1 00:00:04,400 --> 00:00:07,800 Speaker 1: Welcome to Tech Stuff, a production from I Heart Radio. 2 00:00:12,000 --> 00:00:14,560 Speaker 1: Hey there, and welcome to tech Stuff. I'm your host 3 00:00:14,640 --> 00:00:17,200 Speaker 1: job on Strickland. I'm an executive producer with iHeart Radio 4 00:00:17,239 --> 00:00:21,160 Speaker 1: and I love all things tech. And it is time 5 00:00:21,200 --> 00:00:23,520 Speaker 1: front of a classic episode and it's actually gonna be 6 00:00:23,560 --> 00:00:28,920 Speaker 1: a continuation of our previous classic episode. So this episode 7 00:00:29,200 --> 00:00:33,000 Speaker 1: the HBO Story Part two, originally published on May seven, 8 00:00:35,120 --> 00:00:37,640 Speaker 1: and um, we are just going to jump right in, 9 00:00:38,040 --> 00:00:41,839 Speaker 1: get back into the story. Let's go. HBO as an entity, 10 00:00:42,200 --> 00:00:46,720 Speaker 1: has heavily influenced what cable television is and what entertainment 11 00:00:46,760 --> 00:00:50,159 Speaker 1: delivery services are in general. If it hadn't been for HBO, 12 00:00:50,680 --> 00:00:55,480 Speaker 1: our landscape would be dramatically different today. So that's why 13 00:00:55,520 --> 00:00:57,760 Speaker 1: we're doing it. In fact, think about it. Without HBO, 14 00:00:58,720 --> 00:01:03,480 Speaker 1: you don't have cable companies, cable system operators pushing cable 15 00:01:03,680 --> 00:01:07,520 Speaker 1: copper cable into cities anywhere near as quickly. Right, you 16 00:01:07,600 --> 00:01:09,520 Speaker 1: might not have ever seen it happen, or it might 17 00:01:09,560 --> 00:01:12,160 Speaker 1: have taken a decade longer, which means you would not 18 00:01:12,240 --> 00:01:16,000 Speaker 1: even have the infrastructure that the Internet relies on today. 19 00:01:16,040 --> 00:01:20,119 Speaker 1: For high speed internet, we'd be using telephone lines. Still, yeah, 20 00:01:20,200 --> 00:01:23,600 Speaker 1: you might Furthermore, not have had people adopt as quickly 21 00:01:23,680 --> 00:01:29,000 Speaker 1: the idea of using satellites to beam information, uh television 22 00:01:29,040 --> 00:01:34,200 Speaker 1: information out to many far spread networks. Exactly So, like 23 00:01:34,240 --> 00:01:37,479 Speaker 1: we said, landscape very different without HBO. Whether you love 24 00:01:37,520 --> 00:01:40,559 Speaker 1: it or hate it, it's a large part of why 25 00:01:40,600 --> 00:01:43,160 Speaker 1: the world is as far as the cable world and 26 00:01:43,319 --> 00:01:46,160 Speaker 1: entertainment worlds, why things are the way they are so 27 00:01:46,160 --> 00:01:49,880 Speaker 1: so um. A little tiny bit of backstory, very tiny. 28 00:01:50,560 --> 00:01:55,160 Speaker 1: HBO owned by Time, Yes, Time Incorporated, not not Time, 29 00:01:55,280 --> 00:01:59,680 Speaker 1: the the physical entity like the actual not Father Time, 30 00:02:00,080 --> 00:02:04,640 Speaker 1: the progression of changes throughout not the fourth dimension that 31 00:02:04,760 --> 00:02:07,240 Speaker 1: we know of, Time Incorporated, the company that owned Time 32 00:02:07,280 --> 00:02:12,320 Speaker 1: magazine or still does Time Magazine, Fortune Magazine, Sports Illustrated, etcetera, etcetera. Correct. So, 33 00:02:12,360 --> 00:02:16,040 Speaker 1: in Time launched a second pay TV channel called Cinemax, 34 00:02:16,480 --> 00:02:20,560 Speaker 1: primarily as a competitor to the less expensive Showtime. Yes, so, 35 00:02:22,000 --> 00:02:24,440 Speaker 1: there were a couple of different ways to compete against Showtime. 36 00:02:24,440 --> 00:02:27,320 Speaker 1: One was let's try and grab as much exclusive content 37 00:02:27,360 --> 00:02:30,239 Speaker 1: as we possibly can that Showtime can't have. And thus 38 00:02:30,280 --> 00:02:32,760 Speaker 1: people will say, hey, we want HBO because they have 39 00:02:32,880 --> 00:02:37,280 Speaker 1: these movies and Showtime doesn't. However, that's really expensive Another 40 00:02:37,320 --> 00:02:40,920 Speaker 1: approach was to create a second paid television network, Cinemax, 41 00:02:41,280 --> 00:02:43,920 Speaker 1: and to run a lot of the same programming that 42 00:02:44,080 --> 00:02:47,760 Speaker 1: HBO itself already had, and maybe concentrate on some genres 43 00:02:48,120 --> 00:02:53,560 Speaker 1: that didn't necessarily fit into HBO's corporate appearances, like they're there, 44 00:02:53,280 --> 00:02:56,600 Speaker 1: their their culture, and furthermore, that happened to be a 45 00:02:56,639 --> 00:02:59,520 Speaker 1: lot less expensive to purchase. Like I like cult films 46 00:02:59,600 --> 00:03:02,799 Speaker 1: and kind of obscure noir stuff. One of my favorite 47 00:03:02,800 --> 00:03:05,960 Speaker 1: cult films of all time I first saw on Cinemax. 48 00:03:06,040 --> 00:03:08,200 Speaker 1: I had heard about it, but I've never seen it. 49 00:03:08,560 --> 00:03:12,440 Speaker 1: And that film, of course, is the brilliant movie Shock Treatment. 50 00:03:12,919 --> 00:03:15,919 Speaker 1: The not a sequel, not a prequel, but an equal 51 00:03:16,080 --> 00:03:18,520 Speaker 1: to the Rocky Horror Picture Show. And that's how I 52 00:03:18,560 --> 00:03:20,920 Speaker 1: saw it the first time I ever experienced it. It 53 00:03:21,000 --> 00:03:24,160 Speaker 1: was shown on Cinemax because it fit into that realm 54 00:03:24,280 --> 00:03:27,080 Speaker 1: of the Cinemax movie where it were there were some 55 00:03:27,120 --> 00:03:29,880 Speaker 1: of these kind of cult classic, schlocky, sort of cheap 56 00:03:30,000 --> 00:03:34,160 Speaker 1: movies to license, but they still had their audience. So 57 00:03:35,120 --> 00:03:39,960 Speaker 1: this approach did not come without criticism, specifically from Viacom, 58 00:03:40,000 --> 00:03:42,960 Speaker 1: which was the parent company of Showtime. They said that 59 00:03:43,000 --> 00:03:46,040 Speaker 1: Cinemax was being offered at below cost. In other words, 60 00:03:46,160 --> 00:03:49,160 Speaker 1: HBO was suffering a loss to run Cinemax just so 61 00:03:49,200 --> 00:03:53,560 Speaker 1: that they could undercut Showtime. Uh now, if you remember 62 00:03:54,200 --> 00:03:57,200 Speaker 1: Showtime kind of Viacom also did this thing in the 63 00:03:57,280 --> 00:03:59,520 Speaker 1: last episode we talked about, where it showed Viacom end 64 00:03:59,600 --> 00:04:04,640 Speaker 1: up by aggressively undercut HBO. They essentially muscled HBO out 65 00:04:04,680 --> 00:04:08,240 Speaker 1: of entire markets because they made this exclusive agreement with 66 00:04:08,320 --> 00:04:11,640 Speaker 1: the largest cable provider in the United States at that time. 67 00:04:12,000 --> 00:04:14,560 Speaker 1: So there's a little bit of a war going on. Yeah, 68 00:04:14,640 --> 00:04:17,760 Speaker 1: a little bit of a oh yeah, so yeah, that's 69 00:04:17,760 --> 00:04:20,159 Speaker 1: that's kind of the technical term. But Cinemax, you know, 70 00:04:20,360 --> 00:04:23,760 Speaker 1: starts doing pretty well. And also in nineteen HBO has 71 00:04:23,800 --> 00:04:27,480 Speaker 1: an affiliate in every single state in the United States. Now, 72 00:04:27,640 --> 00:04:29,640 Speaker 1: if you listen to our last episode, you realize that's 73 00:04:29,640 --> 00:04:32,240 Speaker 1: a big deal. This is the first time that any 74 00:04:32,320 --> 00:04:34,680 Speaker 1: channel has been able to do that, and it is 75 00:04:34,760 --> 00:04:38,320 Speaker 1: because they're using this satellite delivery system where the various 76 00:04:38,360 --> 00:04:42,839 Speaker 1: cable operators across the United States have the receiver dishes 77 00:04:42,960 --> 00:04:45,080 Speaker 1: that bring in the signal and then they can distribute 78 00:04:45,120 --> 00:04:47,560 Speaker 1: it to their customers. So now there's an affiliate in 79 00:04:47,600 --> 00:04:51,160 Speaker 1: every state. Remember, It started off justin Wilkes Bar, Pennsylvania. 80 00:04:51,640 --> 00:04:54,480 Speaker 1: Then it's spread through most of Pennsylvania, then to New York, 81 00:04:54,600 --> 00:04:56,880 Speaker 1: and then finally started to creep out into the rest 82 00:04:56,920 --> 00:05:00,520 Speaker 1: of the United States. So big moment for HBO. All 83 00:05:00,560 --> 00:05:03,160 Speaker 1: of this is allowing them to have a pretty incredible 84 00:05:03,240 --> 00:05:06,680 Speaker 1: profit considering that they only hit profitability a year or 85 00:05:06,680 --> 00:05:12,880 Speaker 1: two previously. Um. They their profits have grown from which 86 00:05:12,920 --> 00:05:17,000 Speaker 1: again understandable because now they're they're available in way more markets. 87 00:05:17,160 --> 00:05:21,120 Speaker 1: So the company is experiencing astronomical growth at this point 88 00:05:21,320 --> 00:05:24,320 Speaker 1: because because once the cable operators decide yes we will 89 00:05:24,360 --> 00:05:28,960 Speaker 1: carry HBO, that gives HBO the chance to target new 90 00:05:29,000 --> 00:05:31,719 Speaker 1: customer bases that they had no access to before. Oh sure, 91 00:05:31,880 --> 00:05:34,960 Speaker 1: um and there as a result able to offer their 92 00:05:34,960 --> 00:05:38,120 Speaker 1: employees some pretty ridiculous benefits. Um It kind of the 93 00:05:38,400 --> 00:05:40,400 Speaker 1: stories that I've read about it at the time remind 94 00:05:40,480 --> 00:05:43,360 Speaker 1: me a little bit of what happened after the Facebook boom, 95 00:05:43,839 --> 00:05:47,920 Speaker 1: um and and just that that tiny, free, free wheeling 96 00:05:48,000 --> 00:05:53,080 Speaker 1: startup culture that turned into this very large, very freewheeling 97 00:05:53,160 --> 00:05:56,560 Speaker 1: startup culture. It reminds me a lot of what Google 98 00:05:56,600 --> 00:06:00,400 Speaker 1: attempts to continue to push at the Google Plex and 99 00:06:00,440 --> 00:06:02,680 Speaker 1: of course, anyone who's worked in one of the satellite 100 00:06:02,720 --> 00:06:05,919 Speaker 1: offices of Google probably is very familiar with what things, 101 00:06:06,080 --> 00:06:08,760 Speaker 1: what what's available at the Googleplex versus what's available in 102 00:06:08,800 --> 00:06:12,760 Speaker 1: some of those satellite offices. So there was also some 103 00:06:12,880 --> 00:06:16,719 Speaker 1: tension between say HBO and the folks over at Time. 104 00:06:16,960 --> 00:06:19,560 Speaker 1: Keep in mind that at this point they're still all 105 00:06:19,600 --> 00:06:22,719 Speaker 1: working in the same building. They're working in Time Incorporate 106 00:06:22,760 --> 00:06:25,920 Speaker 1: its headquarters, and so you had sort of these freewheeling 107 00:06:26,000 --> 00:06:30,440 Speaker 1: young guys who are running HBO, who are having parties 108 00:06:30,480 --> 00:06:32,880 Speaker 1: all the time. They said that essentially, the the motto 109 00:06:32,920 --> 00:06:36,200 Speaker 1: at HBO is work, work, work, party, party, party and uh. 110 00:06:36,320 --> 00:06:39,359 Speaker 1: And so you know, any excuse to get together and 111 00:06:39,400 --> 00:06:41,880 Speaker 1: have a big dinner, and you know, they're still getting 112 00:06:41,880 --> 00:06:44,360 Speaker 1: stuff done. But they also took a lot of time 113 00:06:44,400 --> 00:06:48,239 Speaker 1: and developed this camaraderie. There's still some tension actually within 114 00:06:48,279 --> 00:06:52,640 Speaker 1: the company itself because a very different culture existed between 115 00:06:52,680 --> 00:06:57,680 Speaker 1: Time and Coorporated employees and HBO. Now in one Showtime 116 00:06:57,720 --> 00:07:00,000 Speaker 1: makes a big move, which you could argue at the time, 117 00:07:00,000 --> 00:07:03,719 Speaker 1: Time was mostly posturing. Uh. They decided to go to 118 00:07:03,960 --> 00:07:07,279 Speaker 1: a full twenty four hour schedule, right because if you 119 00:07:07,279 --> 00:07:09,760 Speaker 1: remember from our last episode. Again, at the time, these 120 00:07:09,760 --> 00:07:12,640 Speaker 1: cable stations would sign off at a certain point every night. Yeah, 121 00:07:12,680 --> 00:07:15,560 Speaker 1: like after midnight they'd say, all right, time, time to 122 00:07:15,560 --> 00:07:16,960 Speaker 1: go to bed, because we don't have anything else we 123 00:07:17,000 --> 00:07:19,760 Speaker 1: can show you. So showtime goes to twenty four hours, 124 00:07:20,160 --> 00:07:23,720 Speaker 1: not necessarily being able to support that with enough content 125 00:07:23,800 --> 00:07:27,280 Speaker 1: so that they're not incredibly repetitive, but HBO, not to 126 00:07:27,280 --> 00:07:31,200 Speaker 1: be outdone, follow suit. So later on in they also 127 00:07:31,280 --> 00:07:34,960 Speaker 1: become twenty four hour. Uh. And so you with anytime 128 00:07:35,000 --> 00:07:36,600 Speaker 1: you wanted to turn on HBO it was three in 129 00:07:36,600 --> 00:07:39,400 Speaker 1: the morning, you can turn on HBO and something would 130 00:07:39,480 --> 00:07:43,400 Speaker 1: be playing. Uh. And then they end up also hitting 131 00:07:43,400 --> 00:07:46,040 Speaker 1: the big time on one of those pre buy movies 132 00:07:46,080 --> 00:07:48,120 Speaker 1: we talked about. Now, this is where HBO puts in 133 00:07:48,200 --> 00:07:51,720 Speaker 1: money in the pre production phase for a movie and 134 00:07:51,760 --> 00:07:54,960 Speaker 1: in return, they get exclusive rights to show that movie 135 00:07:54,960 --> 00:07:57,840 Speaker 1: on HBO for a certain length of time. And in 136 00:07:57,840 --> 00:08:01,080 Speaker 1: this case, they hit the jackpot. Now, it's not a 137 00:08:01,120 --> 00:08:03,760 Speaker 1: movie that I think a lot of people are going 138 00:08:03,800 --> 00:08:06,760 Speaker 1: to be rip roar and excited about, but it was 139 00:08:07,240 --> 00:08:10,720 Speaker 1: a critically acclaimed success. It was on Golden Pond. Yeah, 140 00:08:10,760 --> 00:08:15,200 Speaker 1: it won multiple Academy Awards. YEP. So this exclusivity was 141 00:08:15,240 --> 00:08:17,840 Speaker 1: a big deal. It was a movie that people had 142 00:08:17,880 --> 00:08:20,360 Speaker 1: heard about, they knew that it was award winning, and 143 00:08:20,520 --> 00:08:23,000 Speaker 1: HBO was the only place you could see it outside 144 00:08:23,000 --> 00:08:25,080 Speaker 1: of the theater. Keep in mind, this is before the 145 00:08:25,120 --> 00:08:29,160 Speaker 1: home video craze starts, like, this is really before the 146 00:08:29,280 --> 00:08:33,320 Speaker 1: VCR has taken off, So HBO exclusivity in this case 147 00:08:33,480 --> 00:08:37,560 Speaker 1: was really important. Now they started moving to these output deals, 148 00:08:37,559 --> 00:08:39,720 Speaker 1: which is when a pay TV service agrees to take 149 00:08:39,760 --> 00:08:42,200 Speaker 1: on all the movies made by a certain studio over 150 00:08:42,280 --> 00:08:45,320 Speaker 1: a certain time span. Again, tends to be kind of 151 00:08:45,320 --> 00:08:48,160 Speaker 1: a grab bag situation. You might get a few big hits, 152 00:08:48,280 --> 00:08:50,440 Speaker 1: you might have some mediocre films in there that you know, 153 00:08:50,480 --> 00:08:52,560 Speaker 1: some people care about but most people don't. And you 154 00:08:52,559 --> 00:08:55,199 Speaker 1: could have some outright flops. So a little bit of 155 00:08:55,240 --> 00:08:58,200 Speaker 1: a risky situation. There's also this idea of a multi 156 00:08:58,320 --> 00:09:00,600 Speaker 1: year agreement which HBO would have agreed to pick up 157 00:09:00,640 --> 00:09:03,079 Speaker 1: a certain number of films the studio would produce over 158 00:09:03,120 --> 00:09:05,040 Speaker 1: a given period of time, but have a little bit 159 00:09:05,040 --> 00:09:09,440 Speaker 1: more safe which one like you made. We want twenty 160 00:09:09,440 --> 00:09:10,959 Speaker 1: movies that you guys are going to make over the 161 00:09:11,000 --> 00:09:14,640 Speaker 1: course of the next five years. Yeah, so once the 162 00:09:14,960 --> 00:09:17,920 Speaker 1: five year period starts coming up. You're like, well, now 163 00:09:18,840 --> 00:09:21,480 Speaker 1: we're stuck. Yeah, but but we got to be choosy 164 00:09:21,480 --> 00:09:25,400 Speaker 1: at the beginning. Either way, these exclusivity deals were really 165 00:09:25,440 --> 00:09:29,200 Speaker 1: really expensive, and it meant that it was tough to 166 00:09:30,200 --> 00:09:32,800 Speaker 1: to make a profit unless you continuously grow. Now, at 167 00:09:32,840 --> 00:09:36,400 Speaker 1: this time that wasn't a problem because cable was still 168 00:09:36,520 --> 00:09:39,680 Speaker 1: entering in lots more markets, which meant you had access 169 00:09:39,720 --> 00:09:42,439 Speaker 1: to brand new customers. So in the early days kind 170 00:09:42,440 --> 00:09:45,400 Speaker 1: of automatically growing. Yeah. Yeah, you didn't have to worry 171 00:09:45,440 --> 00:09:48,480 Speaker 1: about about boosting your your customer base so much because 172 00:09:48,480 --> 00:09:51,160 Speaker 1: people were still eager to join. It wasn't until a 173 00:09:51,200 --> 00:09:53,000 Speaker 1: couple of years later that things got a little tougher, 174 00:09:53,000 --> 00:09:56,080 Speaker 1: but we'll get there. So companies were paying these big 175 00:09:56,080 --> 00:09:58,080 Speaker 1: bucks for exclusive rights to movies for just a couple 176 00:09:58,120 --> 00:10:02,680 Speaker 1: of years. Eventually those exclusivity rights would expire and those 177 00:10:02,720 --> 00:10:06,240 Speaker 1: movies could be carried on other pay television stations like 178 00:10:06,240 --> 00:10:09,480 Speaker 1: Showtime could pick it up. So in the long run, 179 00:10:09,920 --> 00:10:14,000 Speaker 1: you would have a bank of movies that was essentially 180 00:10:14,040 --> 00:10:16,680 Speaker 1: identical to your competitors. So for a couple of years 181 00:10:16,679 --> 00:10:19,400 Speaker 1: you'd have exclusivity, but it wasn't a long term You 182 00:10:19,400 --> 00:10:21,760 Speaker 1: would wind up evening out. Yeah. So yeah, one of 183 00:10:21,760 --> 00:10:24,320 Speaker 1: those things that that you know, they really had to 184 00:10:24,320 --> 00:10:27,200 Speaker 1: look at a little bit later because it was just 185 00:10:27,320 --> 00:10:30,120 Speaker 1: it was not the best way to continuously grow your revenue. 186 00:10:31,000 --> 00:10:35,560 Speaker 1: Now three, we get one of my favorite stories. Yeah, yeah, okay, 187 00:10:35,600 --> 00:10:38,040 Speaker 1: this this is a big one. So so twenty century 188 00:10:38,080 --> 00:10:42,400 Speaker 1: Fox negotiated to get Star Wars onto pay TV. Yes, 189 00:10:43,000 --> 00:10:46,839 Speaker 1: so Star Wars big movie in ninety seven. Of course, 190 00:10:46,880 --> 00:10:48,800 Speaker 1: that's when Return of the Jedi came out. So the 191 00:10:48,840 --> 00:10:51,520 Speaker 1: original trilogy, you know, the only one that exists, is 192 00:10:51,520 --> 00:10:54,560 Speaker 1: complete at this time. And Star Wars itself, the movie 193 00:10:54,600 --> 00:10:58,520 Speaker 1: that started it all. Uh, the second big blockbuster following 194 00:10:58,600 --> 00:11:03,160 Speaker 1: Jaws from Live is available to go on to pay TV. However, 195 00:11:03,559 --> 00:11:05,880 Speaker 1: it's not an exclusive deal. This is something they they 196 00:11:05,920 --> 00:11:09,680 Speaker 1: negotiate to put it on every page television station essentially, 197 00:11:09,760 --> 00:11:12,480 Speaker 1: so Showtime's gonna get HBO is gonna get it now. Normally, 198 00:11:12,920 --> 00:11:16,640 Speaker 1: the way these channels like to try and and position 199 00:11:16,800 --> 00:11:19,920 Speaker 1: the big ticket items that they get is to wait 200 00:11:20,360 --> 00:11:25,360 Speaker 1: and put it out on prime time preferably like eight pm. Yeah, Friday, Saturday, 201 00:11:25,360 --> 00:11:28,480 Speaker 1: Sunday night, Sunday night, probably preferably to to really get 202 00:11:28,520 --> 00:11:30,720 Speaker 1: all of the home viewers in right, so you would 203 00:11:30,840 --> 00:11:33,480 Speaker 1: you know when the weekend would come around eight pm. 204 00:11:33,520 --> 00:11:35,480 Speaker 1: That's when you could be guaranteed that that was when 205 00:11:35,520 --> 00:11:39,840 Speaker 1: the biggest movies were going to be uh showcased on 206 00:11:39,960 --> 00:11:43,160 Speaker 1: these pay television stations. However, Star Wars was such a 207 00:11:43,200 --> 00:11:46,800 Speaker 1: big deal, being that summer blockbuster, that both Showtime and 208 00:11:46,920 --> 00:11:50,920 Speaker 1: HBO wanted to make sure they took advantage of it 209 00:11:50,960 --> 00:11:53,160 Speaker 1: and did not allow the other channel to show it 210 00:11:53,200 --> 00:11:55,800 Speaker 1: before they did. So HBO didn't want Showtime to show 211 00:11:55,800 --> 00:11:58,079 Speaker 1: it first. Showtime didn't want HBO to show it first. 212 00:11:58,240 --> 00:12:01,800 Speaker 1: According to the agreement they signed with Fox, neither could 213 00:12:01,840 --> 00:12:06,120 Speaker 1: show it any time before six am on February one, 214 00:12:06,240 --> 00:12:08,640 Speaker 1: So both of them scheduled the first showing of Star 215 00:12:08,679 --> 00:12:12,280 Speaker 1: Wars to be six am, February first, even knowing that 216 00:12:12,280 --> 00:12:15,240 Speaker 1: that's not an ideal time for their customers. They just 217 00:12:15,240 --> 00:12:16,720 Speaker 1: didn't want the other one to get the scoop, and 218 00:12:16,840 --> 00:12:20,560 Speaker 1: HBO went a step further. So remember in that last 219 00:12:20,600 --> 00:12:22,880 Speaker 1: episode where I talked about cable being a cutthroat business 220 00:12:22,880 --> 00:12:27,640 Speaker 1: and nothing is really you know, off limits, that includes bribery. 221 00:12:27,760 --> 00:12:31,360 Speaker 1: That's probably a strong word. HBO didn't bribe twentieth century Fox. 222 00:12:31,400 --> 00:12:34,440 Speaker 1: Well they paid them more money. They paid them more money. 223 00:12:34,480 --> 00:12:36,520 Speaker 1: That's very much like a bribe. Yeah, so that they 224 00:12:36,559 --> 00:12:39,920 Speaker 1: could be allowed to show Star Wars one minute after 225 00:12:40,040 --> 00:12:44,040 Speaker 1: midnight on February one, so six hours before showtime could 226 00:12:44,120 --> 00:12:46,920 Speaker 1: although they weren't allowed to announce it. Yeah, so you 227 00:12:47,000 --> 00:12:51,319 Speaker 1: had to have been watching HBO at one midnight after 228 00:12:51,400 --> 00:12:54,920 Speaker 1: midnight on February one to have noticed that this had happened. However, 229 00:12:55,640 --> 00:12:59,600 Speaker 1: the they were able to say legitimately that they were 230 00:12:59,640 --> 00:13:03,280 Speaker 1: the first to pay television station to carry Star Wars, 231 00:13:03,360 --> 00:13:05,920 Speaker 1: and that actually carried some weight. There were people who said, 232 00:13:05,960 --> 00:13:08,640 Speaker 1: wait a minute, why is HBO showing it before showtime? 233 00:13:08,679 --> 00:13:10,960 Speaker 1: I should have HBO not showtime, despite the fact that 234 00:13:11,000 --> 00:13:14,080 Speaker 1: we're talking about a six hour window when most people 235 00:13:14,120 --> 00:13:18,920 Speaker 1: wouldn't be watching television anyway. Um that that part didn't matter. 236 00:13:19,080 --> 00:13:23,560 Speaker 1: So very interesting that this battle happened. It was another 237 00:13:23,600 --> 00:13:26,000 Speaker 1: expensive battle, but an important one. As we all know, 238 00:13:26,080 --> 00:13:27,920 Speaker 1: Star Wars one of the most important pieces of art 239 00:13:28,400 --> 00:13:33,400 Speaker 1: created in the history. There's like the Mona Lisa Star 240 00:13:33,480 --> 00:13:37,960 Speaker 1: Wars David, that's the order it goes in. So three 241 00:13:38,160 --> 00:13:42,560 Speaker 1: also was there another amazing piece of art premiered on 242 00:13:42,720 --> 00:13:46,439 Speaker 1: HBO and original program aimed at children. Yeah, Jim Henson's 243 00:13:46,480 --> 00:13:49,599 Speaker 1: Fraggle Rock yep down in Fraggle Rock. So I was 244 00:13:49,679 --> 00:13:53,400 Speaker 1: a huge Fraggle Rock fan back in the day. Um. 245 00:13:53,480 --> 00:13:55,959 Speaker 1: They actually came to dragon Con and we covered the 246 00:13:56,000 --> 00:13:58,640 Speaker 1: dragon Con parade. We actually shut this coverage. Me and 247 00:13:58,640 --> 00:14:01,040 Speaker 1: Ben Bowen and Lauren You were there and we did 248 00:14:01,080 --> 00:14:03,880 Speaker 1: it like Macy's Thanksgiving Day Parade style. It never it 249 00:14:04,000 --> 00:14:06,240 Speaker 1: never saw the light of day, probably because there were 250 00:14:06,280 --> 00:14:09,000 Speaker 1: long stretches where nothing was happening. We we we haven't 251 00:14:09,000 --> 00:14:13,800 Speaker 1: had anyone had time to edit the whole thing really long. Yeah, 252 00:14:13,840 --> 00:14:16,200 Speaker 1: but were in it. They were in it. And there 253 00:14:16,360 --> 00:14:18,360 Speaker 1: is a photo gallery that I did. I was running 254 00:14:18,360 --> 00:14:21,200 Speaker 1: a still camera through the parade and so and and 255 00:14:21,240 --> 00:14:24,160 Speaker 1: she she waved at me. Yeah. I got choked up. Yeah, 256 00:14:24,200 --> 00:14:26,640 Speaker 1: I got choked up watching the Fraggles. I mean, I'm 257 00:14:26,640 --> 00:14:28,800 Speaker 1: not I'm not embarrassed to admit it. The Fraggles are 258 00:14:28,800 --> 00:14:30,280 Speaker 1: meant a lot to be I'm getting a little tiory 259 00:14:30,360 --> 00:14:33,400 Speaker 1: right now. In fact, all right, Well that was the 260 00:14:33,440 --> 00:14:37,080 Speaker 1: first segment of HBO Story Part two. We've got more 261 00:14:37,160 --> 00:14:40,160 Speaker 1: chapters here. The Game of Thrones, I think I guess 262 00:14:40,200 --> 00:14:51,000 Speaker 1: we'll find out, but first let's take a quick break. Now, 263 00:14:51,080 --> 00:14:54,720 Speaker 1: Jim Henson had already had a relationship with HBO. HBO 264 00:14:54,760 --> 00:14:57,680 Speaker 1: had produced a couple of years earlier a Christmas special, 265 00:14:57,680 --> 00:15:01,280 Speaker 1: immitt Otter's jug Band Christmas. So now Jim Hinson had 266 00:15:01,320 --> 00:15:04,720 Speaker 1: the the freedom to create this entire children's series, which 267 00:15:04,800 --> 00:15:09,080 Speaker 1: lasted five seasons, and it ended up being a big success. 268 00:15:09,120 --> 00:15:12,560 Speaker 1: It was one of the few breakaway successes of children's 269 00:15:12,600 --> 00:15:15,920 Speaker 1: programming on HBO. A lot of the other programming UH 270 00:15:16,080 --> 00:15:19,080 Speaker 1: people liked the idea of but no one ever bothered 271 00:15:19,120 --> 00:15:22,480 Speaker 1: to watch, so Fraggle Rock was not among that. That 272 00:15:22,600 --> 00:15:25,840 Speaker 1: was an incredibly popular show, in fact, so popular that 273 00:15:26,160 --> 00:15:30,280 Speaker 1: HBO would end up making other versions of Fraggle Rock 274 00:15:30,480 --> 00:15:33,880 Speaker 1: for other countries, and some of them would have their 275 00:15:33,880 --> 00:15:37,560 Speaker 1: own version of Doc and Sprocket that wouldn't necessarily be 276 00:15:37,600 --> 00:15:39,840 Speaker 1: called Doc and Sprocket, and they would be different people, 277 00:15:39,840 --> 00:15:41,280 Speaker 1: like the I think in England it was like a 278 00:15:41,360 --> 00:15:45,720 Speaker 1: lighthouse keeper who was really crabby. But anyway, they would 279 00:15:45,760 --> 00:15:48,320 Speaker 1: also be dubbed into different languages, so everyone had their 280 00:15:48,320 --> 00:15:50,960 Speaker 1: own version of Fraggle Rock, which was kind of cool. 281 00:15:51,000 --> 00:15:53,840 Speaker 1: It wasn't just a you know, it wasn't just switching 282 00:15:53,840 --> 00:15:56,520 Speaker 1: out the soundtrack. It was actually Taylor made to These 283 00:15:56,600 --> 00:15:58,960 Speaker 1: Nations and another series that premiered that year, and I 284 00:15:59,000 --> 00:16:02,600 Speaker 1: remember the series too, was not necessarily The News, which 285 00:16:02,640 --> 00:16:05,240 Speaker 1: was kind of a news parody sketch comedy show. It 286 00:16:05,320 --> 00:16:08,800 Speaker 1: was the news thing was kind of the the conceit 287 00:16:09,520 --> 00:16:12,680 Speaker 1: the book ends for these various sketches that may or 288 00:16:12,680 --> 00:16:15,680 Speaker 1: may not be very loosely connected, right, And it was 289 00:16:15,760 --> 00:16:19,360 Speaker 1: kind of Brian's very first television writing gig also uh, 290 00:16:19,520 --> 00:16:23,200 Speaker 1: not consistently very good, but but one of the examples 291 00:16:23,280 --> 00:16:26,960 Speaker 1: of HBO getting into original programming, which is again they 292 00:16:27,000 --> 00:16:30,880 Speaker 1: started looking at how to differentiate themselves from the showtimes 293 00:16:30,880 --> 00:16:33,920 Speaker 1: of the world, and these exclusivity deals, like we said, 294 00:16:34,080 --> 00:16:38,720 Speaker 1: could be really really expensive, so maybe making original programming 295 00:16:38,800 --> 00:16:41,760 Speaker 1: would have been a better approach. Now they learned that 296 00:16:41,880 --> 00:16:45,120 Speaker 1: making good original programming is very tricky. It might not 297 00:16:45,160 --> 00:16:48,200 Speaker 1: be expensive, but it's very hard to do, and getting 298 00:16:48,200 --> 00:16:52,200 Speaker 1: people to pay attention is also sometimes tricky. Right. Yeah, 299 00:16:52,200 --> 00:16:54,840 Speaker 1: Sometimes they would make an amazing show that the critics 300 00:16:54,920 --> 00:16:57,720 Speaker 1: loved in nobody watched. We will talk about several of 301 00:16:57,760 --> 00:17:01,920 Speaker 1: those in our third episode. But meanwhile, twelve years after 302 00:17:01,960 --> 00:17:05,160 Speaker 1: its inception, HBO finally got their own offices. Yeah, they 303 00:17:05,200 --> 00:17:09,000 Speaker 1: moved over into a building on Avenue, and it had 304 00:17:09,040 --> 00:17:13,160 Speaker 1: the nickname the flash Cube. All right, kids years ago, 305 00:17:13,640 --> 00:17:17,840 Speaker 1: like in the eighties, cameras which had film in them, 306 00:17:18,160 --> 00:17:22,480 Speaker 1: none of this digital stuff also had flash you know, flashes, 307 00:17:22,520 --> 00:17:25,800 Speaker 1: like a separate flash unit that you had to attach 308 00:17:25,840 --> 00:17:28,840 Speaker 1: to the top little cube that would flash light so 309 00:17:28,920 --> 00:17:31,080 Speaker 1: you could get some light on that image you're trying 310 00:17:31,119 --> 00:17:34,000 Speaker 1: to capture onto film. That's why it was called the 311 00:17:34,000 --> 00:17:36,359 Speaker 1: flash cube because the building looked like one. So this 312 00:17:36,480 --> 00:17:39,040 Speaker 1: building that looked like something you've never seen looked exactly 313 00:17:39,080 --> 00:17:43,000 Speaker 1: like just just like that thing. So now you had 314 00:17:43,560 --> 00:17:46,679 Speaker 1: a building where the actual departments could all sit together. 315 00:17:47,160 --> 00:17:50,159 Speaker 1: The divisions were no longer divided. They could all be 316 00:17:50,240 --> 00:17:54,040 Speaker 1: in a cohesive unit. So that amazing camaraderie they had 317 00:17:54,080 --> 00:17:56,280 Speaker 1: developed back at Time Incorporated, when they had this kind 318 00:17:56,280 --> 00:18:00,800 Speaker 1: of startup mentality went away. What's completely ruined. Yeah, suddenly 319 00:18:00,800 --> 00:18:05,360 Speaker 1: they were physically closer and yet emotionally so distant. Um. 320 00:18:05,400 --> 00:18:07,119 Speaker 1: It turned out that HBO was starting to become more 321 00:18:07,119 --> 00:18:10,000 Speaker 1: of a business, less of this kind of startup entrepreneur 322 00:18:10,119 --> 00:18:14,240 Speaker 1: approach and I had more of a of a corporate structure. Yeah, 323 00:18:14,280 --> 00:18:17,680 Speaker 1: And it also was when HBO started to notice that 324 00:18:18,400 --> 00:18:21,320 Speaker 1: growing as a business was going to get very difficult, 325 00:18:21,359 --> 00:18:24,320 Speaker 1: they did what was called hitting the wall. The wall 326 00:18:24,320 --> 00:18:27,920 Speaker 1: in this case was saturation. You had a saturation point 327 00:18:28,000 --> 00:18:31,119 Speaker 1: where cable had pretty much entered all the markets that 328 00:18:31,200 --> 00:18:33,679 Speaker 1: was gonna go into. So that meant that you no 329 00:18:33,720 --> 00:18:37,320 Speaker 1: longer could expect to suddenly have access to twenty thousand 330 00:18:37,320 --> 00:18:41,919 Speaker 1: new subscribers potential new subscribers because someone finally built the 331 00:18:41,920 --> 00:18:44,959 Speaker 1: infrastructure out to this one region. Now all the regions 332 00:18:44,960 --> 00:18:47,159 Speaker 1: pretty much had cable, so there were not going to 333 00:18:47,280 --> 00:18:50,400 Speaker 1: be any of these these gift baskets of potential customers 334 00:18:50,440 --> 00:18:52,640 Speaker 1: just arriving at HBO. They were gonna have to work 335 00:18:52,680 --> 00:18:55,280 Speaker 1: for it. And also on top of that, they had 336 00:18:55,280 --> 00:18:58,680 Speaker 1: a churn rate going on, right. So churn rate is 337 00:18:58,720 --> 00:19:03,000 Speaker 1: when you lose a certain number of customers over a 338 00:19:03,040 --> 00:19:05,639 Speaker 1: course of a general amount of time. So there's was 339 00:19:05,680 --> 00:19:10,280 Speaker 1: about two per month back in which means that in 340 00:19:10,359 --> 00:19:13,240 Speaker 1: order to just stay even, you have to grow by 341 00:19:13,280 --> 00:19:16,320 Speaker 1: two percent, right to to just maintain the same number 342 00:19:16,320 --> 00:19:17,960 Speaker 1: of customers from the beginning of the month to the 343 00:19:18,040 --> 00:19:19,840 Speaker 1: end of the month. If you want to grow beyond that, 344 00:19:19,880 --> 00:19:21,960 Speaker 1: then obviously you have to get more than two percent 345 00:19:22,119 --> 00:19:25,240 Speaker 1: new customers to replace the two percent who who left. Now, 346 00:19:25,320 --> 00:19:27,560 Speaker 1: some of the people who left they left because they 347 00:19:27,560 --> 00:19:30,600 Speaker 1: were relocating and eventually maybe they come back, but some 348 00:19:30,680 --> 00:19:32,359 Speaker 1: of them were just saying, oh, I don't want to 349 00:19:32,480 --> 00:19:35,560 Speaker 1: have this expense anymore. So you had to convince them, hey, 350 00:19:35,840 --> 00:19:38,680 Speaker 1: we're worth the money, or you had to convince new people, hey, 351 00:19:38,680 --> 00:19:40,640 Speaker 1: we're worth the money. And now there were fewer new 352 00:19:40,680 --> 00:19:43,640 Speaker 1: people to get access to. So this was a very 353 00:19:43,680 --> 00:19:48,080 Speaker 1: scary time at HBO. You had this young company that 354 00:19:48,200 --> 00:19:52,120 Speaker 1: had been used to this incredible growth suddenly realizing, oh, 355 00:19:52,240 --> 00:19:54,200 Speaker 1: things are not going to be as easy anymore. We're 356 00:19:54,280 --> 00:19:57,679 Speaker 1: not going to have this essentially blank check that we 357 00:19:57,720 --> 00:20:00,399 Speaker 1: can hand out for these exclusivity deals. We're not going 358 00:20:00,440 --> 00:20:03,360 Speaker 1: to have this this endless line of new customers coming 359 00:20:03,359 --> 00:20:05,280 Speaker 1: in through the door. What are we gonna do? And 360 00:20:05,280 --> 00:20:07,040 Speaker 1: in fact, one of the first things they had to 361 00:20:07,080 --> 00:20:10,600 Speaker 1: do was layoff about a hundred and twenty five employees, 362 00:20:10,640 --> 00:20:13,200 Speaker 1: which was the first time in HBO's history that people 363 00:20:13,240 --> 00:20:16,640 Speaker 1: had been let go like that. Also, around the same time, 364 00:20:16,640 --> 00:20:20,240 Speaker 1: the VCR became a thing, and that was a boy 365 00:20:20,320 --> 00:20:24,520 Speaker 1: talk about a big bite out of the business. So 366 00:20:25,440 --> 00:20:27,719 Speaker 1: keep in mind, remember this is the time when HBO 367 00:20:27,960 --> 00:20:31,960 Speaker 1: their main purpose was to create way for people to 368 00:20:32,000 --> 00:20:35,000 Speaker 1: watch these movies that were uncut and uncensored that wouldn't 369 00:20:35,040 --> 00:20:38,320 Speaker 1: be carried on broadcast television. But now, with the birth 370 00:20:38,359 --> 00:20:41,080 Speaker 1: of the VCR and the growth of the home video market, 371 00:20:41,119 --> 00:20:42,920 Speaker 1: where you could go to a rental store and rent 372 00:20:42,960 --> 00:20:45,600 Speaker 1: a movie, you can get access to all sorts of 373 00:20:45,680 --> 00:20:49,840 Speaker 1: movies beyond the what we'll call the playlist that HBO 374 00:20:49,920 --> 00:20:52,760 Speaker 1: had access to. Remember, HBO is paying licensing fees to 375 00:20:52,760 --> 00:20:55,040 Speaker 1: be able to show these movies, so they don't have 376 00:20:55,119 --> 00:20:57,560 Speaker 1: licenses for every movie. They have to pick and choose, 377 00:20:57,560 --> 00:21:00,600 Speaker 1: and sometimes they pick before they even know what the 378 00:21:00,640 --> 00:21:02,320 Speaker 1: movie is going to be like, and sometimes they lose 379 00:21:02,359 --> 00:21:04,160 Speaker 1: out on that. Oh sure, and they can only air 380 00:21:04,280 --> 00:21:06,200 Speaker 1: so many things at a time, They can only pay 381 00:21:06,280 --> 00:21:07,879 Speaker 1: to keep so many things on the air at a 382 00:21:07,880 --> 00:21:10,719 Speaker 1: single time, and whatever they happen to have might not 383 00:21:10,760 --> 00:21:14,240 Speaker 1: be what you feel like watching. Once once stores started 384 00:21:14,359 --> 00:21:18,920 Speaker 1: carrying rentable VHS tapes, it was I mean for for 385 00:21:19,520 --> 00:21:22,080 Speaker 1: younger listeners, I mean, like I have a hard time 386 00:21:22,119 --> 00:21:25,680 Speaker 1: imagining this and I remember VHS tapes. I remember all 387 00:21:25,680 --> 00:21:28,359 Speaker 1: of that very clearly, and it still sounds crazy to 388 00:21:28,400 --> 00:21:30,280 Speaker 1: me that you that there was a time when you 389 00:21:30,320 --> 00:21:33,080 Speaker 1: couldn't just watch whatever you wanted. Yeah. Now, you would 390 00:21:33,119 --> 00:21:35,120 Speaker 1: go into the store and you would hope that that 391 00:21:35,240 --> 00:21:39,080 Speaker 1: one copy of Young Einstein was still available, because you 392 00:21:39,080 --> 00:21:41,639 Speaker 1: know what a breakaway hit that was. Um, hey, that 393 00:21:41,680 --> 00:21:44,879 Speaker 1: was an important film. Hey, yeah, who's serious one of 394 00:21:44,880 --> 00:21:47,680 Speaker 1: my heroes. Okay, I'm not don't take any thing away 395 00:21:47,720 --> 00:21:50,879 Speaker 1: from the series, but yeah, just just the fact that 396 00:21:50,920 --> 00:21:52,959 Speaker 1: you go into the store, you know, and hope that 397 00:21:53,000 --> 00:21:55,120 Speaker 1: the thing is the movie that you want is there. 398 00:21:55,400 --> 00:21:57,840 Speaker 1: There was an illusion that you had a more choice 399 00:21:57,960 --> 00:22:01,560 Speaker 1: with the home video market. Now, the true was dependent 400 00:22:01,600 --> 00:22:05,080 Speaker 1: upon how many copies of a certain movie the rental 401 00:22:05,119 --> 00:22:07,320 Speaker 1: store had and how big a customer base it had, 402 00:22:07,359 --> 00:22:09,600 Speaker 1: because there might be some movies that, unless you just 403 00:22:09,680 --> 00:22:13,320 Speaker 1: looked out, were constantly being checked out. So so it 404 00:22:13,359 --> 00:22:17,040 Speaker 1: seems even if Blockbuster had thirty copies of whatever it was, 405 00:22:17,200 --> 00:22:20,520 Speaker 1: it might all be gone right. So so hypothetically you 406 00:22:20,560 --> 00:22:23,760 Speaker 1: had a much larger choice, but in practice it may 407 00:22:23,840 --> 00:22:25,600 Speaker 1: or may not have happened. And either way, it was 408 00:22:25,640 --> 00:22:27,959 Speaker 1: probably more than just Beast Master over and over. Yes, 409 00:22:28,600 --> 00:22:31,400 Speaker 1: HBO started getting the There was a joke that HBOS 410 00:22:31,440 --> 00:22:36,040 Speaker 1: actually stood for Hey beast Masters on um. Yeah, that 411 00:22:36,040 --> 00:22:39,040 Speaker 1: that was the That was again a comment about the 412 00:22:39,080 --> 00:22:42,520 Speaker 1: repeats UH and UH, which were the movies that had 413 00:22:42,560 --> 00:22:46,639 Speaker 1: been shown multiple times within a certain licensing period, and returns, 414 00:22:46,680 --> 00:22:49,320 Speaker 1: which were movies that were still under license but had 415 00:22:49,520 --> 00:22:52,520 Speaker 1: been pulled out of the circulation of movies shown on 416 00:22:52,640 --> 00:22:56,359 Speaker 1: HBO and then reinserted later on. So you know, HBO 417 00:22:56,560 --> 00:22:59,320 Speaker 1: licensed out these movies and those licenses were very specific. 418 00:22:59,359 --> 00:23:02,600 Speaker 1: They would say you can show this movie X number 419 00:23:02,600 --> 00:23:06,920 Speaker 1: of times and during these times of day, Like, they 420 00:23:06,920 --> 00:23:09,399 Speaker 1: were very the way you had to program and HBO 421 00:23:09,720 --> 00:23:13,000 Speaker 1: schedule was dependent upon these licenses because some of them 422 00:23:13,000 --> 00:23:15,560 Speaker 1: were like, Okay, we don't want you showing this this 423 00:23:15,640 --> 00:23:19,280 Speaker 1: movie before six pm. Well then they would have to 424 00:23:19,359 --> 00:23:22,840 Speaker 1: plan that out, you know, before six pm and after midnight. 425 00:23:22,880 --> 00:23:25,320 Speaker 1: I'm sure that FCC regulations and stuff like that would 426 00:23:25,359 --> 00:23:30,480 Speaker 1: prevent some content from being shown during HBO specifically police 427 00:23:30,520 --> 00:23:33,399 Speaker 1: themselves and put they would not allow anything that was 428 00:23:33,880 --> 00:23:36,359 Speaker 1: R rated to go on before eight p m. So 429 00:23:36,400 --> 00:23:39,200 Speaker 1: it had to be after eight pm to to go 430 00:23:39,320 --> 00:23:43,920 Speaker 1: onto HBO Uh, there was largely a self imposed rule, 431 00:23:44,080 --> 00:23:45,640 Speaker 1: and it was just an easy one for them to 432 00:23:45,640 --> 00:23:47,720 Speaker 1: to go with because they knew that that would be 433 00:23:48,080 --> 00:23:52,639 Speaker 1: something that would most likely fit their subscribers desires and 434 00:23:52,640 --> 00:23:55,360 Speaker 1: would at least mollify the kind of groups that would 435 00:23:55,359 --> 00:23:59,600 Speaker 1: have had complaints otherwise exactly most of them. Yes. So anyway, 436 00:23:59,600 --> 00:24:01,960 Speaker 1: those life since has put limiting factors on HBO how 437 00:24:02,000 --> 00:24:04,240 Speaker 1: many movies they would have access to it a given time, 438 00:24:04,280 --> 00:24:06,560 Speaker 1: how many, how frequently they could show it. But then 439 00:24:06,760 --> 00:24:10,600 Speaker 1: HBO also had this model, this business model, where the 440 00:24:10,640 --> 00:24:14,760 Speaker 1: idea was, we're going to get this pool of movies. 441 00:24:15,000 --> 00:24:17,560 Speaker 1: We're gonna make a schedule where we're going to show 442 00:24:17,600 --> 00:24:20,399 Speaker 1: these movies at different times on different days, so that 443 00:24:20,400 --> 00:24:24,040 Speaker 1: our customers can look at the schedule and say, oh, 444 00:24:24,119 --> 00:24:25,760 Speaker 1: the movie I want to see is gonna be on 445 00:24:25,800 --> 00:24:28,679 Speaker 1: at six pm on Wednesday. I'll make sure to watch 446 00:24:28,720 --> 00:24:31,840 Speaker 1: it on Wednesday at six pm. But instead, what they 447 00:24:31,840 --> 00:24:33,960 Speaker 1: found that was that people were treating HBO like it 448 00:24:34,040 --> 00:24:38,240 Speaker 1: was a television channel. That's ridiculous. Well, I mean, you know, 449 00:24:38,440 --> 00:24:41,080 Speaker 1: once again, once BCRs entered the picture and they could 450 00:24:41,119 --> 00:24:43,760 Speaker 1: just record something, yeah, it didn't matter so much about 451 00:24:43,760 --> 00:24:46,440 Speaker 1: when it was on, but they and also yeah, someone 452 00:24:46,440 --> 00:24:48,360 Speaker 1: would just turn on the TV and just be like, oh, 453 00:24:48,400 --> 00:24:52,800 Speaker 1: what's on right now? Okay, yeah, oh it's beast Master again. Yeah. 454 00:24:53,119 --> 00:24:55,360 Speaker 1: That was the problem was that people were not treating 455 00:24:55,359 --> 00:24:58,240 Speaker 1: it like the way the company had thought of the 456 00:24:58,280 --> 00:25:02,200 Speaker 1: service and we the movie theater, which yeah, exactly. We've 457 00:25:02,240 --> 00:25:04,760 Speaker 1: seen this happen in other industries, right, We've seen it 458 00:25:04,800 --> 00:25:09,120 Speaker 1: where someone creates a service, let's say Twitter, great example, 459 00:25:09,440 --> 00:25:11,720 Speaker 1: someone creates a service and they have in their mind 460 00:25:11,920 --> 00:25:13,639 Speaker 1: the way the service is going to be used by 461 00:25:13,640 --> 00:25:16,800 Speaker 1: the customers, and customers go, oh, this great thing for 462 00:25:16,840 --> 00:25:20,440 Speaker 1: this entirely different purpose. And so if you're a good company, 463 00:25:21,000 --> 00:25:23,719 Speaker 1: you move with the customers and you don't try and 464 00:25:23,800 --> 00:25:26,960 Speaker 1: force them into a model that they don't want, because 465 00:25:27,000 --> 00:25:31,160 Speaker 1: otherwise your your business suffers. So HBO started seeing, oh, 466 00:25:31,200 --> 00:25:33,560 Speaker 1: we're gonna have to think of some other way to 467 00:25:33,680 --> 00:25:36,600 Speaker 1: change up our programming so that we don't have the 468 00:25:36,680 --> 00:25:40,240 Speaker 1: same you know, list of movies showing so frequently, because 469 00:25:40,240 --> 00:25:42,440 Speaker 1: we're going to end up driving customers away. And we're 470 00:25:42,480 --> 00:25:44,800 Speaker 1: already having to deal with this churn issue and the 471 00:25:44,840 --> 00:25:48,760 Speaker 1: saturation issue. So all of these factors we're going into 472 00:25:49,440 --> 00:25:52,840 Speaker 1: HBO and the executive's minds thinking all right, we gotta 473 00:25:52,920 --> 00:25:57,040 Speaker 1: we gotta think of a new way of approaching content. Meanwhile, 474 00:25:57,720 --> 00:25:59,640 Speaker 1: Michael Folks, who we had talked about in the last 475 00:25:59,680 --> 00:26:03,600 Speaker 1: episod So, who had come over from a talent agency 476 00:26:03,920 --> 00:26:06,600 Speaker 1: and had joined HBO. He becomes the head of HBO. 477 00:26:06,880 --> 00:26:10,520 Speaker 1: He replaced Frank Beyondi, who had pretty much been forced out. 478 00:26:10,760 --> 00:26:15,480 Speaker 1: He had made a really expensive licensing agreement with Columbia Pictures. Uh, 479 00:26:15,600 --> 00:26:18,440 Speaker 1: there's a little movie called Ghostbusters that nearly broke the 480 00:26:18,480 --> 00:26:21,800 Speaker 1: bank for HBO. We're talking like millions of dollars, like 481 00:26:21,840 --> 00:26:24,639 Speaker 1: forty million dollars just to have this one movie because 482 00:26:24,680 --> 00:26:27,919 Speaker 1: they had agreed beforehand, before knowing what this was going 483 00:26:27,960 --> 00:26:29,960 Speaker 1: to be, and there was no cap on how much 484 00:26:30,000 --> 00:26:32,760 Speaker 1: they could spend. So that deal pretty much melt the 485 00:26:32,840 --> 00:26:34,879 Speaker 1: in for Beyondi. Yeah, well that that was. That was 486 00:26:34,920 --> 00:26:37,960 Speaker 1: the first place that I saw Ghostbusters. So wow, I 487 00:26:37,960 --> 00:26:41,719 Speaker 1: saw it in the theater opening day. The librarians, what 488 00:26:41,760 --> 00:26:46,359 Speaker 1: are we? I was two. We've got more to say 489 00:26:46,440 --> 00:26:49,640 Speaker 1: about this chapter in HBO's history, but before we get 490 00:26:49,640 --> 00:27:00,840 Speaker 1: to that, let's take another quick break. All Right, We're 491 00:27:00,960 --> 00:27:05,080 Speaker 1: up to nineteen five and that's what HBO decided to 492 00:27:05,119 --> 00:27:09,280 Speaker 1: launch a big summer advertising campaign. Now. They they saw 493 00:27:09,400 --> 00:27:11,679 Speaker 1: that the wall had hit, They saw this saturation in 494 00:27:11,760 --> 00:27:15,400 Speaker 1: churn issue, they saw the exclusivity issue, and they thought, 495 00:27:15,400 --> 00:27:17,800 Speaker 1: how can we attract more customers so that we can 496 00:27:17,840 --> 00:27:20,720 Speaker 1: continue to grow, And they decided that they would really 497 00:27:20,760 --> 00:27:24,080 Speaker 1: concentrate in an advertising campaign that spanned the summer of 498 00:27:24,160 --> 00:27:26,360 Speaker 1: n and they would repeat this a couple of times. 499 00:27:26,400 --> 00:27:28,719 Speaker 1: Oh yeah, yeah, and why the summer, you ask. Summer 500 00:27:28,840 --> 00:27:31,280 Speaker 1: is a when kids are out of school and parents 501 00:27:31,400 --> 00:27:35,800 Speaker 1: need something to do with these suddenly free tiny humans. Yeah, 502 00:27:35,840 --> 00:27:38,520 Speaker 1: most of us have to continue to work in the 503 00:27:38,520 --> 00:27:41,080 Speaker 1: summer months, and so how do you keep the tiny 504 00:27:41,160 --> 00:27:44,000 Speaker 1: humans from rising up against their masters and enslaving us 505 00:27:44,000 --> 00:27:48,359 Speaker 1: all good HBO. Furthermore, as most of us know, summer 506 00:27:48,480 --> 00:27:51,760 Speaker 1: is when many television shows are in reruns. All of 507 00:27:51,800 --> 00:27:54,520 Speaker 1: the all of the really big primary prime time sort 508 00:27:54,560 --> 00:27:58,159 Speaker 1: of things are broken for the summer. Yeah, broadcast television 509 00:27:58,280 --> 00:28:02,600 Speaker 1: is tends to be pretty pretty barren over the summer, 510 00:28:02,640 --> 00:28:05,520 Speaker 1: like you're either watching reruns or especially just don't care 511 00:28:05,520 --> 00:28:07,720 Speaker 1: about especially back in those days. These days, it's changing 512 00:28:07,720 --> 00:28:09,200 Speaker 1: a little. It's a little bit. It's a little bit 513 00:28:09,200 --> 00:28:13,640 Speaker 1: now where you can get interesting programming. Yeah, especially now 514 00:28:13,680 --> 00:28:16,199 Speaker 1: that you have shows that are dividing their seasons up 515 00:28:16,200 --> 00:28:22,480 Speaker 1: into season breaking bad, you don't don't perpetuate the breaking 516 00:28:22,520 --> 00:28:25,719 Speaker 1: bad problem. I mean, breaking bad great show, but you know, 517 00:28:26,440 --> 00:28:30,879 Speaker 1: splitting up your seasons, oh bad, breaking bad bad? All right. 518 00:28:31,119 --> 00:28:34,600 Speaker 1: But anyway, Yeah, HBO decided, hey, we we can take 519 00:28:34,640 --> 00:28:38,160 Speaker 1: this opportunity to really grab this this audience that doesn't 520 00:28:38,280 --> 00:28:40,720 Speaker 1: yet subscribe to HBO. So what they did was they 521 00:28:40,760 --> 00:28:44,200 Speaker 1: sent ads through direct mail and they also did telemarketing. 522 00:28:44,200 --> 00:28:47,680 Speaker 1: They called people, cold calling people to convince them to 523 00:28:48,480 --> 00:28:53,120 Speaker 1: sign up, and as irritating as it was, it was worked. Yeah. 524 00:28:53,280 --> 00:28:58,200 Speaker 1: They sent six hundred forty million ads to folks between 525 00:28:59,040 --> 00:29:03,840 Speaker 1: six billion, twice the population of the United States. They 526 00:29:04,200 --> 00:29:08,280 Speaker 1: also did start investing more in original programming. Yes, um, 527 00:29:08,360 --> 00:29:10,440 Speaker 1: and and you know, sports was something that they had 528 00:29:10,440 --> 00:29:12,440 Speaker 1: been doing since the beginning. Yeah, that was one of 529 00:29:12,440 --> 00:29:14,920 Speaker 1: the you remember the two things you could watch an 530 00:29:15,000 --> 00:29:18,560 Speaker 1: HBO when it premiered was a movie, uh that that 531 00:29:18,840 --> 00:29:22,320 Speaker 1: was about logging and a hockey game. So sports had 532 00:29:22,440 --> 00:29:25,720 Speaker 1: always been part of HBO. Also, stand up comedy specials 533 00:29:25,720 --> 00:29:27,680 Speaker 1: had been a part of HBO since the early days. 534 00:29:27,720 --> 00:29:30,360 Speaker 1: Oh yeah, yeah, those really great old rap and Williams 535 00:29:30,400 --> 00:29:33,320 Speaker 1: or Richard pryor special. Steve Martin had a good one too. Yeah. 536 00:29:33,360 --> 00:29:35,719 Speaker 1: You had a bunch of people who were the the 537 00:29:35,800 --> 00:29:39,600 Speaker 1: kind of the loudest voices of comedy in the seventies 538 00:29:39,600 --> 00:29:43,320 Speaker 1: and eighties. George Carlin another one. Some amazing comedians who 539 00:29:43,320 --> 00:29:45,440 Speaker 1: would get their HBO special And even to this day 540 00:29:45,720 --> 00:29:49,080 Speaker 1: you'll hear comedians talk about, you know, feeling like they 541 00:29:49,120 --> 00:29:51,520 Speaker 1: made it when they got an HBO special like that. 542 00:29:51,520 --> 00:29:53,800 Speaker 1: That was like a mark of success. You know, that's 543 00:29:53,840 --> 00:29:56,959 Speaker 1: when you know you've you've arrived. They continued to do that, 544 00:29:57,080 --> 00:30:00,360 Speaker 1: so stand up comedy also big. They also ended up 545 00:30:00,360 --> 00:30:04,200 Speaker 1: backing several documentary series. They ended up creating several series, 546 00:30:04,360 --> 00:30:08,160 Speaker 1: including a brand called America Undercover. There are several documentaries 547 00:30:08,160 --> 00:30:12,000 Speaker 1: in that series, and that helped to differentiate them again 548 00:30:12,080 --> 00:30:14,400 Speaker 1: more from the showtimes in the world. Now, keep in 549 00:30:14,440 --> 00:30:18,000 Speaker 1: mind Showtime at this point not really getting into original 550 00:30:18,040 --> 00:30:21,440 Speaker 1: programming that much. They were still very much dependent upon 551 00:30:21,480 --> 00:30:25,600 Speaker 1: the uncut, uncensored versions of movies. HBO was trying to 552 00:30:25,680 --> 00:30:28,240 Speaker 1: kind of break away from that a little bit while 553 00:30:28,240 --> 00:30:31,800 Speaker 1: still having movies on the channel, but trying to differentiate 554 00:30:31,880 --> 00:30:35,120 Speaker 1: themselves by adding variety that you could not get anywhere else. 555 00:30:35,160 --> 00:30:37,240 Speaker 1: A right, right, it's a little bit, if you remember 556 00:30:37,360 --> 00:30:41,920 Speaker 1: from our cable provider and streaming media discussion, or I mean, 557 00:30:41,960 --> 00:30:44,560 Speaker 1: if you pay attention to the Internet these days, a 558 00:30:44,880 --> 00:30:47,440 Speaker 1: little bit of what what Netflix is doing to kind 559 00:30:47,480 --> 00:30:50,800 Speaker 1: of try to move itself forward in front of channels 560 00:30:50,800 --> 00:30:53,280 Speaker 1: like HBO. In fact, if HBO had not done this, 561 00:30:53,400 --> 00:30:56,560 Speaker 1: we would not have a Netflix, and we certainly wouldn't 562 00:30:56,560 --> 00:30:58,840 Speaker 1: have a Netflix that's making its own content. Same thing 563 00:30:58,880 --> 00:31:01,600 Speaker 1: with Hulu, same thing with am is on. The reason 564 00:31:01,640 --> 00:31:04,520 Speaker 1: why they're able to make their own content, why that's 565 00:31:04,560 --> 00:31:07,360 Speaker 1: a viable choice is because HBO tried it and made 566 00:31:07,400 --> 00:31:10,520 Speaker 1: it work. Now, not everything HBO did with the independent 567 00:31:11,040 --> 00:31:13,240 Speaker 1: stuff that they did, the original programming stuff worked and 568 00:31:13,280 --> 00:31:16,080 Speaker 1: we'll talk a lot about some of both the successes 569 00:31:16,120 --> 00:31:20,360 Speaker 1: and the failures. Um, not everything caught on. However, they 570 00:31:20,400 --> 00:31:23,360 Speaker 1: also partnered at that time with a company called Thorne 571 00:31:23,480 --> 00:31:26,440 Speaker 1: E m I, which was an independent film producer and 572 00:31:26,560 --> 00:31:30,640 Speaker 1: video distributor. So their main business model was to partner 573 00:31:30,680 --> 00:31:33,000 Speaker 1: with other movie studios that did not have a home 574 00:31:33,160 --> 00:31:36,880 Speaker 1: video distribution market. So some of the big ones did 575 00:31:37,440 --> 00:31:39,600 Speaker 1: they They had They had it all in place where 576 00:31:39,840 --> 00:31:43,320 Speaker 1: either they had their own production company or distribution company 577 00:31:43,440 --> 00:31:46,280 Speaker 1: or they partnered with someone already. Thorny and I would 578 00:31:46,360 --> 00:31:49,440 Speaker 1: would partner with lots of smaller, smaller distribution companies. So 579 00:31:49,440 --> 00:31:52,160 Speaker 1: they ended up getting a lot of um we all 580 00:31:52,240 --> 00:31:55,600 Speaker 1: those cheap action movies, you know, the ones that started Internet, Darling, 581 00:31:55,800 --> 00:31:58,959 Speaker 1: Chuck Norris, those were big ones. But uh. The following 582 00:31:59,040 --> 00:32:04,080 Speaker 1: year six, Cannon Pictures bought out thorn em I's interest, 583 00:32:04,200 --> 00:32:07,880 Speaker 1: so HBO and thorny em I had um HBO and 584 00:32:07,920 --> 00:32:11,200 Speaker 1: thorny Emi had partnered together. Cannon Pictures comes in buys 585 00:32:11,240 --> 00:32:13,720 Speaker 1: out thorn em I, but still partners with HBO and 586 00:32:13,720 --> 00:32:17,560 Speaker 1: it becomes HBO Slash Cannon Video and again most of 587 00:32:17,600 --> 00:32:22,280 Speaker 1: the movies low budget action films, awesome movies, not taking 588 00:32:22,280 --> 00:32:26,959 Speaker 1: anything away from him. By seven, HBO Cannon ends up 589 00:32:27,000 --> 00:32:30,400 Speaker 1: being renamed HBO Video. Short time later, it changes names 590 00:32:30,440 --> 00:32:36,120 Speaker 1: again to HBO Entertainment and they had a few successes, 591 00:32:36,160 --> 00:32:39,240 Speaker 1: but really it was touch and go for a while. 592 00:32:39,320 --> 00:32:43,160 Speaker 1: It wouldn't be until HBO original programming really took off 593 00:32:43,520 --> 00:32:47,320 Speaker 1: in the nineties when HBO Entertainment had it made. Because 594 00:32:47,400 --> 00:32:51,760 Speaker 1: now they became the distribution for HBO originals that everybody 595 00:32:51,800 --> 00:32:53,560 Speaker 1: wanted to have, all right, but at the time it 596 00:32:53,640 --> 00:32:57,480 Speaker 1: was really just scraping by. Moving on to Night six, 597 00:32:57,560 --> 00:33:01,480 Speaker 1: that's when HBO established HBO Showcase, which was an actual 598 00:33:01,520 --> 00:33:04,600 Speaker 1: production company. So they had already moved into distribution, and 599 00:33:04,600 --> 00:33:07,520 Speaker 1: they had a production company over on the West Coast 600 00:33:07,520 --> 00:33:10,800 Speaker 1: in Los Angeles called HBO Pictures, but now they wanted 601 00:33:10,840 --> 00:33:13,400 Speaker 1: to create another production company on the East Coast, so 602 00:33:13,440 --> 00:33:15,920 Speaker 1: this one was based in New York. And the idea 603 00:33:16,000 --> 00:33:19,600 Speaker 1: was to make grittier, more you know, kind of realistic 604 00:33:19,960 --> 00:33:24,640 Speaker 1: or hard hitting movies than HBO Pictures was known for. 605 00:33:24,840 --> 00:33:28,160 Speaker 1: So their first picture was about a KGB agent who 606 00:33:28,200 --> 00:33:30,520 Speaker 1: was involved in a big CIA operation. This was actually 607 00:33:30,520 --> 00:33:35,200 Speaker 1: a true story about Uri Nasinko. So they they were 608 00:33:35,360 --> 00:33:38,680 Speaker 1: going kind of this this hard, gritty route, and in 609 00:33:38,720 --> 00:33:42,280 Speaker 1: general people said it felt more like HBO, whereas the 610 00:33:42,280 --> 00:33:46,240 Speaker 1: stuff from HBO Pictures a little more you know, glossy 611 00:33:46,360 --> 00:33:50,640 Speaker 1: and glitzy. Certainly had bigger budgets, had access to bigger names, 612 00:33:50,720 --> 00:33:56,080 Speaker 1: so you saw more movie stars in HBO Pictures productions, 613 00:33:56,080 --> 00:33:58,760 Speaker 1: but the HBO Showcase would be the kind of more 614 00:33:58,840 --> 00:34:02,520 Speaker 1: down to earth stuff. So both of these would eventually 615 00:34:02,800 --> 00:34:07,560 Speaker 1: merge together and become HBO Films, and Colin Callender, who 616 00:34:07,600 --> 00:34:10,359 Speaker 1: had been the head of HBO Showcase, became the head 617 00:34:10,400 --> 00:34:13,680 Speaker 1: of this whole department. I'm sure there were some grumblings 618 00:34:13,680 --> 00:34:17,400 Speaker 1: on both sides. I'm sure the the the Showcase folks 619 00:34:17,440 --> 00:34:20,440 Speaker 1: were thinking, you know, they get all the money and 620 00:34:20,480 --> 00:34:23,040 Speaker 1: they get they get access to all that talent, whereas 621 00:34:23,040 --> 00:34:26,480 Speaker 1: the pictures folks were probably thinking, they have this crazy reputation, 622 00:34:26,520 --> 00:34:29,040 Speaker 1: which we should have because look at what we're doing. 623 00:34:29,080 --> 00:34:32,000 Speaker 1: So so everyone get together and play nice. Yeah. Uh. 624 00:34:32,160 --> 00:34:35,280 Speaker 1: Fortunately they were separated by the rest of the United States, 625 00:34:35,360 --> 00:34:37,040 Speaker 1: with one being in l a and the other being 626 00:34:37,040 --> 00:34:39,080 Speaker 1: in New York, so I think they could. They were 627 00:34:39,120 --> 00:34:41,560 Speaker 1: insulated enough where it wasn't too much of a problem. 628 00:34:41,680 --> 00:34:46,360 Speaker 1: Also in now, this is another big moment in HBO 629 00:34:46,480 --> 00:34:51,280 Speaker 1: history because it established a practice that ended up becoming 630 00:34:51,320 --> 00:34:54,759 Speaker 1: an industry wide standard. It's another reason why we really 631 00:34:54,760 --> 00:34:58,160 Speaker 1: wanted to talk about HBO at length, because so many 632 00:34:58,160 --> 00:35:01,560 Speaker 1: of the things they did influen inst multiple industries. In 633 00:35:01,560 --> 00:35:06,400 Speaker 1: this case, they began to scramble or encode signals full 634 00:35:06,480 --> 00:35:09,560 Speaker 1: time for those satellite signals. Now, if you listen to 635 00:35:09,600 --> 00:35:12,920 Speaker 1: the first episode you learned about HBO using up links 636 00:35:12,960 --> 00:35:15,759 Speaker 1: to send a signal up to a satellite, which used 637 00:35:15,760 --> 00:35:19,239 Speaker 1: transponders leased by HBO to amplify the signal send it 638 00:35:19,280 --> 00:35:22,400 Speaker 1: back down to down links across the nation to cable providers, 639 00:35:22,520 --> 00:35:25,080 Speaker 1: because it spread out over the entirety of North America, 640 00:35:25,440 --> 00:35:28,640 Speaker 1: and at this point, the cost of purchasing a satellite 641 00:35:28,640 --> 00:35:30,959 Speaker 1: dish for yourself head lowered to the point where where 642 00:35:31,440 --> 00:35:33,719 Speaker 1: common families could purchase one if they wanted yea, if 643 00:35:33,719 --> 00:35:35,960 Speaker 1: they if they saved up. I mean, even back when 644 00:35:35,960 --> 00:35:38,040 Speaker 1: it was still tens of thousands of dollars. You had 645 00:35:38,040 --> 00:35:40,879 Speaker 1: a few crazy people with lots of money buying these 646 00:35:40,920 --> 00:35:44,200 Speaker 1: things because the signals weren't scrambled, the signals were clear. 647 00:35:44,840 --> 00:35:46,959 Speaker 1: So so once you bought in what i mean for 648 00:35:46,960 --> 00:35:49,200 Speaker 1: for the purchase price of that satellite dish, you could 649 00:35:49,400 --> 00:35:52,919 Speaker 1: watch whatever you wanted to absolutely free. And so pay 650 00:35:52,960 --> 00:35:55,480 Speaker 1: TV stations didn't like this because you didn't have to 651 00:35:55,520 --> 00:35:58,400 Speaker 1: subscribe to cable at all. Cable companies didn't like it 652 00:35:58,400 --> 00:36:00,399 Speaker 1: because you didn't have to subscribe to cable at all. 653 00:36:00,719 --> 00:36:04,279 Speaker 1: You just had this dish, which at the time was enormous. Uh. 654 00:36:04,360 --> 00:36:07,799 Speaker 1: This was before they had developed the the dishes that 655 00:36:07,960 --> 00:36:10,239 Speaker 1: are more common these days. This is when if you 656 00:36:10,280 --> 00:36:12,719 Speaker 1: remember back in the eighties, the enormous satellite dishes that 657 00:36:12,800 --> 00:36:14,320 Speaker 1: might be out in front of someone's yard or in 658 00:36:14,360 --> 00:36:16,400 Speaker 1: the backyard. That's what I'm talking about, the big like 659 00:36:16,480 --> 00:36:20,200 Speaker 1: nine footers. So you're able to get these signals clear. 660 00:36:20,320 --> 00:36:23,319 Speaker 1: And not only that, broadcast television hated it. And you 661 00:36:23,400 --> 00:36:25,560 Speaker 1: might think, well, why did broadcast television hate it? You 662 00:36:25,600 --> 00:36:29,200 Speaker 1: could get those shows for free using an antenna. Well, 663 00:36:29,280 --> 00:36:31,839 Speaker 1: it's because those shows aren't really free. The reason why 664 00:36:31,880 --> 00:36:36,080 Speaker 1: those shows are are possible at almost because their ads supported, right, 665 00:36:36,600 --> 00:36:41,400 Speaker 1: advertisers by advertising time on those shows, and that money 666 00:36:41,480 --> 00:36:45,160 Speaker 1: goes to the production companies. They are more steps in here, 667 00:36:45,200 --> 00:36:47,880 Speaker 1: but in general, the production companies are able to make 668 00:36:47,920 --> 00:36:51,040 Speaker 1: shows because the money made through advertising. Well, if you're 669 00:36:51,080 --> 00:36:53,560 Speaker 1: using a satellite to pull down the raw feed, you're 670 00:36:53,560 --> 00:36:55,799 Speaker 1: getting the raw feed, you're getting what's called the back 671 00:36:55,880 --> 00:36:58,800 Speaker 1: hall feed, which is before they put any commercials into 672 00:36:58,800 --> 00:37:02,520 Speaker 1: the content. So you were getting commercial free content from 673 00:37:02,560 --> 00:37:06,640 Speaker 1: all the different providers, something that broadcast and cable stations 674 00:37:06,680 --> 00:37:09,799 Speaker 1: and cable providers all hated. So how do you fix 675 00:37:09,800 --> 00:37:12,359 Speaker 1: this problem? Well, what HBO decided to do was to 676 00:37:12,440 --> 00:37:17,680 Speaker 1: invest in this encoding and scrambling technology. They ended up 677 00:37:17,760 --> 00:37:21,040 Speaker 1: going with General Instruments Video cipher to to encrypt the 678 00:37:21,080 --> 00:37:24,400 Speaker 1: audio and video signals. Once they've done that, you'd have 679 00:37:24,480 --> 00:37:27,400 Speaker 1: to have a decryption box on the private end in 680 00:37:27,480 --> 00:37:31,439 Speaker 1: order to decrypt the signals. Right, So cable companies had 681 00:37:31,480 --> 00:37:34,040 Speaker 1: these D scramblers, Right, they can just descramble it, and 682 00:37:34,040 --> 00:37:37,440 Speaker 1: they had an agreement with HBO. Originally it was just HBO, 683 00:37:37,520 --> 00:37:41,160 Speaker 1: but other other channels would follow suit. So HBO ended up, 684 00:37:41,160 --> 00:37:44,880 Speaker 1: like I said, creating this industry standard approach. So the 685 00:37:44,920 --> 00:37:47,560 Speaker 1: cable providers would all have these D scramblers. And as 686 00:37:47,560 --> 00:37:50,719 Speaker 1: a private citizen, you could get a D scrambler, but uh, 687 00:37:50,840 --> 00:37:54,400 Speaker 1: it wouldn't necessarily work. You'd have to pay HBO to 688 00:37:54,400 --> 00:37:57,520 Speaker 1: have access. You could actually go out and buy chips 689 00:37:57,560 --> 00:38:00,920 Speaker 1: that would decrypt things for you, but often these chips 690 00:38:00,920 --> 00:38:03,200 Speaker 1: would only be good for about a month, and what 691 00:38:03,239 --> 00:38:05,719 Speaker 1: would happen is that the provider on the other end 692 00:38:05,719 --> 00:38:09,919 Speaker 1: would see that someone usually it's some fake address that's 693 00:38:09,920 --> 00:38:14,839 Speaker 1: been made out to a customer has not paid their bill, 694 00:38:15,320 --> 00:38:16,960 Speaker 1: and so they cut off the service. So for a 695 00:38:17,000 --> 00:38:19,560 Speaker 1: month you have service and then suddenly you don't. So 696 00:38:19,840 --> 00:38:21,960 Speaker 1: people kept trying to find ways to get around this, 697 00:38:22,440 --> 00:38:25,000 Speaker 1: but it meant that for the most part, it was 698 00:38:25,239 --> 00:38:28,160 Speaker 1: much harder to pirate a signal. Now this made satellite 699 00:38:28,160 --> 00:38:32,480 Speaker 1: dish owners very, very angry. They felt entitled to the 700 00:38:32,480 --> 00:38:35,120 Speaker 1: stuff they were stealing because, in their minds they had 701 00:38:35,120 --> 00:38:38,279 Speaker 1: paid thousands of dollars for a Sally dish, therefore they 702 00:38:38,320 --> 00:38:40,960 Speaker 1: should have access to all this content, despite the fact 703 00:38:41,000 --> 00:38:43,680 Speaker 1: that all the content providers are saying, yeah, see, the 704 00:38:43,680 --> 00:38:46,920 Speaker 1: money you spent didn't go to help pay for the 705 00:38:46,960 --> 00:38:50,720 Speaker 1: actual content, and unless we get paid for the content 706 00:38:50,760 --> 00:38:54,760 Speaker 1: we make, we can't make it. So you're actually talking 707 00:38:54,760 --> 00:38:58,760 Speaker 1: about a behavior that ultimately will completely destroy the business 708 00:38:58,960 --> 00:39:01,920 Speaker 1: that you want to to enjoy. You want this content, 709 00:39:02,040 --> 00:39:04,600 Speaker 1: you want to be able to watch stuff, but if 710 00:39:04,640 --> 00:39:06,800 Speaker 1: we're not getting money for it, we can't make the 711 00:39:06,840 --> 00:39:09,800 Speaker 1: stuff you want to watch. But the satellite provide satellite 712 00:39:09,840 --> 00:39:15,040 Speaker 1: owners said, I want my free HBO. So Jonathan has 713 00:39:15,080 --> 00:39:18,040 Speaker 1: some opinions. I don't side with the pirates on this one. 714 00:39:18,520 --> 00:39:22,760 Speaker 1: To be honest, I understand. I understand the other arguments, 715 00:39:22,800 --> 00:39:25,880 Speaker 1: which we'll get into when we talk about streaming. I'll 716 00:39:25,920 --> 00:39:28,239 Speaker 1: you know, it's not that I don't feel empathy for 717 00:39:28,280 --> 00:39:30,920 Speaker 1: folks who want to have access to content. It's just 718 00:39:31,000 --> 00:39:34,160 Speaker 1: that if you had the choice of either spending thousands 719 00:39:34,200 --> 00:39:36,400 Speaker 1: of dollars for a satellite dish and then stealing everything 720 00:39:36,560 --> 00:39:40,399 Speaker 1: or just that that is a different issue. And it's 721 00:39:40,400 --> 00:39:43,320 Speaker 1: a little bit on the silly end um. But meanwhile, 722 00:39:43,400 --> 00:39:48,480 Speaker 1: also in six uh, Jeff Bukes became HBO's chief financial officer. 723 00:39:48,680 --> 00:39:51,640 Speaker 1: He wouldn't be finished rising the ranks because if you 724 00:39:51,719 --> 00:39:54,200 Speaker 1: listen to our last episode, we kind of gave it away. 725 00:39:54,960 --> 00:39:58,279 Speaker 1: HBO launches Festival. This is gonna sound like it's a 726 00:39:59,000 --> 00:40:02,000 Speaker 1: like it's a Dejah all over again. All right, right? 727 00:40:02,040 --> 00:40:05,040 Speaker 1: Remember take two? Yeah, that was the idea of creating 728 00:40:05,160 --> 00:40:09,040 Speaker 1: a kid friendly network that was lower priced, so people 729 00:40:09,080 --> 00:40:12,239 Speaker 1: who weren't either willing to pay the full subscription price 730 00:40:12,239 --> 00:40:15,400 Speaker 1: for HBO or objected to the content would have an alternative. 731 00:40:16,200 --> 00:40:18,799 Speaker 1: It also did not work. Yeah, apparently they didn't learn 732 00:40:18,840 --> 00:40:21,520 Speaker 1: anything from Take two because Festival to me sounds like 733 00:40:21,520 --> 00:40:24,279 Speaker 1: it was the same thing, exactly the same thing. Yeah, 734 00:40:24,320 --> 00:40:27,520 Speaker 1: it would it would find up getting canceled entirely than 735 00:40:27,560 --> 00:40:30,360 Speaker 1: a year. Yeah, the problem was that they were trying 736 00:40:30,400 --> 00:40:34,000 Speaker 1: to target two different populations. They wanted to target the 737 00:40:34,480 --> 00:40:37,560 Speaker 1: conservative older people who didn't want all that filth on 738 00:40:37,600 --> 00:40:40,799 Speaker 1: their TV, and they wanted to target families with young 739 00:40:40,880 --> 00:40:43,880 Speaker 1: children who wanted to have kid friendly programming. But the 740 00:40:43,880 --> 00:40:46,640 Speaker 1: problem was all the older conservatives said, why do you 741 00:40:46,640 --> 00:40:49,680 Speaker 1: have all this children programming on my station? I don't 742 00:40:49,719 --> 00:40:51,759 Speaker 1: want any of this. This is not interesting to me. 743 00:40:52,120 --> 00:40:54,840 Speaker 1: And all the families were saying, I got this channel 744 00:40:54,840 --> 00:40:56,919 Speaker 1: so that I could watch stuff and my kids could 745 00:40:56,920 --> 00:40:58,680 Speaker 1: watch stuff. But when my kids have gone to bed, 746 00:40:58,719 --> 00:41:00,960 Speaker 1: the only stuff you have on is on Golden Pond 747 00:41:01,480 --> 00:41:04,719 Speaker 1: times in a row. I don't care about that. So 748 00:41:05,160 --> 00:41:10,040 Speaker 1: neither target audience was satisfied. So it's the lesson here 749 00:41:10,520 --> 00:41:13,440 Speaker 1: is if you want to target two very different audiences, 750 00:41:13,719 --> 00:41:19,000 Speaker 1: splitting the difference hardly ever works. Yes. Um the next 751 00:41:19,080 --> 00:41:22,520 Speaker 1: year though in Something with Kids did work out. Yes. 752 00:41:22,840 --> 00:41:25,800 Speaker 1: The Kids in the Hall in fact, premiered on HBO 753 00:41:25,960 --> 00:41:30,000 Speaker 1: Canadian sketch comedy Troupe Brilliant, one of my favorites seen 754 00:41:30,040 --> 00:41:33,320 Speaker 1: him live, Good stuff. And that wraps up the HBO 755 00:41:33,400 --> 00:41:36,520 Speaker 1: story Part two. Next week we will have the part 756 00:41:36,640 --> 00:41:40,000 Speaker 1: three of the story, and again Like I said, a 757 00:41:40,000 --> 00:41:43,640 Speaker 1: lot has happened in the years since, so I'll probably 758 00:41:43,640 --> 00:41:46,520 Speaker 1: have to do an update to this at some point 759 00:41:46,719 --> 00:41:51,000 Speaker 1: and talk really about how HBO and Warner Brothers have 760 00:41:51,120 --> 00:41:57,000 Speaker 1: really transformed the entertainment space, particularly in a world that 761 00:41:57,040 --> 00:42:00,279 Speaker 1: went through a pandemic that really shook things up in 762 00:42:00,320 --> 00:42:03,839 Speaker 1: a big, big way. But that'll have to wait in 763 00:42:03,880 --> 00:42:06,440 Speaker 1: the meantime. If you have any suggestions for topics I 764 00:42:06,440 --> 00:42:09,040 Speaker 1: should cover in future episodes of tech Stuff or ones 765 00:42:09,120 --> 00:42:12,200 Speaker 1: that require an update, let me know. The best way 766 00:42:12,200 --> 00:42:14,160 Speaker 1: to do that is to reach out on Twitter and 767 00:42:14,200 --> 00:42:17,279 Speaker 1: the handle I use is text Stuff hs W. Next 768 00:42:17,280 --> 00:42:20,319 Speaker 1: week we're gonna have part three of this, so stay 769 00:42:20,360 --> 00:42:23,080 Speaker 1: tuned for that and I'll talk to you again really soon. 770 00:42:28,239 --> 00:42:31,279 Speaker 1: Text Stuff is an I Heart Radio production. For more 771 00:42:31,360 --> 00:42:34,720 Speaker 1: podcasts from my Heart Radio, visit the i Heart Radio app, 772 00:42:34,880 --> 00:42:38,040 Speaker 1: Apple Podcasts, or wherever you listen to your favorite shows.