Eric Kessler has worked at HBO for more than two decades in various capacities, overseeing everything from program licensing to digital strategy and marketing. He’s been in the business a long time, seen the pay TV programming evolution first hand, and played a role in it as well.
Put it this way, he’s the guy who came up with the slogan “It’s Not TV. It’s HBO,” which after a decade remains part of the cable TV vernacular. Today he’s got his hands full mapping out a viable digital strategy while remaining tethered to the cable TV cash cow and fending off new rivals like Netflix and Amazon that are mounting assaults on its business.
As the first order of business at today’s D: Dive Into Media interview, Kessler confirmed that HBO’s HBO Go App is now compatible with Apple’s AirPlay and HBO subscribers who have been pining to stream HBO shows from their iOS devices to Apple TV can now do so. “Our long-term plan for Go is to be across all devices, and effective today, we will be enabling AirPlay,” Kessler said, adding that Apple TV support will follow “at some point.”
At some point.
And when that day comes, might it be accompanied by a la carte programming? At some point. But Kessler argued that the time for that is still quite a ways off. The economics simply aren’t there.
“In marketing HBO we are targeting the people who most love TV,” Kessler said. “There are 70 million households that love television. And the average HBO household watches far more TV than the average TV household. So we are targeting the people who are most likely to buy our product.”
Makes sense, but why not also target the fast growing audience that wants HBO untethered from the TV? Simple. It’s too expensive.
“Is there a broadband segment that wants HBO,” said Kessler. “Yes, of course. But when you look at penetration rates, at disconnect rates, at infrastructure and marketing costs, the economics are just not particularly compelling … That doesn’t mean that’s not going to change at some point, though.”
So, for now HBO Go will remain largely as it is today: You’ve got to be a subscriber to use it. That might seem unnecessarily limiting, but Kessler said HBO still gets a lot out of it, even if it’s not bringing in money as a cord-cutter subscription service. It serves an important marketing function. People who watch HBO programs on HBO Go are generally more apt to talk about it online (obviously). “HBO Go usage seems to engage people in social conversation about these shows,” Kessler said. “Girls viewership increases as more people talk about it on Twitter and Facebook.”
What about other emerging schemes for building viewership? Netflix has recently been in the news quite a bit for its “House of Cards” series, which the company released as a 13-episode bundle. That’s a strategy HBO has embraced for its archival programming as well, and with a great deal of success. Viewers can use it to catch up on old seasons of their favorite series — obviously, there’s a great deal of value for some in binge-viewing five seasons of “The Wire” back-to-back.
But is it wise to give a brand new series like “House of Cards” similar treatment? Kessler seemed dubious. Serializing shows in the old school TV way plays a big role in building buzz, he explained. You forfeit that “Who Shot JR” anticipation. Just think about that final, infamous episode of “The Sopranos.”
“The finale of “The Sopranos” was one of the most talked about finales in the history of television,” Kessler said. “That show was on the cover of newspapers the next day. It was being talked about on morning radio and TV. If we had distributed the season all at once, we would have lost that.”
Stay tuned for video highlights from the session.