To Thrive in the Era of Peak TV, HBO Is Turning Subscribers Into ‘Addicts’

From Vinyl to Sesame Street, network keeps viewers hooked

Are you hooked on HBO? The network sure hopes so.

As the premium service competes with an ever-growing number of broadcast, cable and digital competitors, including streaming services like Netflix, the network has developed an interesting approach to keeping subscribers coming back for more each month: turning them into "addicts," according to HBO CEO Richard Plepler.

HBO has 32.3 million U.S. subscribers as of the third quarter of 2015, according to SNL Kagan. Time Warner doesn't release HBO-specific figures but said Wednesday that HBO and Cinemax added 2.7 million subscribers in 2015. That figure includes subscribers to the company's stand-alone subscription service, HBO Now, which launched in April. Plepler said during Wednesday's Time Warner earnings call that HBO Now has around 800,000 paying subscribers. "We're just getting started," he said when asked about the lower-than-expected figure. "I think we're going to make a lot of progress as we put new content onto our platforms."

That new content includes HBO's new '70s rock drama, Vinyl, which premieres Sunday night and is executive produced by Martin Scorsese (who also directed the two-hour premiere) and Mick Jagger. HBO, which is home to a diverse slate of shows like Game of Thrones, Veep and Girls, has been striking enticing new content deals left and right during the past year. It signed Jon Stewart to a four-year deal to develop short-form digital content for HBO Now and HBO Go, and it became the new home for Sesame Street, which debuted its new season on HBO in January. The network also struck a multiplatform deal with Bill Simmons that includes a new weekly series and set a daily newscast with Vice.

The reason behind all of HBO's high-profile moves? "We're looking to build addicts," said Plepler, who spoke with Adweek prior to Wednesday's earnings call. "Some people are addicted to Girls, some to Silicon Valley. Some will be addicted to Vinyl. Some are addicted to Thrones, and some will be addicted to Sesame Street. What we're trying to do, across a wide variety of viewers and genres, is to capture people's imaginations and make HBO integral to their life. So anytime we have a chance to bring more great entertainment to the network, we're going to do it. It's all about a mosaic of great entertainment." (Plepler's addiction analogy makes even more sense when you realize that the first month of HBO Now is, yes, free for new subscribers.)

Plepler claimed HBO isn't overly concerned about Netflix, which now boasts more than 43 million U.S. subscribers, a figure that is well ahead of HBO's. "I have been at the network for over 20 years, and you had the networks, you had basic cable, you had the other premium services—and now you have digital services," he said. "We've lived with competition for our entire existence, and we've always said, 'Play our game, be the best that we can be, elevate our brand, and do the kind of work that we're going to be proud of.' If we do that, irrespective of competition, we're going to have more than our fair share of acclaim and attention, and I think we've proven that to be true."

Even in this overstuffed era of peak TV, "we just play our game, and we know it's not a zero-sum game," said Plepler.

"Other people are going to do good work," he said. "In this most competitive ecosystem, I think we have more wide-ranging, high-quality programming in more different genres on HBO than we've ever had in our history. We have more subs than we've ever had in our history. We're making more money than we've ever made in our history. So, in an age of competition, I think we've even elevated our game."

Plepler expects HBO Now's numbers to continue to grow as its deals with Stewart, Simmons and Vice begin to bear fruit. "We wanted to make sure that we had created a new dimension of distribution for those people out there and many millennials who wanted to get their television through the Internet," he said of HBO Now. "Jon really loved the idea of the notion of programming for Now. Everything that's on Now of course goes up on [HBO Go]—they're not mutually exclusive. But I think talent loves the idea that they can do different kinds of programming. Vice News is an example, and Jon is an example. I think it will open up and invite all kinds of new and dynamic ideas."

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