to install power lines underground rather than using 0:06:17.000 --> 0:06:20.520 utility poles, and stringing them above ground. Now that meant 0:06:21.040 --> 0:06:23.840 there were no utility poles for Dolan to use in 0:06:23.960 --> 0:06:27.800 order to wire up cable, so that meant he was 0:06:27.839 --> 0:06:33.000 going to have to lay cable underground. That is incredibly expensive. 0:06:33.320 --> 0:06:35.920 The estimates were somewhere in the neighborhood of three hundred 0:06:35.960 --> 0:06:39.679 thousand dollars per mile of cable, and getting the cable 0:06:39.720 --> 0:06:42.279 to a customer's location was just part of the problem. 0:06:42.480 --> 0:06:47.520 Manhattan residents largely lived in apartment buildings, so Dolan would 0:06:47.520 --> 0:06:49.800 not just have to get the cable to the building, 0:06:50.120 --> 0:06:53.320 he would then have to install cable into the buildings themselves, 0:06:53.320 --> 0:06:56.200 you know, snake it up through the structure itself, in 0:06:56.320 --> 0:06:59.280 order to wire up each of the apartments that would 0:06:59.320 --> 0:07:03.240 subscribe to his service. So by nineteen sixty seven, you know, 0:07:03.320 --> 0:07:06.520 two years into his endeavor, Dolan had only signed up 0:07:06.560 --> 0:07:09.640 four hundred customers and had spent more than two million 0:07:09.720 --> 0:07:13.600 dollars in the process. And he was losing money at 0:07:13.640 --> 0:07:18.200 that time, Like he the costs were vastly outpacing the revenue. 0:07:19.160 --> 0:07:23.200 Dolan got an investor to help offset those costs, and 0:07:23.240 --> 0:07:27.320 that kept him afloat. And that investor was drumroll, please, 0:07:28.160 --> 0:07:33.520 Time incorporated. Time, the publisher was eyeing cable as a 0:07:33.560 --> 0:07:37.840 possible means of diversifying its portfolio of businesses, and the 0:07:37.880 --> 0:07:42.800 folks at Time had this feeling that cable TV could 0:07:42.840 --> 0:07:46.160 become a really big thing. So Time bought a stake 0:07:46.400 --> 0:07:49.080 in Sterling, which gave Dolan the money he needed in 0:07:49.160 --> 0:07:52.160 order to stay in business. But Dolan was still having 0:07:52.240 --> 0:07:56.080 trouble convincing people to actually sign up for the cable service. 0:07:56.680 --> 0:08:01.040 The content that already existed for TV isn't always compelling 0:08:01.160 --> 0:08:04.360 enough to convince most folks to agree to a subscription 0:08:04.480 --> 0:08:08.600 based model in order to access it. See. The main 0:08:08.680 --> 0:08:12.120 issue really was that TV content at that time was 0:08:12.400 --> 0:08:16.520 free quote unquote free Now I say free because it's 0:08:16.760 --> 0:08:19.760 free the same way this podcast is free, and that 0:08:19.840 --> 0:08:24.680 the content on television received revenue from advertisers. Content was 0:08:24.800 --> 0:08:28.040 ad supported. In other words, This also gave rise to 0:08:28.040 --> 0:08:31.960 companies like Nielsen, which created systems that could measure the 0:08:32.000 --> 0:08:37.160 relative popularity of different programs. That popularity would then lead 0:08:37.160 --> 0:08:40.480 to estimates about how many people were watching any given 0:08:40.520 --> 0:08:43.440 show at any given time. Yeah, this was done by 0:08:43.600 --> 0:08:48.240 projecting numbers. You would distribute a number of devices that 0:08:48.280 --> 0:08:52.240 would essentially monitor what channel televisions were set at in 0:08:52.320 --> 0:08:56.280 a given time, and then you would multiply that number 0:08:56.280 --> 0:08:58.480 by a factor in order to kind of project that 0:08:58.520 --> 0:09:01.679 out to the general public. Not the most precise way 0:09:01.679 --> 0:09:04.200 of doing things, but it was the only real way 0:09:04.200 --> 0:09:08.320 of handling it at the moment. So that popularity level 0:09:08.360 --> 0:09:11.360 would lead to, you know, estimates about how many people 0:09:11.400 --> 0:09:13.560 were watching at any given show at any given time, 0:09:13.559 --> 0:09:16.880 and that gave TV executives an idea of what their 0:09:16.880 --> 0:09:21.080 most popular programming was. That would lead to TV executives 0:09:21.160 --> 0:09:24.640 being able to negotiate bigger ad deals for the most 0:09:24.720 --> 0:09:27.880 popular programs. And all of this makes sense, right, I mean, 0:09:28.120 --> 0:09:30.880 you can ask for a higher price to run an 0:09:30.920 --> 0:09:35.560 ad during a really popular show because presumably way more 0:09:35.559 --> 0:09:38.760 people are going to see ads that run on that 0:09:38.800 --> 0:09:41.520 show than they would if you had an episode of 0:09:41.520 --> 0:09:47.600 I don't know, Johnny tech boy talks about gadgets. Trust me, 0:09:47.640 --> 0:09:51.400 I should know. Anyway, this sort of set up a 0:09:51.440 --> 0:09:56.720 general expectation among viewers TV programming was quote unquote free. 0:09:57.160 --> 0:09:59.760 And it's funny because the same sort of thing happened 0:10:00.120 --> 0:10:03.400 the Internet, right People got used to this idea that 0:10:03.480 --> 0:10:06.679 they could access content on the Internet for free, which 0:10:06.720 --> 0:10:11.480 meant when some companies try to generate revenue not through advertising, 0:10:11.880 --> 0:10:15.480 which has its own set of drawbacks, but rather through 0:10:15.520 --> 0:10:18.880 things like subscriptions or paid for content. A lot of 0:10:19.120 --> 0:10:22.880 people balked at that the so called paywall became a 0:10:22.920 --> 0:10:25.880 barrier to entry, and I get it. You're asking people 0:10:26.160 --> 0:10:29.840 to pay out of pocket for something when there's tons 0:10:29.920 --> 0:10:32.760 of other stuff out there that does not require that 0:10:32.840 --> 0:10:35.880 kind of direct investment. It's one of the big reasons 0:10:36.040 --> 0:10:39.520 we don't go for paid subscription approaches with our podcasts 0:10:39.559 --> 0:10:42.640 in general. We feel that anytime you put a paywall 0:10:42.720 --> 0:10:45.360 in front of content, you're going to see a much 0:10:45.400 --> 0:10:48.760 smaller audience, and we would rather be able to reach 0:10:48.800 --> 0:10:51.640 a lot of people, because it turns out we like 0:10:51.800 --> 0:10:56.600 people anyway. The landscape and TV was that most people 0:10:56.640 --> 0:10:59.400 were used to getting their programming for free, and so 0:10:59.480 --> 0:11:03.600 a lot of just didn't see the value in subscribing 0:11:03.640 --> 0:11:06.800 to a service to get something that other people got 0:11:06.840 --> 0:11:09.920 just by using an antenna. So Dolan would end up 0:11:09.920 --> 0:11:12.439 doing something that lots of other people and companies had 0:11:12.480 --> 0:11:16.640 tried before. He would create content that would not be 0:11:16.720 --> 0:11:20.120 available anywhere else, and the only way you would be 0:11:20.120 --> 0:11:22.600 able to get it is if you bought into the 0:11:22.720 --> 0:11:26.360 cable subscription. Our c A essentially did this back in 0:11:26.400 --> 0:11:29.560 the day with radios. The company made radio sets, but 0:11:30.000 --> 0:11:33.120 it really got into the radio station business largely because 0:11:33.280 --> 0:11:36.960 it created the demand among consumers to buy the radios themselves. 0:11:37.040 --> 0:11:39.640 Right Like, you wouldn't buy a radio if there were 0:11:39.640 --> 0:11:42.440 no stations to tune into. So our c A had 0:11:42.480 --> 0:11:44.800 to get into the radio station business to create the 0:11:44.880 --> 0:11:47.520 content so that people would want to go out and 0:11:47.559 --> 0:11:51.720 buy the radio sets. It's this kind of cyclical approach. Now, 0:11:51.720 --> 0:11:54.560 the story goes that Dolan went on vacation with his 0:11:54.640 --> 0:11:57.880 family and took a cruise to France aboard the ship 0:11:57.960 --> 0:12:01.320 the Queen Elizabeth the Second, and on that trip he 0:12:01.400 --> 0:12:04.720 came up with this idea for an exclusive channel that 0:12:04.760 --> 0:12:09.079 would only go to his cable subscribers, and his working 0:12:09.200 --> 0:12:12.120 name for the channel at that point was the Green Channel. 0:12:12.840 --> 0:12:16.120 The Green Channel would have to have special programming on it, 0:12:16.360 --> 0:12:18.600 It had to have stuff that you just couldn't find 0:12:18.800 --> 0:12:22.000 on over the air broadcasts had to be set apart 0:12:22.360 --> 0:12:25.720 with premium content. And this was going to be a 0:12:25.840 --> 0:12:29.480 pretty big gamble because other people had attempted to create 0:12:29.800 --> 0:12:32.559 versions of pay TV in the past, and no one 0:12:32.559 --> 0:12:35.440 had really succeeded at it so far. Now. Some of 0:12:35.440 --> 0:12:39.200 those schemes involved over the air transmissions. Those are kind 0:12:39.200 --> 0:12:42.600 of hard to do as a pay TV service because 0:12:42.600 --> 0:12:44.880 there's always a chance for people to try and pirate 0:12:45.040 --> 0:12:48.600 the air waves and thus watch that precious content without 0:12:48.640 --> 0:12:51.559 actually paying for it. And because it's over the air broadcasts, 0:12:51.920 --> 0:12:53.880 you would have no way of knowing as a broadcaster 0:12:53.960 --> 0:12:55.720 that people were doing that, right, I mean, you're just 0:12:55.800 --> 0:12:59.160 sending a signal out. There's no return signal that tells 0:12:59.200 --> 0:13:02.160 you if people are, you know, legit paying for your service, 0:13:02.240 --> 0:13:05.319 or if they're just stealing it like the dirty TV 0:13:05.520 --> 0:13:10.479 thieves that they are. There were also encoding and decoding strategies, 0:13:10.480 --> 0:13:13.960 in other words, scrambling a signal, which in theory, on 0:13:14.000 --> 0:13:16.760 the other end, when you have a paying customer, would 0:13:16.760 --> 0:13:19.880 be de scrambled to play properly on the television. But 0:13:19.920 --> 0:13:22.839 a lot of those approaches were really limited and not 0:13:23.160 --> 0:13:26.280 very good. So there were a lot of legit customers 0:13:26.320 --> 0:13:29.480 who were getting poor experiences on the other end, like 0:13:29.920 --> 0:13:33.600 they were actually paying for the service, but the results 0:13:33.640 --> 0:13:38.840 were subpar cable bypassed those types of issues, and it 0:13:38.880 --> 0:13:42.320 had another benefit because it wasn't broadcast over the air 0:13:43.040 --> 0:13:47.520 because the f c C was trailing behind technology, FCC 0:13:47.640 --> 0:13:51.560 restrictions that applied to over the air providers did not 0:13:51.920 --> 0:13:57.280 apply to cable. Time surveyed potential customers. That is, Time 0:13:57.320 --> 0:14:01.720 Incorporated surveyed potential customers for this new cable service with 0:14:01.800 --> 0:14:05.920 a premium channel, and the results were not exactly promising. 0:14:05.960 --> 0:14:09.000 They looked pretty bad, and they actually did a couple 0:14:09.040 --> 0:14:11.880 of surveys and a lot of them looked bad. However, 0:14:11.960 --> 0:14:15.440 after Time suggested that the first month of service would 0:14:15.480 --> 0:14:20.040 be free and the installation charges would be refundable, they 0:14:20.080 --> 0:14:22.680 got a slightly better response, though it still wasn't like 0:14:22.800 --> 0:14:27.240 overwhelmingly positive. It was essentially like a fift approval. Meanwhile, 0:14:27.600 --> 0:14:30.880 the Green Channel went through a name makeover. No one 0:14:30.880 --> 0:14:33.400 had really come up with a killer name yet, so 0:14:33.600 --> 0:14:37.240 they had a placeholder, a temporary name, and this was 0:14:37.280 --> 0:14:41.600 called Home Box Office, which everyone was absolutely sure would 0:14:41.640 --> 0:14:46.800 be changed before it launched, and it totally didn't. Interestingly, 0:14:47.400 --> 0:14:50.880 when HBO was finally ready to debut, it wouldn't do 0:14:51.040 --> 0:14:54.920 so on Sterling Communications. That is, it would not be 0:14:55.040 --> 0:15:00.840 on Dolan's cable network UH. Instead, it was a community 0:15:00.920 --> 0:15:05.520 in Allentown, Pennsylvania that Time would choose as the debut 0:15:05.640 --> 0:15:09.560 spot for HBO, at least initially UH, and it was 0:15:09.600 --> 0:15:12.040 wired up on a totally different cable service that was 0:15:12.080 --> 0:15:14.600 created by a guy named John Walson. That's the man 0:15:14.640 --> 0:15:17.320 who actually gets the credit for inventing cable TV in 0:15:17.320 --> 0:15:21.400 the first place. However, Time then changed its mind decided 0:15:21.440 --> 0:15:25.440 to actually pilot the service in Wilkes Bar, Pennsylvania. The 0:15:25.480 --> 0:15:28.880 reason for the shift was that some of the programming 0:15:29.000 --> 0:15:32.960 that HBO wanted to carry happened to be NBA basketball games. 0:15:33.160 --> 0:15:37.960 But the NBA, like a lot of sports organizations, has 0:15:38.000 --> 0:15:41.120 a blackout rule, and that blackout rule says you are 0:15:41.200 --> 0:15:44.640 not allowed to broadcast a game played within a certain 0:15:44.760 --> 0:15:48.840 radius of where that game is taking place unless that 0:15:48.920 --> 0:15:51.800 game happens to be sold out. This is a way 0:15:51.840 --> 0:15:55.280 to make sure that venues like stadiums are selling as 0:15:55.280 --> 0:15:58.680 many tickets as possible. The idea being that if you 0:15:58.680 --> 0:16:01.760 can stay home and why the game on TV, you 0:16:01.880 --> 0:16:04.400 might not make the effort of buying a ticket and 0:16:04.480 --> 0:16:06.400 going to the stadium. I mean that would be much 0:16:06.400 --> 0:16:11.200 more expensive. So these blackouts meant that if you happened 0:16:11.200 --> 0:16:14.200 to be within a certain region, like a certain range 0:16:14.440 --> 0:16:18.000 from the stadium, you could not broadcast there. Well, Allentown 0:16:18.040 --> 0:16:20.480 was a little too close to Philadelphia for that to 0:16:20.520 --> 0:16:24.840 work out, So wilkes Bar was outside that range and 0:16:25.320 --> 0:16:28.000 thus wouldn't have any issues. It wouldn't It would mean 0:16:28.000 --> 0:16:31.880 that HBO wouldn't have to go dark for certain types 0:16:31.920 --> 0:16:35.960 of programming. So Time moves the pilot program to wilkes Bar, 0:16:36.400 --> 0:16:41.160 and again that was outside of that that UH radius. Now, initially, 0:16:41.160 --> 0:16:45.000 the subscription for HBO to add HBO to your cable 0:16:45.080 --> 0:16:48.200 plan if you lived in wilkes Bar at this time 0:16:48.960 --> 0:16:52.840 was six dollars a month. Fewer than four hundred people 0:16:52.880 --> 0:16:55.440 signed up for it when it launched on November eighth, 0:16:55.600 --> 0:16:59.040 ninety two, and the first two pieces of programming on 0:16:59.200 --> 0:17:04.119 HBO included a hockey game of the Rangers versus the Canucks, 0:17:04.160 --> 0:17:08.520 followed by a movie from nineteen seventy called Sometimes a 0:17:08.560 --> 0:17:13.720 Great Notion. The growth of HBO at first wasn't exactly inspiring. 0:17:14.160 --> 0:17:19.560 Time incorporated oversaw deals with various regional cable companies, most 0:17:19.600 --> 0:17:23.359 of them in Pennsylvania, and got agreements for them to 0:17:23.400 --> 0:17:26.160 be able to carry the channel in return for subscriptions. 0:17:26.680 --> 0:17:29.679 Customers of those cable companies would still have to add 0:17:30.040 --> 0:17:33.520 a subscription to HBO in order to actually access that channel. 0:17:34.160 --> 0:17:37.280 This would go on top of their normal cable subscription, 0:17:37.359 --> 0:17:40.399 so they're already paying their cable bill, they'd have to 0:17:40.400 --> 0:17:42.680 pay extra to get HBOS, something that I think most 0:17:42.680 --> 0:17:44.359 of us are familiar with because that's kind of how 0:17:44.359 --> 0:17:47.680 it operates now. And this was still a pretty hard 0:17:47.760 --> 0:17:51.040 sell at that point. There were also other paid cable 0:17:51.119 --> 0:17:54.679 channels emerging around this time, including one that would be 0:17:54.720 --> 0:17:58.479 called Star Channel, which was part of Kenny National Company 0:17:58.600 --> 0:18:03.200 slash Warner Community Sans within a division of Warner Communications 0:18:03.200 --> 0:18:08.840 called Warner Cable. Meanwhile, the Sterling Cable Company was still 0:18:08.920 --> 0:18:12.440 struggling in New York and losing money. The subscriber base 0:18:12.600 --> 0:18:15.520 was modest, and the cost of installing cable in Manhattan 0:18:15.760 --> 0:18:19.639 had not gotten any cheaper. Time acquired controlling Steak in 0:18:19.720 --> 0:18:24.440 Sterling and then renamed it Manhattan Cable Television in nineteen three. 0:18:25.200 --> 0:18:28.240 The growth in HBO largely came from a new method 0:18:28.320 --> 0:18:31.760 of distributing signals so early on the way that Time 0:18:32.000 --> 0:18:36.240 would broadcast HBO to cable stations. Is so they've got 0:18:36.280 --> 0:18:39.679 their starter signal. They would then send that signal to 0:18:39.960 --> 0:18:44.399 a microwave transmitter. And you have a tower, a radio 0:18:44.480 --> 0:18:47.960 tower that can send out microwave transmissions. This tower would 0:18:47.960 --> 0:18:51.159 beam out of microwave signal that carries that channel to 0:18:51.320 --> 0:18:55.360 various cable stations in the region. These stations would receive 0:18:55.480 --> 0:18:59.560 that transmission using a microwave antenna, and then they would 0:18:59.760 --> 0:19:03.400 say and that signal through their cables to their customers. 0:19:03.880 --> 0:19:06.800 But this new approach would go much further. In fact, 0:19:06.840 --> 0:19:09.120 it went all the way out into space. The new 0:19:09.160 --> 0:19:12.920 approach involved beaming the channel signal up to a communications 0:19:13.000 --> 0:19:16.960 satellite in orbit, which then could beam down that same 0:19:17.000 --> 0:19:21.160 signal to a receiving antenna connected to various cable stations. 0:19:21.560 --> 0:19:24.480 This removed the need to build out microwave transmission antenna 0:19:24.520 --> 0:19:28.800 across the United States and helped HBO to go national. Now, 0:19:28.800 --> 0:19:31.440 when we come back, will transition over to some other 0:19:31.480 --> 0:19:34.639 elements that would become part of the Time Warner slash 0:19:34.680 --> 0:19:39.639 Warner Communications slash Warner Media Empire, and some that would 0:19:39.640 --> 0:19:43.000 not stand the test of time. But first let's take 0:19:43.200 --> 0:19:54.000 a quick break. HBO would continue to grow year over year, 0:19:54.080 --> 0:19:56.160 and of course it got into the business of creating 0:19:56.160 --> 0:19:59.680 original content on top of carrying stuff like sports events, 0:20:00.200 --> 0:20:03.720 films that had recently left their theatrical runs. It also 0:20:03.760 --> 0:20:06.960 created a companion channel that was a slightly lower tier 0:20:07.160 --> 0:20:12.159 premium subscription channel. That channel was Cinemax, which launched in 0:20:12.240 --> 0:20:16.960 nineteen Cinemax would focus solely on carrying movies at first, 0:20:17.280 --> 0:20:20.800 while HBO continued to carry a variety of programming. The 0:20:20.880 --> 0:20:24.760 reason Time launched Cinemax was primarily to compete with the 0:20:24.800 --> 0:20:27.520 Movie Channel, which at that point was part of the 0:20:27.560 --> 0:20:32.119 Warner Amex satellite entertainment venture. The Movie Channel, by the way, 0:20:32.280 --> 0:20:35.680 would merge with another channel called Showtime, and that new 0:20:35.760 --> 0:20:40.400 channel would just be called Showtime. Ultimately, Warner an American 0:20:40.440 --> 0:20:45.680 Express would sell off this joint venture to Viacom. Anyway, 0:20:45.880 --> 0:20:49.200 Cinemax would go on to experiment with various content over 0:20:49.240 --> 0:20:51.720 the years, and while from the outside it seemed like 0:20:51.760 --> 0:20:54.720 it was kind of a competing cable service to HBO, 0:20:54.880 --> 0:20:59.000 in reality, both entities fell under the umbrella of Time 0:20:59.200 --> 0:21:05.320 and after nine Time Warner. Okay, so that's the basis 0:21:05.480 --> 0:21:08.800 of the HBO and Cinemax elements of what is now 0:21:08.960 --> 0:21:12.240 Warner Medium. I'm sure we're gonna come back because we're 0:21:12.280 --> 0:21:14.600 gonna have to talk about HBO Max later on that 0:21:14.600 --> 0:21:16.320 that's going to have to come in the next episode. 0:21:16.480 --> 0:21:19.760 And we've got a lot more to cover because there's 0:21:19.760 --> 0:21:22.800 just so much and it is exhausting. But let's let's 0:21:22.800 --> 0:21:26.080 take quick stock before we move on. So we're up 0:21:26.119 --> 0:21:31.719 to about Time Warner has merged, So Time Incorporated and 0:21:31.760 --> 0:21:35.520 Warner Communications are now Time Warner, and we've got a 0:21:35.520 --> 0:21:38.720 true goliath of a multimedia company, one that would set 0:21:38.760 --> 0:21:41.840 the stage for other massive media companies in the future. 0:21:42.280 --> 0:21:44.919 So you had the assets of Time, which included a 0:21:45.000 --> 0:21:50.600 publishing company with several popular weekly magazine titles, plus books 0:21:50.640 --> 0:21:54.200 and beyond. That also includes the pay cable channels and 0:21:54.400 --> 0:21:58.760 HBO and Cinemax, which we're now established entities, and they 0:21:58.760 --> 0:22:03.119 were solid revenue general raiders. By nine. You had the 0:22:03.320 --> 0:22:07.760 Warner Brothers movie and animation studios. UH Animation at this 0:22:07.800 --> 0:22:09.960 point was it was a little quiet, but they still 0:22:10.000 --> 0:22:13.560 had them. You also had the Warner Brothers television studios. 0:22:14.119 --> 0:22:16.880 You still had the Warner Music Group, which was kind 0:22:16.880 --> 0:22:20.360 of an umbrella for numerous music companies, not just Warner records. 0:22:21.000 --> 0:22:25.880 Warner had sold off its stake in cable channels like MTV, Nickelodeon, 0:22:25.880 --> 0:22:29.600 and Showtime to Viacom, so those were gone, but the 0:22:29.640 --> 0:22:33.640 company still had actual cable operations as in cable service, 0:22:34.080 --> 0:22:36.680 that is, the ability to act as a cable service provider. 0:22:36.960 --> 0:22:40.399 That was Warner Cable. Oh and they also owned d 0:22:40.640 --> 0:22:45.400 C Comics. Time had also acquired a cable service provider 0:22:45.480 --> 0:22:49.440 called American Television and Communications or a TC, back in 0:22:49.560 --> 0:22:54.439 nineteen seventy three, So Warner Cable became Time Warner Cable 0:22:54.560 --> 0:22:59.280 after the merger, and a t C became Time Warner Communications. 0:23:00.240 --> 0:23:03.600 Both of these divisions were then lumped in together into 0:23:03.680 --> 0:23:08.320 a collected division called Time Warner Cable Group. However, this 0:23:08.440 --> 0:23:10.800 part of the Time Warner would not stick around by 0:23:10.800 --> 0:23:12.960 the time we get to Warner Media. This is a 0:23:13.000 --> 0:23:15.399 part of the company that would get spun off and 0:23:15.480 --> 0:23:18.560 sold off. The Time Warner Company would spend off Time 0:23:18.560 --> 0:23:21.360 Warner Cable as an independent company in two thousand nine. 0:23:21.440 --> 0:23:23.560 But let's just follow that bunny trail a bit more 0:23:23.920 --> 0:23:26.439 because it is interesting. So we're gonna flash forward to 0:23:26.520 --> 0:23:31.760 two thousand thirteen and in Time Warner Cable, which remember 0:23:31.800 --> 0:23:34.480 at this point is an independent company. It's no longer 0:23:34.560 --> 0:23:38.479 part of Time Warner itself. Uh. It was looking at 0:23:38.480 --> 0:23:41.719 the possibility of finding a buyer to take over the company, 0:23:41.960 --> 0:23:46.680 and old t WC founded two suitors in Charter Communications 0:23:47.080 --> 0:23:51.879 and Comcast. These two companies competed for the lovely hand 0:23:51.960 --> 0:23:56.600 of Time Warner Cable in proverbial marriage, and Comcast looked 0:23:56.600 --> 0:23:59.320 like it was going to win out, but then the 0:23:59.440 --> 0:24:01.400 US depart I'm gonna have justice stepped in and said, 0:24:01.440 --> 0:24:05.040 hang on, Comcast, if you buy out Time Warner Cable, 0:24:05.280 --> 0:24:07.480 then you're going to have control of more than half 0:24:07.960 --> 0:24:11.720 of all broadband connections in the United States, and that's 0:24:11.800 --> 0:24:15.480 just a bit too anti competitive for our tastes, which 0:24:15.560 --> 0:24:18.159 was probably a good thing because Comcast was also building 0:24:18.160 --> 0:24:22.040 out its own ginormous media empire, which is a totally 0:24:22.080 --> 0:24:26.480 different story. By Comcast had enough with all the various 0:24:26.560 --> 0:24:29.439 inquiries and pushbacks and they jumped out of the picture. 0:24:29.760 --> 0:24:33.159 So Charter went on to acquire Time Warner Cable and 0:24:33.240 --> 0:24:36.240 eventually phased out the branding to merge it with Charters 0:24:36.440 --> 0:24:40.240 brand Spectrum, so that former part of Time Warner is 0:24:40.320 --> 0:24:44.520 now with Charter as Spectrum. Okay, so we've dealt with 0:24:44.600 --> 0:24:52.719