HBO Won't Give Up Its Throne

About: AT&T Inc. (T), Includes: NFLX
by: The Entertainment Oracle

This week marks the last episode of HBO’s Emmy-winning juggernaut “Game of Thrones.”.

With Netflix gaining in power and streaming TV becoming the future, many investors/analysts are seemingly beginning to lose faith in HBO - despite a solid track record of stability.

It is understandable why investors are nervous given comments made by AT&T’s team following their acquisition of Time Warner, but those comments may be more misplaced bluster and bravado.

HBO was responsible for the cable revolution and until such time it falters to a point that its numbers plummets you have to believe the company have a plan.

While it’s true “Thrones” may be a once-in-a-generation series, HBO’s been down this road before and has the shows in the pipeline to ensure its roster doesn’t miss a step.

Image Credit: HBO.

This week fans will say goodbye to AT&T-owned (NYSE:T) HBO's Game of Thrones.

It’s a big deal. No, really, it is.

Try to think back to the last truly must-watch live series on TV. It’s hard right? I mean you could make an argument for Breaking Bad, The Sopranos or LOST…you could also make the same argument that The Walking Dead is still not to be missed every week, but that’s the point. All of those you could make an argument for, but you don’t need to with Thrones…it just is.

The series checks all the boxes and hits all the demos. While the last few episodes have been more maddening than entertaining, the fact remains you were watching.

A lot of you were watching.

Thrones may really be a once-in-a-generation series…but what if it’s not? And more importantly why are we doubting the creativity of HBO’s programming team? These are the same people that said yes to the Thrones producers in the first place and stuck by them while they found their footing. Like the show, or hate the show, you know the show and that’s because of them.

Investors and analysts have been falling over themselves the past few months lamenting that when Thrones ends, winter really would have come thus signaling the end of must-see LIVE TV and some are taking it a step further.

Could winter have come for HBO?

I get the thinking – Netflix (NASDAQ:NFLX) and company are here and thriving so viewers needs will change accordingly. The truth is that as easy as it is to say that, it doesn’t actually make it true. A few weeks ago I wrote an column on Netflix’s Game of Thrones problem, namely that it doesn’t have Thrones like series. Yes, Netflix has some great programming, but it doesn’t have that watercooler TV series that every week gets people talking. And I know that’s argument many people think they can counter but it’s harder than you think.

I take nothing away from Netflix and the other streamers but there’s something to be said for the classic method of watching TV one installment at a time. Sure, for those who want to binge, you can let episodes build up and watch them all at once but having that “wow” moment that you can talk about the next day is a cornerstone of our culture.

My favorite quote tied to that comes from comedian Mindy Kaling, who essentially said that if you didn’t watch Thrones live and don’t want to be spoiled, don’t come into the office the next day because she’s talking about what happened and she’s unapologetic about it…and she should be.

Given Thrones is an hour-long (usually) series airing once a week, that’s fair – it’s not like she said that about Stranger Things and was forcing people to binge the whole season in a night to avoid spoilers. That, inherently, is the problem with streaming services -- you never know where everybody is in a season, so you are afraid to talk about the show, which lessens the conversation around it.

But I’m not looking to start the HBO vs. Netflix debate. I’m looking to explain to readers why some investors and analysts are questioning if the network that brought us Sopranos, Sex & The City, Veep, Six Feet Under, Deadwood, Boardwalk Empire and countless others can pull another rabbit out of its hat.

Here’s why we find ourselves in this situation.

Casey Bloys, HBO’s programming president told media outlet The Wrap the below:

Great shows go away, other great shows come. You never know where they’re going to come from. If you stay in business with people you believe in, you see what happens.

And that’s the problem, some of those great people are leaving. Chief among them Richard Plepler who is seen as one of the architects of the current crop of HBO success stories. Plepler is out following the takeover and WarnerMedia CEO John Stankey is now playing a larger role - while Stankey is very smart in his own right, he didn’t make a great first impression.

In a town hall meeting with HBO staff after the acquisition he told them he wanted them to be more like Netflix – which is ironic given the famous quote from Netflix topper Ted Sarandos that Netflix’s “goal was to become HBO faster than HBO can become us.”

HBO is a gold-standard network and one that was a large part of the reason why its parent company Time Warner was lusted after by new parent company AT&T….so you can imagine how well Stankey’s comments went over internally.

I’ll save you the trouble, it was bad.

Stankey had to later walk back those comments and clarify that he wasn’t looking to change the culture of HBO programming.

Still, it was bad and it was coming at a time where HBO was about to lose its marquee title which only made things worse. However let me try to assuage any fears though that investors may have.

Remember that list I put above of past HBO hits?

Try this one:

  • Barry
  • Succession
  • Westworld
  • Curb Your Enthusiasm
  • Silicon Valley
  • Ballers
  • Insecure

Those are all shows HBO still has in play and that’s not even including mainstays like Real Time With Bill Maher and Last Week Tonight With John Oliver. You could also count Big Little Lies, but that’s a limited run event – though it ensures HBO will be even more dangerous in 2020’s Emmy race.

The future is bright as well with Watchman, His Dark Materials and Jordan Peele’s Lovecraft Country on the drama side as well Avenue 5, the next comedy from Veep creator Amando Iannucci. New projects from Robert Downey Jr., Joss Whedon and Julian Fellows are also on the roster and of course the Thrones prequels.

It’s a lot of content -- and as we’ve learned, content is king.

You are going to be seeing HBO vs. Netflix comparisons for a long time going forward – and I’ll likely write a bunch myself. The point is HBO and Netflix are the biggest power players in the industry right now. That’s not to say Disney, Apple, Hulu and Amazon aren’t important, but HBO and Netflix redefined how we watch TV and until something else comes along, you stick with the ones that got you here.

HBO led the cable revolution and Netflix led the streaming one, it’s as simple as that and until such time either falters to a point that their stock price plummets you have to believe the companies have a plan.

As much as I criticize Netflix’s model, I’m also not foolish enough to believe they didn’t know the day was coming when its licensed IP catalog would begin to shrink – that’s why they’ve spent boatloads of money on new content.

The same thing is true here with HBO. It knew Thrones had an end point and they planned accordingly. Yes, it’s going to be a big blow, but it’s not something they can’t come back from – they’ve done it before and they’ll do it again.

It’s not TV, it’s HBO. Remember that.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.