LOS ANGELES/NEW YORK (Hollywood Reporter) - The loss of
Tony Soprano didn't put a hit on HBO this summer. The network
is looking as Teflon as a Mafia don, according to the latest
subscriber numbers, which actually rose slightly in the first
full quarter since the most-watched series in HBO's history cut
New data from SNL Kagan indicates that HBO's subscriber
base ticked up in the third quarter by 80,000 to 28.94 million
despite concerns that the series' departure would lead a
portion of customers to drop their subscriptions.
A 0.3 percent increase might be nothing for incoming Time
Warner CEO and former HBO chief Jeff Bewkes to crow about, but
it's fairly consistent with the flat subscriber levels HBO has
been registering during the past several years.
"It seemed like a lot of people said they were going to
cancel HBO after 'Sopranos' ended," said Deana Myers, who has
tracked premium cable viewing patterns for the past decade as
senior analyst at SNL Kagan. "It did seem like it was going to
The numbers reveal an oft-overlooked truth about the
premium-cable category, which HBO occupies with Showtime and
Starz: Original programs might get all the attention, but their
effect on subscription sales isn't straightforward. Shows like
"Sopranos" are just one variable in a more complicated equation
in which subscription prices and cable-operator marketing can
be even bigger factors.
Subscriber fees provide the lion's share of HBO's revenue,
which SNL Kagan projects will reach $3.7 billion this year. HBO
Since losing "Sopranos," HBO has been bombarded with bad
buzz, from the flop of the series' time-slot replacement, "John
From Cincinnati," to only modest returns on other new shows
like "Tell Me You Love Me." Such returning veterans as
"Entourage" and "Big Love" showed little growth.
The new data reflects the absence of a consistent
correlation between pay TV tentpole originals and spikes in
subscription numbers. Though the 22-month stretch between the
fifth and sixth "Sopranos" seasons was the only time that HBO
registered small subscriber decreases, HBO experienced its
biggest recent spike in first-quarter 2006 -- a time when none
of its flagship series were on the air.
This gain of 365,000 subscribers might be attributable in
part to promotion for the long-awaited sixth season of
"Sopranos," but network insiders have long known that it had
much more to do with a DirecTV promotion during the previous
quarter for its "NFL Sunday Ticket" package, which offered HBO
free for that quarter.
Other nonprogramming factors -- primarily affiliate
marketing -- continue to drive subscriber growth at the pay
networks. Showtime went into an all-out push for subscribers
this fall, initiating its deepest discount: an annual
subscription plan for $7.95 a month.
The gambit worked; Showtime is expected to hit 15 million
subscribers for the first time in the fourth quarter. But while
having such acclaimed shows as "Dexter" and "Weeds" helps, the
discounts that help lure subscribers can cut into the bottom
Another potential factor: Pay TV services are hoping that
new multichannel service providers from the phone business,
like AT&T, eventually will experience the same explosive growth
that satellite once did. DirecTV's gains during the 1990s were
hugely important to HBO's own development.
BEYOND THE GLAMOUR
Regardless of the distribution mode, HBO isn't riding some
kind of rising tide among premium channels. HBO's own sister
channel Cinemax and rival Starz both registered small declines.
Although Starz's schedule has long been heavy on theatrical
films, it plans to venture into original series next year.
Programming is definitely a factor, but in HBO's case,
"Sopranos" was far from its only asset. Scripted originals
might be media darlings, but less glamorous staples like the
films from HBO's studio output deals and one-off sports events
like boxing could be just as big a draw as "Sopranos."
And then there is the school of thought that HBO will feel
the impact of losing "Sopranos," but it will take a few more
quarters for the shake-out to occur. Or perhaps, as Myers
suggests, regardless of the absence of "Sopranos," its very
success has earned subscribers' trust that more good stuff is
on the way.
"It says something about the brand that people want to
stick with HBO," she said.